Buy Mid Cap Multibagger Cement Stock For Potential Return Of 19%: ICICI Securities

Leading brokerage firm ICICI Securities has given buy call to JK Lakshmi Cement Ltd with a target price of Rs 745 apiece and potential return of 19%. The current market price of JK Lakshmi is Rs 626 apiece.

JK Lakshmi Cement's (JKLC) Q2FY23 standalone EBITDA of Rs1.39bn (down 15% YoY) was largely in line with our estimates, but above consensus. Volumes, including clinker sales, were flat YoY (down 17% QoQ) while total cost/te rose ~22%/5% YoY/QoQ owing to sustained inflation in fuel prices, according to ICICI Securities. Check vital details pertaining to the stock below:

1. JK Lakshmi Cement Stock Outlook

The current market price of JK Lakshmi Cement is Rs 626 apiece with an intraday gain of nearly 9% as on November 4, 2022. The stock's 52-week high is Rs 683 apiece and 52-week low is Rs 368 apiece, respectively. The company has a market capitalisation of Rs 7373 crore.

2. JK Lakshmi Cement Return

The stock has given a return of 42% in last 5-years, 103% in last 3-years, and 36% in last 3-months.

3. JK Lakshmi Cement Valuation

According to ICICI Securities, "Factoring-in the better realisations and disciplined cost management, we raise our FY23E-FY24E EBITDA by 9-22% and increase the target price to Rs745/sh (earlier: Rs630), based on 7x Sep'24E EV/E on quarterly rollover. Current valuation at our view. Maintain BUY. Key risks: lower demand / prices, and higher costs."

Standalone revenues up 16% YoY at Rs13bn, in line with our estimate. Total volumes (including 0.7mnte clinker) were flat YoY (down 17% QoQ) to 2.31mnte (ISec: 2.5mnte). Blended realisation jumped 17%/1.5% YoY/QoQ to Rs5,651/te led by lower clinker sales QoQ, better product mix, and likely higher share of trade sales and premium products, added ICICI Securities.

4. About JK Lakshmi Cement

JK Lakshmi Cement Limited is a part of the prestigious JK Organisation. This eminent industrial house is over a hundred and twenty five years old and boasts operations in India and abroad with a leadership presence in the fields of tyre, cement, paper, power transmissions, sealing solutions, dairy products and textiles.

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.