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ICICI Securities: JK Cement Q1 Review - Volume, Profitability To Improve With Expansion 

ICICI Securities: JK Cement Q1 Review - Volume, Profitability To Improve With Expansion

A concrete mixer unloads freshly mixed concrete onto a table at a warehouse. (Photographer: Carla Gottgens/Bloomberg)
A concrete mixer unloads freshly mixed concrete onto a table at a warehouse. (Photographer: Carla Gottgens/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

JK Cement Ltd.’s Q1 FY21 standalone Ebitda declined 29% YoY to Rs 2.15 billion, marginally better than our/consensus estimates of Rs 1.96 billion owing to lower costs.

Total cost/tonne declined 4% YoY (our estimate 1% YoY) owing to reduction/deferment of discretionary costs. Hence, blended Ebitda/tonne was down only 7% YoY to Rs 1,219/tonne (our estimate Rs 1,125/tonne).

We believe ramping-up of new capacity at Mangrol plant would not only provide additional volumes but also improve cost structure and profitability.

Consolidated net debt is likely to peak out at Rs 24 billion in FY21E as JK Cement could generate additional operating cash flow of Rs 10 billion per annum from FY22E which would be sufficient for its future capex requirements.

Click on the attachment to read the full report:

ICICI Securities JK Cement Q1FY21 Result Update.pdf

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