JK Lakshmi Cement Ltd., incorporated in the year 1938, is a Mid Cap company (having a market cap of Rs 4183.76 Crore) operating in Cement sector.
Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 1259.84 Crore, up 11.32 % from last quarter Sales of Rs 1131.74 Crore and up 16.88 % from last year same quarter Sales of Rs 1077.92 Crore Company reported net profit after tax of Rs 118.44 Crore in latest quarter.
Investment Rationale
With improved profitability and lack of capex in the standalone business, the brokerage expects FCF generation to continue, which should reduce net debt to INR5b in FY22E (from INR10.2b in FY20), implying net debt-to-EBITDA of 0.7x. JKLC trades at 5.5x FY22E EV/EBITDA and at USD44/t on EV/capacity, which is ~40% discount to its 10-year average. It values the stock at 6.5x Sep’22E EV/EBITDA to arrive at TP of INR440.
Promoter/FII Holdings
Promoters held 46.2 per cent stake in the company as of Dec 30, 2020, while FIIs held 10.7 per cent, DIIs 24.7 per cent and public and others 18.4 per cent
