Last year in February, I had posted about JK Lakshmi Cement. It has given very good returns in the last year (from close to 60 to 160 today).
JK Lakshmi cement is setting up a Greenfield cement plant of 2.7 MT at Durg, Chhattisgarh with a capital outlay of 1250 crore, which is expected to be commissioned by Q3FY14. Also, it is in process of reviving its subsidiary, Udaipur Cement works, which currently has a capacity of 1 MT. The company will invest 100-150 crore in this subsidiary. As the 0.55 MT grinding unit at Haryana is fully stabilised and after the commissioning of 2.7 MT Greenfield plant at Durg by Q3FY14, the company will have a total cement capacity of 8.1 MT. However, the full benefit of the Durg expansion will be seen in FY14E.
Q3'13 is expected to be flat or decline slightly in terms of margins. Currently, there is good traction in cement sales from Rajasthan and Gujarat, where JK Lakshmi has good presence. Jan-Mar quarter is usually the best quarter for cement dispatches.
Overall, I am positive about the prospect of the company and I think the best days are yet to come.
Abhishek, hats off to your analysis of cement sector.. I still remember reading your initial post on JK Lakshmi 1 year back..
ReplyDeleteI had even posted about all cement stocks hitting 10 year high in dec 2011..
http://www.theequitydesk.com/forum/forum_posts.asp?TID=3496
But I really didn't have courage to invest in dec 2011 ( Due to my in experience)
I guess all sectoral stocks hitting multi year high was a good technical signal as well??
Congrats !!!
Whats your analysis of cement sector as a whole? Is steam still left in them for next 2-3 years?
Regards
Rohit
I think the rally in cement has a lot of steam left. If one can buy on dips or SIP in a couple of strong companies over a 2-3 year period, the probability of outperforming the index is high.
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