JK Lakshmi Cement (JKCL) reported weak set of numbers for Q2FY19, significantly below our estimates on PAT front. The revenue reported 9.6% yoy growth to Rs851.4cr, ~6% lower than the estimate. This was primarily on account of lower than expected volumes. On account of higher raw material and power costs, EBITDA declined by 4% yoy to Rs91.6cr, in-line with estimate. EBITDA margin contracted by 153bps yoy to 10.8%. Though EBITDA was in-line with estimates, higher than expected interest outgo and marginally lower than expected other income resulted in a sharply lower than expected PAT. PAT was down 41% yoy to Rs7.8cr, 48% below estimates.
Company reported volume growth of 13% yoy (cement + clinker) to 2.1MT, however the realization declined by 3% yoy on account of intense competition in JKCL’s key markets.
Power cost/tn was up 11% yoy to Rs1,054/tn. Thus, EBITDA/tn for the quarter declined 15% yoy to Rs429/tn.
Company has improved its power consumption to 69Kwh/MT during Q2FY19 against 74 Kwh/MT in Q2FY18.
Moreover, company has indicated that the work on 20 MW Thermal Power Project is progressing as per schedule and is likely to be commissioned in Q4FY19E. The commissioning will significantly bring down the costs of Durg unit and would lead to a reduction in power and logistic costs. The grinding unit at Odisha is also expected to be completed by Q4FY19E.
JK Lakshmi Cement Ltd is currently trading at Rs. 266, down by 2.55 points or 0.95% from its previous closing of Rs. 268.55 on the BSE.
The scrip opened at Rs. 271.75 and has touched a high and low of Rs. 271.75 and Rs. 265.10 respectively. So far 23,402 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.
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