Cholamandalam Securities is bullish on JK Lakshmi Cements has recommended buy rating on the stock with a target price of Rs 378 in its research report dated 06 Aug 2018.
Cholamandalam Securities' research report on JK Lakshmi Cements
JK Lakshmi Cements (JKLC) is a north Indian Cement player, established in 1982. JKLC has clinker units in Sirohi, Rajasthan and grinding units in Rajasthan, Gujarat and Haryana. The current clinker capacity is 6.2 MTPA and cement capacity is 11.5 MTPA. JKLC derives sales volume from the northern and western regions. The company has market share of ~6-7% in the northern region and ~9-10% in western regions.
Outlook
JKLC's earnings growth is expected to be driven by (i) Commissioning of new capacities (ii) better realization & improvement in margins on the back of cost saving initiatives and (iii) Healthy demand (mainly led by an increase in infrastructure spending and affordable housing under Pradhan Mantri Awas Yojna). We maintain a BUY rating on the stock, with a target price of INR 378/sh, valuing the company, at a EV/tn of USD 72/tn.
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