Axis Securities has recommended a BUY on JK Lakshmi Cement with a Target Price of Rs. 370, and an upside of 8% from CMP of Rs. 343 and Stop Loss of Rs. 325.
The company reported robust Q2FY21 result with revenue, Ebitda and PAT all showing improvement on YoY basis. The revenue (Rs.1044 crores), Ebitda (Rs.186 crores) and PAT (Rs.80 crores) grew by 12/25/75 percent on YoY basis driven by higher volume, better realization and cost control. Ebitda margin came at 17.9% against 15.9% reported last year.
The cement demand has also picked up on the back of demand from institutional segment owing to increased infra and construction activities which is well supported by rural demand. Since company drives majority of its revenue from north region, the region witnessed good demand and going forward demand is expected to sustain.
The cement prices have also improved on the back of rising demand which augurs well for the company and normally cement companies report better numbers in the 2nd half of the year so further improvement in performance is expected.
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