The stock of JK Lakshmi Cement zoomed about 12 per cent today, thanks to the company’s strong performance in the June quarter.

JK Lakshmi Cement delivered a healthy 31 per cent jump in sales over last year, and more than doubled its profits to ₹40.5 crore. This is even as larger peers in the sector saw a not-so-great quarter.

On the BSE, the stock surged Rs 25.30 or 11.47% to close at Rs 245.85.

Sales growth

Sales growth during the June quarter was a result of an 18 per cent increase in sales volume as well as higher realisations. While cement prices normalised in May after the resumption of the Binani’s cement plant, which also operates in the northern region, the prices inched up again in June particularly in the western markets, including Maharashtra and Gujarat, due to some supply constraints.

Average prices in the western region during the quarter was ₹316 per 50 kg bag, up by over five per cent from the March 2014 quarter and about seven per cent over the same period last year.

JK Lakshmi Cement is a player in the northern and western pockets of the country. Of late, the company’s focus on rural distribution has aided volumes through a higher market share.

Cost - savings

The company’s operating margins expanded by more than three percentage points to 18.9 per cent in the June quarter. This is despite a higher raw material cost.

The company was able to save on power and fuel expenses, through cost efficiencies. Power and fuel costs as a percentage of sales declined to 20 per cent in the June quarter from 22.6 per cent last year.

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