JK Lakshmi Cement Share Price up by 7% After Q4 Results

JK Lakshmi Cement's share price surged over 7% in early trading on Friday, May 24th, following the release of its Q4 results. The stock opened at ₹830 on the National Stock Exchange (NSE) and climbed to a high of ₹852.85, representing a gain of more than 7% from Thursday's closing price.

Q4FY24 results, aligning with market expectations, propelled the surge in JK Lakshmi Cement shares. JK Lakshmi Cement witnessed a substantial 41% increase in profit during Q4FY24, reaching ₹162.1 crore, up from ₹114.8 crore in Q4FY23. Despite the profit increase, JK Lakshmi Cement's revenue declined by 4.4% in Q4FY24, dropping from ₹1,862.1 crore in Q4FY23 to ₹1,780.9 crore.

JK Lakshmi Cement's Ebitda surged by approximately 45% to ₹336.6 crore in the March quarter of FY24, a significant increase from the ₹232.6 crore recorded in the corresponding period of FY23. Consequently, the Ebitda margin witnessed a substantial expansion of 640 basis points to 18.9% in Q4FY24, compared to 12.5% in Q4FY23.

Vinita Singhania, chairperson & managing director (CMD) of JK Lakshmi Cement said, "The profitability of the company improved on account of higher volume, better product & sales mix and reduction in fuel cost."

JK Lakshmi Cement's consolidated net profit surged by 41% YoY, reaching ₹159.85 crore, exceeding analyst projections. Motilal Oswal Financial Services had estimated a net profit of approximately ₹140 crore. Axis Securities had anticipated a net profit of around ₹132 crore.

The surge in net profit, which propelled JK Lakshmi Cement's share price, was attributed to robust operational performance. Per-tonne profitability, known as EBITA per tonne, witnessed a significant increase of 43% year-over-year to ₹1,032, far exceeding MOFSL's estimate of ₹852. Axis Securities' EBITA per tonne estimate was set at ₹893. EBITA is an acronym for Earnings Before Interest, Tax, Depreciation, and Amortization.

JK Lakshmi proposed a final dividend of ₹4.50 per equity share with a face value of ₹5 (90% payout) for the financial year ending March 31, 2024. The final dividend announcement supplements the interim dividend of ₹2 per equity share previously paid by the company, bringing the total dividend payout to ₹6.50 per equity share.

While the cement demand forecast for FY25 in the country remains robust, analysts are closely monitoring potential price increases in the short term. Initial price hikes implemented in April have largely failed to hold steady. The arrival of the monsoon season in June is expected to keep cement prices within a narrow range, with substantial price increases anticipated only after the monsoon subsides. However, the decline in input costs is a positive development and, combined with rising sales volumes, is likely to support earnings in the immediate future. 

JK Lakshmi Cement plans to increase clinker production capacity by 2.3 million tonnes per annum (mtpa) and cement production capacity by 6.0 mtpa in the next two to three years. The company aims to expand its grinding capacity from 16.5 mtpa to 30 mtpa by the end of fiscal year 2030.