Sharekhan's research report on JK Lakshmi Cement
The company has seen improvement in demand for June and July, with July demand better than last year. Strong rural demand, infrastructure pick up to bring demand to normalcy in Q3FY2021. Expect announcement of much-awaited brownfield expansion in Q3FY2021, which would provide the next leg of growth. Strong cash balance and OCF generation over FY2021E-FY2023E to aid capacity expansion. The company is one of the preferred picks in the sector due to its healthy balance sheet, efficient operations, favourable regional dynamics, and attractive valuation.
We retain our Buy rating on JK Lakshmi Cement (JKL) with unchanged PT of Rs. 372, given attractive valuation and strong 28% CAGR net earnings over FY2021E-FY2023E.
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