HDFC Securities' research report on JK Lakshmi Cement
In Q4FY23, JKLC reported a subdued 3% YoY volume growth and even the EBITDA margin recovered a modest INR 40 per MT QoQ to INR 687. However, JKLC is confident of ramping up the margin to INR 800 per MT in FY24E and towards INR 1000 per MT by H2FY25E, driven by improving geo-mix, increasing trade sales, increasing green energy share, and optimisation of the supply chain. Cooling off energy prices should also boost the margin rebound. The upcoming Udaipur expansions in FY24E should boost volume growth.
Outlook
We maintain our BUY rating on JK Lakshmi Cement (JKLC) with a lower target price of INR 815/share (8x Mar-25E consolidated EBITDA).
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