Sharekhan's research report on JK Lakshmi Cement
JKL reported a miss on standalone operational performance for Q4FY2023, led by higher rawmaterial costs. However, cement sales volumes ex-clinker were up ~11% y-o-y, while power and fuel costs per tonne declined by 20% q-o-q. The company remains optimistic on achieving Rs. 1,000 EBITDA/tonne in FY2025 with incremental delta coming from improvement in realisation and efficiencies in manufacturing and logistics. UCW expansion delayed by a quarter to Q2FY2025 although earlier clinker line in Q3FY2024 would help. The target to achieve 30mtpa capacity by 2030 remain intact. UCW right issue planned by June-July 2023.
Outlook
We upgrade JK Lakshmi Cement Limited (JKL) to Buy with a revised PT of Rs. 850, factoring upwardly revised estimates and considering favourable risk reward at the current valuation.
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