Few highlights of the stock
Total installed capacity : 13.90 MTPA
EPS expected to increase in next 2 qtrs Vs last year.
P/E @ 20.13 where as industry avg is @ 39.98.
Proposal to set up greenfield project @ pannan MP & UP
Key markets : North, East,West and Central.
Capacity mismatch in some regions ???
Good profit growth over last 5 years
Key markets:
The northern and western regions of India, mainly comprising of Rajasthan, Gujarat, Punjab, Haryana and parts of U.P accounts for around 75% of total revenues of the company
Analysis by value-mining.in
Net profit of the company stood at Rs.426.22 crore in FY22 as compared to Rs.363.82 crore in FY21, up 17.15%.
The Net worth of the company stood at Rs.2452.35 crore in FY22 as against Rs.2078.92 crore in FY21, up 17.96%. The equity share capital of the company is Rs.58.85 crore at the end of the fiscal year ended March 2022. Total reserves and surpluses of the company stood at Rs.2393.50 crore at the end of FY22 as compared to Rs.2020.07 crore at the end of FY21, up 18.47%.
The current ratio of the company stood at 1.34 in FY22 as against 1.00 in FY21. The ideal current ratio of a company should be above 1.33. So, the current ratio of the company is above the ideal minimum ratio, which is a positive sign.
The debt-equity ratio of the company stood at 0.39 times for the financial year ended in March 2022 as compared to 0.54 times as of 31 March 2021.
Return on equity of JK Lakshmi Cement stood at 18.43% in FY22. ROE of the company looks pretty impressive when compared to the industry average of 9.7%. The management of the company is reinvesting most of the profit to grow the business at a very attractive rate of return. It means that the management is serious about maximising the shareholdersâ return.
JK Lakshmi Cement has a ROCE of 20.01%. This is a very good return. It looks more impressive when compared to the cement industry average of 10%.
The company has proven it can reinvest in the business and generate higher returns on that capital employed, which is very attractive.
What could be the potential triggers for a positive PE re-rating? Realisations per MMT has already improved a bit, right? How much more room is there to improve realistically?
More of the expansion plans seem to be in the step down subsidiary. Does this affect valuation in terms of a holding company discount?
With the size and geographical footprint of JK Lakshmi, would they be featuring favourably in the list of potential M&As for the big boys in town? Isnât there a valuation arbitrage here that they can leverage?
