Geojit is bullish on JK Lakshmi Cement has recommended buy rating on the stock with a target price of Rs 418 in its research report dated June 08, 2018.
Geojit's research report on JK Lakshmi Cement
JK Lakshmi Cement (JKLC) is part of JK group mainly focused in North, West and Eastern regions of India with a consolidated capacity of 12.5MT.Q4FY18 revenue growth was healthy at 11% YoY supported by higher realisation (14% YoY) while volumes witnessed de-growth of 2.5% YoY. Total cost/Ton increased by 10.5%YoY largely due to surge in pet coke & diesel prices, but offset by higher realisation and lower RM cost.
We roll over to FY20E but downgrade our valuation considering higher cost pressure on margins. We value JKLC at EV/EBITDA of 9.5x for standalone and 8.5x for UCWL subsidiary to arrive at a Target Price of Rs418.
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