JK Lakshmi Cement (Q3 FY13)

India Infoline News Service | Mumbai |

We maintain our BUY rating on the stock with a revised price target of Rs162.

CMP Rs134, Target Rs162, Upside 21%
  • JK Lakshmi Cement Q3 top-line grew by 12% yoy, marginally below our estimates. Average realization stood at Rs3,930/ton up 12% yoy but down 2% qoq basis. Volume growth of 3% yoy was below our estimates.
  • OPM stood at 19.9% higher than our estimate of 19.4%. Margins were better than our estimate on back of lower freight and power cost.
  • PAT for JKCLE de-grew by 16%yoy (against our expectation of 9%yoy). Higher depreciation (up 33%yoy) resulted in  lower-than estimated PAT.
  • In light of higher average realizations in the northern and western region, we believe realisation for JKLCE will remain buoyant in the near-term. This coupled with lower coke prices could translate into margin expansion going forward. We maintain our BUY rating on the stock with a revised price target of Rs162.
Result table
(Rs m) Q3 FY13 Q3 FY12 % yoy Q2 FY13 % qoq
Net sales 4,937 4,401 12.2 4,914 0.5
Material costs 1,239 825 50.1 937 32.2
Personnel costs 301 235 27.8 291 3.3
Power and fuel costs 911 1,083   (15.9) 1,102   (17.3)
Freight cost 1,041 828   25.8 953   9.3
Other overheads 463 488 (5.1) 503 (7.9)
Operating profit 982 942 4.2 1,128 (13.0)
OPM (%) 19.9 21.4 (152 bps) 23.0 (308 bps)
Depreciation (341) (256) 33.3 (325) 5.0
Interest (225) (229) (2.0) (223) 0.7
Other income 125 155 (19.4) 155 (19.5)
PBT 541 611 (11.6) 735 (26.5)
Tax (128) (119) 7.6 (226) (43.4)
Effective tax rate (%) 23.7 19.5
30.8
Adjusted PAT 412 492 (16.2) 509 (19.0)
Adj. PAT margin (%) 8.4 11.2 (283 bps) 10.4 (200 bps)
Reported PAT 412 492 (16.2) 509 (19.0)
Source: Company, India Infoline Research

Cost analysis
As a % of net sales Q3 FY13 Q3 FY12 % yoy Q2 FY13 % qoq
Material costs 25.1 18.8 635 19.1 603
Personnel Costs 6.1 5.3 74 5.9 17
Power and fuel costs 18.5 24.6 (615) 22.4 (397)
Freight cost 21.1 18.8 228 19.4 170
Other overheads 9.4 11.1 (171) 10.2 (85)
Total costs 80.1 78.6 152 77.0 308
Source: Company, India Infoline Research

Financial Summary
Y/e 31 Mar (Rs m) FY12 FY13E FY14E FY15E
Revenues 17,181 20,507 22,596 29,510
yoy growth (%) 29.9 19.4 10.2 30.6
Operating profit 3,279 4,439 5,164 6,861
OPM (%) 19.1 21.6 22.9 23.3
Pre-exceptional PAT 1,480 2,151 2,453 2,965
Reported PAT 1,087 2,151 2,453 2,965
yoy growth (%) 83.9 97.8 14.0 20.9





EPS (Rs) 12.1 18.3 20.8 25.2
P/E (x) 10.5 6.9 6.1 5.0
Price/Book (x) 1.3 1.1 0.9 0.8
EV/EBITDA (x) 7.8 6.5 5.7 4.4
Debt/Equity (x) 0.9 1.1 1.0 0.9
RoE (%) 13.3 17.1 16.8 17.1
RoCE (%) 11.4 13.9 13.8 16.4
Source: Company, India Infoline Research

BSE 427.85 16.10 (3.91%)
NSE 429.35 17.80 (4.33%)

***Note: This is a NSE Chart

 

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