IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends “Buy” JK Lakshmi Cement.
IIFL said, “ We initiate coverage on JK Lakshmi Cement (JKLC) with a BUY rating and a one-year target price of Rs120. JKLC’s 5.3mtpa cement capacity is located in Rajasthan, Gujarat and Haryana and the company is expanding capacity by 2.7mtpa in Chhattisgarh.
JKLC will be a major beneficiary of the upcycle in the northern, western and eastern regions. Visibility on earnings growth is high for these regions, given improvement in demand growth and continued delays in new capacity additions, report stated.
“We expect 25% Cagr in earnings for FY12–15 boosted by volume growth and margin expansion. JKLC is trading at a compelling 3.8x FY14ii P/E,” brokerage added.
The report was published by IIFL’s Institutional Equities Research desk.