Motilal Oswal - JK Lakshmi Cement (JKLAKSHMI) MOSL: J K LAKSHMI CEMENT (Buy)-Beat on volume/revenue, but cost pressures evident

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Motilal Oswal

EUR 120.00 For Business Accounts Only

MOSL: J K LAKSHMI CEMENT (Buy)-Beat on volume/revenue, but cost pressures evident

J K Lakshmi Cement: Beat on volume/revenue, but cost pressures evident

(JKLC IN, Mkt Cap USD0.5b, CMP INR304, TP INR386, 27% Upside, Buy)

Volumes/revenues exceed estimate: Volumes increased 9% YoY (+8% QoQ) to 2.31mt (our estimate: 2.13mt). Realizations of INR4,056/t (+2% YoY, +1% QoQ) were in line with our estimate. Revenue grew 12% YoY to INR9.35b (our estimate: INR8.6b).
Margins impacted by cost push: Cost/t rose 3% YoY (+2% QoQ) to INR3,630 (our estimate: INR3,568) due to higher RM cost/t (due to clinker purchase) and higher other expenses/t. Thus, EBITDA/ton of INR426 (-5% YoY, -1% QoQ) was lower than our estimate of INR485/t. EBITDA increased 4% YoY to INR983m (our estimate: INR1.03b), with the margin at 10.5% (-0.76pp YoY, -0.25pp QoQ). Tax rate stood at 25.4% v/s 32.5% in the year-ago period. PAT, thus, grew 72% YoY to INR148m (our estimate of a loss of INR171m).
Management commentary: (1) Power consumption improved to 69KWH/MT v/s 70KHW/MT in 3QFY18. (2) Other expenses/t were higher due to consultancy charges and maintenance shutdown at one of the kilns. The impact of consultancy charges will continue for two more quarters.

13/02/2019 10 EN

Underlying

JK Lakshmi Cement

JK Lakshmi Cement is engaged in the manufacture of paper, cement, magnetic tape, polyester staple fiber and polyester filament yarn. Through its subsidiaries, Co. is also engaged in the manufacture of iron and steel and the provision of financial and investment services. Co. exports paper to Malaysia, Singapore, Sri Lanka, Bangladesh, Africa and the Middle East. Co. manufactures JK Laser, copier paper for laser printer, Chancellor Bond, JK Compac for computer stationery, Grade 43 cement and paper for packaging and books. Co. also exports audio tapes and is a supplier to recording companies. In addition, Co. exports fibers to Germany, Belgium, Egypt, Bangladesh and Russia.

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INE786A01032 National Stock Exchange of India India

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Motilal Oswal

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MOSL: J K LAKSHMI CEMENT (Buy)-Beat on volume/revenue, but cost pressures evident

Jk Lakshmi Cement: 1 director

MOSL: J K LAKSHMI CEMENT (Buy)-Cost pressure to continue; eyeing on volume growth

With a more favourable environment, J K LAKSHMI CEMENT improves to Positive

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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