JK Lakshmi Cement Post Strong Result For Sept 2012 Quarter
DSIJ Intelligence / 23 Oct 2012
JK Lakshmi Cement, a north-based cement manufacturing company, has announced better than expected result for the Sept quarter 2012.
JK Lakshmi Cement, a north-based cement manufacturing company, has announced better than expected result for the Sept quarter 2012. The net sales of the company grew by 38.8% on YoY basis to Rs 491.41 crore and net profit has jumped by 684% in the same period to Rs 50.88 crore. The higher jump in the net profit was on the back of low base effect. Even for the topline the overall growth is partially on account of the low base effect and partially jumps in the sales volume and increase in the realisation during the quarter.
The sales volume of the company has increases mainly on the back of the delayed monsoon. Also the company recently commissioned its cement grinding unit in Haryana which helped to achieve higher sales volume on YoY basis. Cement realisation remained strong as cement prices remained firm at an average price of Rs 270-290 per 50 kg bag in the September quarter 2012 compared to Rs 240 per 50 kg bag that was hovering last year same quarter. However, it came down from average Rs 300 levels per 50 kg bag that was achieved during quarter ending June.
| JK Lakshmi Financial Performance | |||||
|---|---|---|---|---|---|
| Particulars | Sept ' 12 | Sept ' 11 | YoY | Jun ' 12 | QoQ |
| Sales | 491.41 | 354.14 | 38.8 | 534.09 | -8.0 |
| Raw Material | 82.1 | 47.14 | 74.2 | 83.74 | -2.0 |
| Power And Fuel | 110.2 | 97.18 | 13.4 | 116.48 | -5.4 |
| Operating Profit | 112.84 | 41.18 | 174.0 | 122.45 | -7.8 |
| Net Profit / Loss | 50.88 | 6.49 | 684.0 | 50.28 | 1.2 |
| OPM(%) | 22.96 | 11.62 | 11.3 | 22.92 | 0.2 |
| NPM(%) | 10.03 | 1.77 | 9 | 9.34 | 0.75 |
The company has reported strong bottomline growth as well. The operating profit of the company strongly grew by 174% on YoY basis to Rs 112.45 crore and EBITDA margin improved by 1100 bps on YoY to 22.96%. The feat was achieved despite a jump in the raw material prices (up by 74%) and freight charges (up by 30%) on yearly basis. The improvement in the operating profit and margin was on the back of steep increase in the realisation by shade higher than 20 per cent. All these above factors have helped the company to report robust numbers during the quarter.
In conclusion we believe company has reported strong numbers for Sept quarter 2012 on the back of strong improvement in the realisation due to lower than expected fall in the cement prices during the quarter. And going forward with the retreat of monsoon, one can see strong recovery in the sales volume as the pick-up in demand will remain strong this time, especially in the wake of the announcement of various major reforms, including that of increasing the infrastructure spend by the government. Further, with the monsoon reaching its peak levels, one can start expecting a reversal in the cement prices too in the coming months.
Expansion Plan
The company has in the April month commissioned the cement grinding unit in Haryana and is in the process of expansion of capacity through a Greenfield project of 2.7 MTPA in DURG Chhattisgarh taking the total cement capacity from current 5.3 MTPA to 8.5 MTPA by Oct 2013. For the expansion the company has envisaged the project cost at Rs 1250 crore. Of the total project cost the company will raise Rs 850 crore through debt and rest will be from internal accruals. The company has already done the financial closure for its debt requirement and as on 31st March 2012 the company has already spent 440 crore. The project is expected to schedule to go on stream by September 2013
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