Tag: JK Cement

JK Cement approves creation of mortgage against company assets to avail loans up to ₹12,000 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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JK Cement on Tuesday, April 2, said the company’s board has approved increasing the borrowing limit of the firm from ₹7,500 crore to ₹12,000 crore.

The directors have unanimously also considered and approved of four other resolutions. These include, the approval of creating charge / mortgage / hypothecation on the company’s assets against availing loans or facilities up to ₹12,000 crore.

The third resolution is the approval of the postal ballot notice to seek members’ approval for the appointment of Praveen Mahajan and Rakesh Sethi as non-executive independent directors of the company for five years.

The fourth resolution is the appointment of SK Gupta and Divya Saxena, as practicing company secretary each, as the scrutiziser and alternate scrutiniser, respectively, to conduct the postal ballot and e-voting process.

The last resolution is considering the appointment of NSDL to provide the service of sending postal ballot notices and providing e-voting facility for the same.

In an interaction with CNBC-TV18 in February, the company’s management said that it expects volume growth between 8% to 10% for financial year 2025, backed by capacity additions.

“We have new capacities coming up in Prayagraj, and the capacity commissioned in Ujjain will give us more volume leverage. So, overall we still believe that we’ll be able to clock a healthy volume growth next year in spite of a relatively slow start to the market,” Anuj Khandelwal, business head of JK Cement, told CNBC-TV18.

JK Cement shares were trading 0.47% lower at ₹4,263 apiece at 2.20 pm on April 2. The stock has gained 46.41% in the past year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

JK Cement targets 8-10% volume growth in FY25

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Delhi-based JK Cement expects 8-10% volume growth in the next financial year (FY25) riding on capacity additions. The company is hopeful of demand growth for the cement industry in the last quarter of the current financial year (Q4FY24) though the pace could a little sluggish ahead of the general elections.

“We have new capacities coming up in Prayagraj, and the capacity commissioned in Ujjain will give us more volume leverage. So, overall we still believe that we’ll be able to clock a healthy volume growth next year in spite of a relatively slow start to the market,” said Anuj Khandelwal, business head of JK Cement in an interview with CNBCTV18.

The company had completed commissioning of the 1.5-million-tonne cement grinding unit at Ujjain, Madhya Pradesh, a few months ago. It will source its clinker from the Rajasthan integrated plant at Mangrol.

JK Cement is set to end FY24 with a production volume of 16.5 million tonnes for grey cement and overall cement production at 18 to 20 million tonnes, marking nearly 17% growth from the preceding financial year.

With the new facilities, JK Cement is eyeing capacity expansion to 30 million tonnes by March 2026.

JK Cement’s profit grew six fold year-on-year (YoY) to ₹284 crore in the third quarter of FY24 (Q3FY24) from ₹37.2 crore. Revenue increased over 20% to ₹2,935 crore from ₹2,432 crore. Its earnings before interest, tax, depreciation and amortisation (EBITDA) rose to ₹625 crore versus ₹243 crore last year on higher cement volumes, realisations and lower costs. The EBITDA margin was 21.3% versus 10% last year.

The blended EBITDA per tonne at ₹1,330 versus ₹1,028 in the second quarter (Q2FY24) & ₹659 in the third quarter last year (Q3FY23).

The Street is divided on the stock of the ₹32,390 crore market capitalisation company.

While brokerage firm Jefferies upgraded the stock to ‘buy’, raising the target price to ₹4,610 apiece from ₹4,000, Citi has a ‘sell’ rating with a target price of ₹3,625 per share. 

Jefferies cited a healthy Q3 beat with industry-leading volume growth and profitability for a second straight quarter, leading to an upward revision in EBITDA for FY24-FY26 by 5-12%. It said the capacity expansion will keep the company on track for Industry-leading growth.

Citi, however, cited unfavourable risk-reward, noting that the enterprise value per tonne (EV/tonne) of JK Cement was at $140 (including the expanded capacity) versus $65-130 for other regional players.

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Bull vs Bear: JK Cement surges nearly 5% after strong Q3 results; analysts remain divided on stock

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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JK Cement shares rallied up to 5% to trade near year-high levels on Wednesday, January 24, despite a split verdict on the stock by analysts following its third-quarter results.

The stock opened higher and rallied further to hit a high of ₹4,130.20 apiece on BSE in morning deals. The stock traded nearly 1.8% down from its 52-week high levels hit on January 20 after the quarterly results. The stock is up 62% from a 52-week low hit on January 27, 2023.

In a bull case scenario, global brokerage Jefferies upgraded JK Cement to ‘Buy’ and raised the target price to ₹4,610 from ₹4,100 earlier, reflecting a potential upside of around 17%, against 12% earlier, from the current market price.

The brokerage noted that JK Cement reported healthy third-quarter results, which were higher than industry numbers.

The cement manufacturer also announced expansion plans which will keep the company on track for industry-leading growth, Jefferies said in a report. The brokerage also upgraded its FY24-FY26 EBITDA estimate by 5-12%.

Another global brokerage Citi, however, projected a bear case scenario for JK Cement, expressing high valuation concerns. The brokerage downgraded the stock to sell with a target price of ₹3,625, implying a potential downside of 8% from Tuesday’s close.

