Dear All,
Forwarding you the Result Flash on JK Lakshmi Cement for 4QFY2011 with Buy recommendation and a Target Price of `66 (12 months).
For 4QFY2011 JK Lakshmi Cements registered a 6.2% yoy decline in top-line to `414cr primarily due to a 5% decline in dispatches to 1.33mn tones. The cement realization too declined by 1.3% yoy to `3,112 per tonne. However, on a sequential basis the realizations were higher by 7.6%. On the operating front, the company’s profit declined by 456bp yoy to 18.6%, due to lower realizations and higher power & fuel, freight costs. Per tonne power & fuel and freight costs were higher by 35.9% yoy and 17.2% yoy respectively during the quarter. On the bottom-line front, the company’s net profit fell by 54.4% yoy to `32cr. We maintain a Buy on the stock with a target price of `66.
Exhibit 1: 4QFY2011 Performance
| Y/E March (` cr) | 4QFY11 | 3QFY2011 | % Chg | 4QFY10 | % Chg | FY11 | FY10 | % Chg |
| Net sales | 417 | 315 | 32.3 | 441 | (5.5) | 1,322 | 1,491 | (11.3) |
| Net raw-material costs | 76 | 48 | 58.6 | 93 | (17.8) | 204 | 234 | (12.7) |
| (% of sales) | 18 | 15 | 21 | 15 | 16 | |||
| Power & fuel | 103 | 105 | (1.4) | 80 | 29.1 | 392 | 290 | 35.2 |
| (% of sales) | 25 | 33 | 18 | 30 | 19 | |||
| Staff costs | 24 | 17 | 44.1 | 27 | (9.9) | 81 | 85 | (5.4) |
| (% of sales) | 6 | 5 | 6 | 6 | 6 | |||
| Freight & forwarding | 76 | 68 | 12.8 | 69 | 11.3 | 264 | 252 | 4.4 |
| (% of sales) | 18 | 21 | 16 | 20 | 17 | |||
| Other expenses | 59 | 53 | 11.3 | 70 | (16.2) | 195 | 204 | (4.5) |
| (% of sales) | 14 | 17 | 16 | 15 
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