Hold JK Lakshmi Cement; target of Rs 830: Sharekhan

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Sharekhan's research report on JK Lakshmi Cement

JKL reported in-line standalone revenue, aided by equal growth in both blended realisations and sales volume. EBITDA/tonne came in lower than estimated on account of higher opex/tonne. PAT growth was aided by lower ETR. The company targets Rs. 1,000 EBITDA/tonne over 18-24 months with incremental delta of Rs. 200/ tonne from realisation and the balance from manufacturing and logistics. We believe it would take longer. UCW expansion may get delayed by a quarter to Q1FY2025. The target is to achieve 30mtpa capacity by 2030, through brownfield and greenfield expansions remain intact.

Outlook

We downgrade JK Lakshmi Cement Limited (JKL) to Hold with a revised PT of Rs. 830, rolling forward our valuation multiple to FY2025 earnings and considering unfavourable risk reward at the current valuation.

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JK Lakshmi Cement - 10 -03 - 2023 - khan