Motilal Oswal - JK Lakshmi Cement (JKLAKSHMI) MOSL: J K LAKSHMI CEMENT (Buy)-Volume beat-deleveraging continues

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Motilal Oswal

Team Research

EUR 120.00 For Business Accounts Only

MOSL: J K LAKSHMI CEMENT (Buy)-Volume beat-deleveraging continues

J K Lakshmi Cement: Volume beat; deleveraging continues

(JKLC IN, Mkt Cap USD0.6b, CMP INR378, TP INR435, 15% Upside, Buy)

Volumes healthy but realizations suffer: Volumes increased 32% YoY to 2.94mt, with realizations at INR3,983/t (-1% YoY). Revenue grew 31% YoY to INR11.7b (our est. INR9.8b).
EBITDA driven by higher volumes: EBITDA/t declined 2% YoY to INR446/t (our est. INR520/t) due to lower realization. However, EBITDA increased 30% YoY to INR1.3b (higher than our est. of INR1.2b) due to higher volumes, with margins flat YoY at 11.2%. Tax rate stood at 24.7% v/s -10.7% in the year ago period. Thus, PAT increased 17% YoY to INR433m (v/s est. of INR356m).
Management commentary: (1) JKLC sold 9.65lakh tonnes of clinker in FY19. The company plans to reduce the sales of clinker in future. (2)Work on the 20MW Thermal Power plant in Durg and the grinding unit in Odisha of 0.8mt is likely to be commissioned by 2QFY20. (3) Raw material cost for the quarter was higher due to clinker purchase. (4) Prices declined in the Gujarat market in 4QFY19. The company took a price hike of INR30/bag in the northern markets in Apr'19. (5) No price hikes were witnessed in Chattisgarh in April-May 2019. Odisha, Jharkhand and Bihar witnessed INR30/bag price increase.
FY19 performance: Volumes increased 14% YoY, with sales growth of 14% YoY to INR39b. EBITDA increased 1% YoY to INR4.1b while PAT declined 9% YoY to INR796m, led by higher tax rate.

27/05/2019 1 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

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: J K LAKSHMI CEMENT (Buy)-Volume beat-deleveraging continues

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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