Anand Rathi
JK Lakshmi Cement (Buy)
Target: ₹380
CMP: ₹282.50
The lockdown hit JK Lakshmi’s Q1 performance. Its revenue/ EBITDA/PAT fell 21 per cent , 15.6 per cent and 36 per cent respectively. The high Covid-impacted West and frequent local lockdowns in the East pushed cement volumes down 18 per cent y-o-y.
The management’s focus on de-levering continues; it is keeping on hold its expansion in the North. The East and West continue to suffer from cities being locked down; pockets in the North are also locked down. The migrant labour issue resolution, firm prices, ris
The management is still keeping its proposed 2.5 mt capacity expansion in the North on hold.
The ramping-up of its Cuttack GU suffered from the lockdown. Gross debt (standalone) was ₹1,500 crore as against ₹120 crore debt, the company availed of the moratorium, and talked about repaying ₹200 crore debt each in FY21 and FY22.
We retain our Buy call, with a ₹370 target (₹325 earlier).