In a report, Citi stated, “Think risk reward remains unfavourable.” JK Cement is trading at EV/tonne (enterprise value to tonne) of $140 against other regional players at $65-130, Citi said.

JK Cement last week reported a 663.44% surge in net profit to ₹284 crore for the October-December quarter of FY24 compared to ₹37.2 crore in the year-ago period, beating estimates on most counts.

Revenue from operations rose 20.7% to ₹2,935 crore in Q3FY24 compared to ₹2,432 crore in Q3FY23. A CNBC-TV18 poll predicted revenue of ₹2,839 crore for the third quarter.

The company reported higher cement volumes and realisations as well as lower costs.

JK Cement shares were trading 3.81% high at ₹4099.35 apiece on BSE at 11:19 AM.

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JK Cement Q3 profit skyrockets by over six-fold to ₹284 crore, beats estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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JK Cement Ltd on Saturday (January 20) reported a 663.44% year-on-year (YoY) jump in net profit at ₹284 crore for the third quarter that ended December 31, 2023, surpassing estimates on most counts.

In the corresponding quarter last year, JK Cement posted a net profit of ₹37.2 crore, the company said in a regulatory filing. CNBC-TV18 poll had predicted a profit of ₹253 crore for the quarter under review.

The company’s revenue from operations increased 20.7% to ₹2,935 crore as against ₹2,432 crore in the corresponding period of the preceding fiscal. CNBC-TV18 poll had predicted revenue of ₹2,839 crore for the quarter under review.

At the operating level, EBITDA stood at ₹625 crore in the third quarter of this financial year over ₹243 crore in the corresponding period in the previous fiscal. CNBC-TV18 poll had predicted an EBITDA of ₹561 crore for the quarter under review.

EBITDA margin stood at 21.3% in the reporting quarter as compared to 10% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation. CNBC-TV18 poll had predicted a margin of 19.8% for the quarter under review.

Shares of J K Cement Ltd ended at ₹3,961.20, down by ₹32.65, or 0.82 percent on the BSE.

Note: The stock market is engaged in a complete session on Saturday, January 20, and will be closed on Monday, January 22, due to a public holiday in Maharashtra state to mark the inauguration of the Ram Temple in Ayodhya city.

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JK Cement targets 15-16% volume growth in FY24, to focus on premium sales

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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JK Cement hopes to end the current financial year with 15-16% volume growth translating to total sales of 18-18.5 million tonnes.

Anuj Khandelwal, the company’s Business Head, told CNBC-TV18 that the forecast is backed by the strong show in the first half of the year when the volumes grew over 20%, faster than the industry average.

Khandelwal expects earnings before interest, tax, depreciation, and amortisation (EBITDA) per tonne of ₹1,000-1,100 in the second half of the year.

The Delhi-based company recently raised prices by an average ₹10-15 per bag across various regions.

It now wants to shift its focus to sales of premium products which currently contribute around 12%. “By the end of FY24, we would want to take it to around 14%, and maybe in FY25, target 16-17%,” Khandelwal noted.

The company has completed commissioning its new 1.5-million-tonne cement grinding unit at Ujjain, Madhya Pradesh. It will source its clinker from the Rajasthan integrated plant at Mangrol.

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JK Cement’s current market capitalisation is at ₹27,264 crore and competes with Shree Cement, Mangalam Cement and JK Lakshmi Cement.

Shares of the company have gained more than 15% over the last month compared to gains of around 4% in the benchmark Nifty 50.

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JK Cement in pact with Vakrangee to access rural, semi-urban markets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Vakrangee, a financial services distributor, on Friday (October 6) said it has forged a strategic partnership with JK Cement Ltd for lead generation and to facilitate the sale of grey cement products through Vakrangee’s Kendra network.

Vakrangee Kendras represents an exclusive branded format of outlets that offer a wide array of products and services spanning banking, insurance, ATM services, assisted e-commerce, e-governance solutions, and comprehensive healthcare services.

With a remarkable 84% of Vakrangee Kendra outlets situated in tier 4-6 locations, this association promises to bridge the accessibility gap and enable customers in these underserved areas to access cement products conveniently.

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“We will continue to add more products and services and tie up with leading business partners to offer our customers a one-stop solution to all their needs. We are aspiring to be the most trustworthy physical as well as online convenience store across India and positively moving towards Vakrangee Kendra’s new brand philosophy of Aab Poori Duniya Pados Mein,” the company added.

Vakrangee is a technology-driven company focused on building India’s largest network of last-mile retail touchpoints to deliver real-time banking, insurance, e-governance, e-commerce, and ATM services to the unserved rural, semi-urban, and urban markets.

Shares of Vakrangee Ltd ended at Rs 17.14, down by Rs 0.05, or 0.29%, on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

South and West markets in India to see surge in cement price — industry experts analyse the sector trends

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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On September 25, DAM Capital released a report highlighting the favourable pricing dynamics for cement companies in southern India. While, the industry continued to exhibit pricing strength in September, primarily driven by eastern India.

