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JK Lakshmi Cement shares fall 3%; Kotak Securities downgrades stock to 'reduce'

The stock continues to be under pressure as the company's December quarter earnings failed to impress the market.

January 31, 2020 / 11:58 AM IST
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JK Lakshmi Cement share price fell 3 percent in the morning trade on BSE on January 31 and looked on course to extend its losing run into the fourth consecutive session.

The stock continued to be under pressure as the company's December quarter earnings failed to impress the market.

Domestic brokerage firm Kotak Securities downgraded the stock to 'reduce' from 'add' with a fair value of Rs 325, down from an earlier fair value of Rs 350.

"JK Lakshmi Cement’s Q3FY20 EBITDA was 11 percent lower than our estimate led by lower volumes and realizations, partially offset by lower costs. Operational performance suffered due to a weak demand in the North and sharp price correction in the East during Q3FY20. We cut EBITDA by 7 percent for FY2020E and 2 percent for FY2021E," Kotak said.

As per the brokerage, the company is evaluating various expansion opportunities and expected to announce expansions in the coming quarters. Net debt remains elevated in FY2020E due to higher working capital, whereas the start of growth capex should limit deleveraging in FY2021-22E.


The company's standalone net sales stood at Rs 1,004.95 crore in December 2019, up 7.48 percent from Rs 935 crore in December 2018.

Quarterly net profit stood at Rs 49.17 crore on a standalone basis, up 233.36 percent from Rs 14.75 crore in December 2018.

Standalone EBITDA came at Rs 166.59 crore in Q3FY20, up 48.79 percent YoY from Rs 111.96 crore in Q3FY19.

On a consolidated basis, the company's net sales, net profit and EBITDA rose 3.8 percent, 452.74 percent and 59.44 percent, respectively.

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Moneycontrol News
first published: Jan 31, 2020 11:58 am
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