Sharekhan's research report on JK Lakshmi Cement
Average cement prices in the West and North (together ~75% of sales mix) in Q4FY2021 till date are up 3.7% and 2.0% versus Q4FY2020. Prices in the East rose sharply by 7.4% m-o-m in March 2021 leading to positive q-o-q growth for Q4. We expect JKL to benefit from strong non-trade demand environment in North and West and sustained healthy trade demand in East. Company to raise equity at UCW level through a rights issue for its Rs. 1,500 crore expansion plan, which is expected to ease clinker and capacity constraints.
Outlook
We retain a Buy rating on JK Lakshmi Cement (JKL) with a revised PT of Rs. 525 given attractive valuations and healthy net earnings estimates over FY2021E-FY2023E.
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