JK Lakshmi Cement Ltd. share price target

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...

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...

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...

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).

Background: JK Lakshmi Cements 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...

Q1FY16 EBITDA at Rs 507 mn was higher than our estimate of Rs 356 mn on account of better than expected operating margin (8.6% vs. estimate of 6.2%) which is led by lower other expenses. Sales volume grew strongly by 15% YoY (broadly in-line) led by recent commissioning of East capacity while realisation declined 14% YoY on account of weak pricing in its key markets.

JK Lakshmi Cement (JKLC) reported a weak and below than estimated operating performance as operating profit declined by ~55% yoy to Rs507mn as against our expectation of Rs638mn. Weak operating performance was bruised by ~14% yoy drop in average realizations at ~Rs3,569/tonne (our assumption was Rs3,615/ tonne). EBITDA/tonne stood at Rs306 v/s Rs786 seen last year. Operating cost/ tonne has been under control as it declined by ~3% yoy. Sales volume (including clinker) growth has been impressive as it grew by ~15% yoy and ~7% qoq to 1.66mnT. Subdued operating performance coupled with higher interest outgo and...

Background: JK Lakshmi Cements 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 6.6 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 doubling its cement capacity by...