J.K. Cement: 1QFY17 Result: FIRST CUT - Reliance Securities

- J.K. Cement (JKC) reported a healthy and better-than-estimated operating performance as EBITDA came in at Rs1.66bn (+95% yoy) topping our estimates of Rs1.52bn, mainly supported by better than expected jump in average realization of grey cement (+2% yoy) and improved operating synergies.

- Grey cement EBITDA grew by ~135% yoy to Rs1.0bn, whereas White cement including Wall putty EBITDA grew by ~39% yoy to Rs655mn (40% of blended EBITDA).

- Notably, raw material cost/tonne jumped by ~4% yoy and ~19% qoq owing to clinker purchase from outside due to break down of Silo at Karnataka plant. However, power & fuel cost (-34% yoy and -9% qoq on per tonne basis) and freight cost (-9% yoy and -3% qoq on per tonne basis) led by low cost inventory, new railway line and SGUs aided operating costs.

- Blended EBITDA/tonne stood at Rs879 v/s Rs469 and Rs794 reported in 1QFY16 and 4QFY16, respectively. Grey Cement EBITDA/tonne stood at Rs615 v/s Rs235 reported last year.

- Grey cements sales volume improved marginally by 1.4% yoy at 1.63mnT, whereas White Cement including Wall Putty grew by 25% yoy to 0.26mnT.

- We maintain our positive stance on the stock and will come out with detailed note post the concall.

Shares of J.K.CEMENT LTD. was last trading in BSE at Rs.748.05 as compared to the previous close of Rs. 732.05. The total number of shares traded during the day was 4885 in over 194 trades.

The stock hit an intraday high of Rs. 754.85 and intraday low of 731. The net turnover during the day was Rs. 3616717.

Source : Equity Bulls

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