Published on 13/11/2017 12:36:27 PM | Source: Reliance Securities Ltd
Positive On JK Cement Ltd - Reliance Sec
STOCK IN FOCUS
* J.K. Cement (JKC) surged ~1.5% on Friday’s trade on the expectation of better performance in its 2QFY18 result. JKC declared its 2Q result on Saturday and it continued to report healthy and better than estimated performance as EBITDA witnessed a stellar growth of 32% YoY to Rs2.1bn surpassing our estimate of Rs1.9bn.
* Grey cement and White Cement (including Wall Putty) EBITDA came in at Rs1.05bn (+61% YoY and -18% QoQ) and Rs1.02bn (+11% YoY and +46% QoQ), respectively. Notably, value added products contributed almost 50% to total EBITDA signifying the importance of the segment.
* Grey cement sales volume (including clinker of 0.08mnT) stood at strongly 1.93mnT (+17% YoY and +3% QoQ), while White cement (including wall putty) stood at 0.30mnT (+9% YoY and +16% QoQ).
* Net Profit stood strongly at Rs931mn (+128% YoY and +17% QoQ) surpassing our estimates mainly aided by robust operational performance.
* We expect grey cement performance to improve further in coming months owing to revival in demand in pricing trend. Further, valued added product is likely to remain a cash cow for JKC with new capacity in the next couple of months. We maintain our positive view on the stock.
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