Feb 15, 2017 01:32 PM IST | Source: Moneycontrol.com
Sell JK Lakshmi Cement; target of Rs 340: Centrum
Centrum is bearish on JK Lakshmi Cement has recommended sell rating on the stock with a target price of Rs 340 in its research report dated February 07, 2017.
Centrum's research report on JK Lakshmi Cement
JK Lakshmi Cement (JKLC) delivered 22% standalone EBITDA growth in Q3FY17, led by production ramp-up in east and cost reductions amid poor demand post demonetisation. As JKLC is operating at peak clinker utilisation in north, we estimate its 5% volume CAGR during FY16-19 will be driven by higher sales in the eastern region.
In the east JKLC is facing cost headwinds as well as weaker realisation (owing to ongoing expansions), moderating recovery in profitability. Amid ongoing capex to reduce power cost at its eastern operations, JKLC will also have to fund clinker expansion in the north to drive volume growth FY19/20 onwards. This will increase capex rate FY19E onwards and mute deleveraging. We maintain SELL with a lower TP of Rs 340.
For all recommendations, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.