JK Lakshmi Cement Ltd. share price target

Healthy sales volume and cost benefits aid performance JK Lakshmi Cement (JKLC) has reported ~20% yoy growth in operating profit to Rs859mn vis--vis our estimate of Rs825mn, mainly supported by stupendous growth in sales volume (+39% yoy to 2.16mnT) coupled with cost benefits. Average realization/tonne remained subdued (down 8% yoy & 7% qoq) owing to poor realization scenario seen in Eastern & Northern markets. However, on account of 21% yoy decline in power and fuel cost/tonne owing to lower petcoke price, operating cost/tonne declined by 9% yoy & 8% qoq to Rs3,020. As we continue...

Background: JK Lakshmi Cements (JKLC) is a north Indian Cement player, established in 1982. JKLC has clinker units in Sirohi, Rajasthan and grinding units in Rajasthan, Gujarat and Haryana. The current clinker capacity is 6.2 MTPA and cement capacity is 8.3 MTPA. JKLC derives sales volume from the northern and western regions. The company has 5.3% share of dispatches in the northern and western regions. JKLC is on the spree of capacity expansion;...

JKLC's operating performance was lower than our expectations, largely driven by weak realisations. Its volumes have recovered, but the recovery is yet not remunerative. It will continuetoremainincapexmodeuntiltheendofFY18andfurthermarginaldelayscannot...

JK Lakshmi Cement (JKLC) reported a weak operating performance, which is marginally below the expectation since EBITDA came in at Rs669mn as against the estimate of Rs705mn. Reported EBITDA/tonne came in at Rs380 v/s Rs503 and Rs381 in 3QFY15 and 2QFY16, respectively. EBITDA margin stood at ~10.3% (down 324bps yoy). Sales volume (including clinker of 0.166mnT) grew strongly by 17% yoy to 1.76mnT. Though we cut our EBITDA estimates by ~15% and ~23% for FY16E and FY17E, respectively to factor subdued realizations, we still maintain our positive view on the stock based on: 1) expected recovery in pricing, 2) strong...

Background: JK Lakshmi Cements (JKLC) is a north Indian Cement player, established in 1982. JKLC has clinker units in Sirohi, Rajasthan and grinding units in Rajasthan, Gujarat and Haryana. The current clinker capacity is 6.2 MTPA and cement capacity is 8.3 MTPA. JKLC derives sales volume from the northern and western regions. The company has 5.3% share of dispatches in the northern and western regions. JKLC is on the spree of capacity...

Q2FY16 Revenue/EBITDA at Rs 6.46bn/Rs 667mn was in-line with our estimates of Rs 6.23bn/Rs 612mn. Volume grew by 20% YoY (led by recent commissioning of Durg unit) while realisation fell 6% YoY owing to weakness in pricing in its markets.

Key highlights: JKLC's Q2 performance was disappointing and below our estimates largely due to lowerthanexpected realisation. We do not see any immediate material improvementinrealisationandbelieveearningswillremaincompressedneartermdueto...

A dismal quarter; gaining market presence key positive JK Lakshmi Cement (JKLC) reported a weak and below than estimated operating performance, as reported operating profit declined by ~25% yoy to Rs667mn (our expectation at Rs701mn). Operating performance was dented by ~6% yoy drop in average realizations at ~Rs3,692/tonne (mainly accounted by higher clinker sales). EBITDA/tonne stood at Rs381 v/s Rs611 seen last year. Sales volume (including clinker of 0.22mnT) growth was impressive as it grew by ~20% yoy and ~6% qoq to 1.75mnT. Subdued operating performance coupled with higher interest outgo and...

The integrated unit of 1.7 mt at Durg (Chhattisgarh), which was recently commissioned in Mar 2015, is operating at ~ 50% capacity utilisation. The associated grinding unit of 1 mt at Cuttack (Orissa) is expected to start production by Oct/Nov 2016 while the other split grinding unit of 0.7 mt at Surat (Gujarat) is expected by Mar 2016. Post the completion of these expansions, the total cement capacity would reach 10 mt (clinker of 6.1 mt).