In an interview with CNBC-TV18, P Radhakrishnan, Whole Time Director and CEO at Kesoram Industries, and Navin Sahadeo, Analyst at ICICI Securities, engaged in an in-depth discussion on the current on-ground conditions in the country’s cement sector.

Radhakrishnan began the discussion by announcing a significant development. “We are looking at scaling up the prices by about Rs 30 to 40 in the south Indian market,” he revealed.

Highlighting the broader market trends, Radhakrishnan stated, “West India prices have increased by Rs 50.” This substantial price hike in the western part of the country underscores the overall bullish sentiment within the Indian cement industry.

Sahadeo confirmed the positive outlook for the cement sector and commented on the specific regions witnessing remarkable price hikes. “There is a substantial hike in cement prices in the south, followed by the east,” he noted.

Sahadeo then turned his attention to potential investment opportunities within the industry. “JK Cement in the midcap space is the top pick,” he revealed.

One of the key factors driving the cement industry‘s upward trajectory is the encouraging demand, as highlighted by Sahadeo. “Demand is encouraging given the pre-election year,” he stated. Political as well as infrastructure projects often stimulate cement demand, and this observation indicates that such factors are currently at play.

The recent developments in the Indian cement industry, as discussed by  Radhakrishnan and Sahadeo, offer a glimpse into the sector’s promising future. Price hikes in the south and west, coupled with encouraging demand in the run-up to elections, paint a positive picture for investors and industry players alike. JK Cement’s recognition as a top pick in the midcap space reinforces the belief that the cement industry is set to cement its position as a robust contributor to India’s economic growth.

For more details, watch the accompanying video

Also, catch all the live updates on markets with CNBC-TV18.com’s blog

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

JK Cement arm acquires additional 20% stake in Acro Paints for Rs 60 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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JK Cement Ltd on Thursday said its wholly owned subsidiary JK Maxx Paints Ltd (JKMPL) has acquired an additional 20 percent stake in Rajasthan-based Acro Paints Ltd (APL) for Rs 60.24 crore.

With this acquisition, JKMPL holds 80 percent stake in APL. Last year, the company acquired a 60 percent stake in Acro Paints for Rs 153 crore.

Incorporated on May 18, 1989, APL is a manufacturer of architectural and high-performance paints and coatings. Acro Paints has two manufacturing facilities, which are currently going through capacity expansion and are expected to be completed by Q2 FY24.

Post-expansion, JKMPL will have a capacity of 60,000 KL in decorative and textured paints and 6,700 KL in construction chemicals.

Last month, JK Cement said it will acquire a 100 percent stake in Toshali Cements Private Ltd for Rs 157 crore, in order to expand its footprint into the eastern region.

At present, Toshali Cements has two manufacturing units. One unit is located at Ampavalli, Koraput district of Odisha, which has a clinker capacity of 0.33 MTPA and grinding capacity of 0.198 MTPA.

The second one is a grinding unit located at Choudwar, Cuttack district of Odisha, which has an annual cement production capacity of 0.435 MTPA. JK Cement has an installed grey cement capacity of 20 million tonnes per annum.

Shares of J K Cement Ltd ended at Rs 3,294.80, down by Rs 13.80, or 0.42 percent on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Buzzing cement stocks: Inorganic growth and energy cost decline spark industry optimism

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In Tuesday’s trading session, cement stocks are generating significant attention due to two major news pieces. Firstly, JK Cements has announced its inorganic growth strategy with the acquisition of Toshali Cements Private Limited. The deal, valued at around $30 per tonne, marks JK Cement’s entry into east India.

However, the completion of the acquisition is subject to certain conditions, which may take up to six months. This development presents a positive outlook for JK Cement’s expansion.

The second news item revolves around Sanghi Industries, which reportedly has attracted interest from potential suitors, namely the Nirma Group and JK Organisation. However, these reports have not been independently verified by CNBC-TV18.

According to reports Sanghi Industries is on the block and the primary challenge in finalising a deal could be the valuation, which might act as a potential deal breaker.

Nonetheless, Sanghi Industries possesses an asset with a capacity of 6 million tonnes in west India, including limestone resources, which remains largely untapped. Despite the potential, the asset’s full value has yet to be realised.

Another notable development in the industry is the decline in energy costs, which could act as a significant tailwind in FY24. Prices of petcoke have decreased by $50 to $60 per tonne compared to the previous quarters, including the third.

South African coal prices have also dropped, reaching approximately $100 per tonne, which is $30 lower than the previous quarter and nearly half of the value in quarter three.

However, the benefits of these cost reductions may not be immediately evident in the first quarter due to the presence of high-cost inventory, coupled with relatively stagnant cement prices. Nevertheless, from the second quarter onward, the industry is expected to experience the positive effects of these developments.

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Jefferies forecasts an EBITDA improvement of over Rs 200 compared to the previous year, while Axis Capital anticipates an approximate 25 percent increase in EBITDA per tonne for their coverage universe.

In summary, although cement prices have not experienced significant movement, the industry is poised to benefit from favorable operating leverage due to the upcoming election year, resulting in increased volumes. Additionally, the cooling off of input costs adds to the positive outlook for cement companies.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow