Q3FY21 Result Update - JK Lakshmi Cement - ICICI Direct

During Q3FY21, JK Lakshmi managed to sustain its margins on a YoY basis despite an increase in costs leading to a better-than-expected performance for Q3FY21. Revenue in Q3 grew 18.7% YoY to Rs. 1192.8 crore (vs I-direct estimate: Rs. 1121.3 crore). Plant utilisation was at 92% led by improved sales volumes that were up 15.7% YoY to 2.7 MT (vs. I-direct estimate: 2.6 MT). Realisations were also up 2.6% YoY to Rs. 4,426/tonne (vs. I-direct estimate: Rs. 4,356/t). This led to a margin expansion of 97 bps YoY to 16.1% (in line with our estimate) despite cost increase of 1.4% YoY on per tonne basis. Further, higher other income, lower interest cost led to PAT growth of 108% YoY. Progress on the waste heat recovery unit III Project at Sirohi is as per schedule and will be commissioned by July 2021. The company's subsidiary Udaipur Cement Works is expanding its cement capacity by 2.5 MT, which is likely to be commissioned in December 2023E. Post this expansion, consolidated capacity of JKLC and UCWL will get enhanced to 16.4 MT.

Valuation & Outlook

While the b/s remains healthy with D/E of 0.6x, growth concerns beyond FY23E are being addressed with new capacity expansion. With strong demand outlook amid favourable macro, we remain positive on the company. We maintain BUY rating with a revised TP of Rs. 470/share (@ 6x FY23E EV/EBITDA) (earlier TP Rs. 450).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_JKLakshmiCement_Q3FY21.pdf

Shares of JK LAKSHMI CEMENT LTD. was last trading in BSE at Rs.357.2 as compared to the previous close of Rs. 350.4. The total number of shares traded during the day was 53609 in over 1524 trades.

The stock hit an intraday high of Rs. 360.95 and intraday low of 352. The net turnover during the day was Rs. 19180624.

Source : Equity Bulls

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