JK Lakshmi Cement - Q2FY21 First Cut - ICICI Direct

(CMP: Rs. 290; MCap: Rs. 3,409 crore)

JK Lakshmi's Q2FY21 performance remained above estimates mainly on account of better than expected sales volume for the quarter. The company managed to improve its margins despite fall in the realisations leading to better than expected overall performance for the quarter.

Q2FY21 Earnings Summary

- The plant utilisation stood at 82% for the quarter led by improved sales volumes. Total sales volume grew by 16% YoY to 2.4MT that remained ahead of our expected sales volume of 2.1MT. On the other hand, realisation dipped 3.7% YoY to Rs. 4,371/tonne (vs I-direct est: Rs. 4,250/t). This led to revenue growth of 11.7% YoY to Rs. 1044.8 crore (vs I-direct est: 907.5 crore).

- Though realisation declined, total production cost per tonne also declined by 6.0% YoY leading to 198bps YoY expansion in margins. The company reported EBITDA margins of 17.9% (vs I-direct est: 16.2%) and EBITDA per tonne of Rs. 781/tonne (vs I-direct est: Rs. 690/t). The major contributors to cost reductions were P&F and freight costs that were down by 15.1% YoY (led by lower petcoke prices) and 5.1% YoY respectively. Absolute EBITDA came in at Rs. 186.7 crore (up 25.6% YoY) that remained ahead of our estimated EBITDA of Rs. 147.3 crore

- Company reported net profit growth of 75.5% YoY to Rs. 80.6 crore due to higher other income (up 196% YoY to Rs. 18.3 crore) and lower interest costs (down 0.8% YoY to Rs. 38.1 crore)

The progress on the Waste Heat Recovery Unit III Project at Sirohi is as per schedule and will be commissioned by Jul-21. Company's subsidiary Udaipur Cement Works is expanding its cement capacity by 2.5MT which is likely to be commissioned in Dec-23E. On completion of this expansion, consolidated capacity of JKLC and UCWL will enhance to 16.4MT. We will come out with a detailed report post the conference call.

Shares of JK LAKSHMI CEMENT LTD. was last trading in BSE at Rs.290.2 as compared to the previous close of Rs. 281.7. The total number of shares traded during the day was 33984 in over 1408 trades.

The stock hit an intraday high of Rs. 293 and intraday low of 276.5. The net turnover during the day was Rs. 9755723.

Source : Equity Bulls

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