JK Lakshmi Cement (JKLC) Shares Surge 7% Following Strong Q4 Results and Dividend Declaration

<ul>
    <li>JK Lakshmi Cement shares surged over 7% in morning trades on Friday following the release of their Q4 results.</li>
    <li>The company's net profit exceeded analysts' expectations, driven by strong operating performance.</li>
    <li>"The beat in net profit was driven by improved operating performance and lower-than-estimated operating costs," said analysts.</li>
</ul>
<p><strong>JK Lakshmi Cement shares rise 7% post Q4 results, driven by strong operating performance and dividend announcement.</strong></p>
<h2><strong>Strong beat led by improved operating performance</strong></h2>
<p>The beat in net profit that helped drive JK Lakshmi Cement share price was driven by strong operating performance. The per tonne profitability or EBITDA per tonne rose 43% YoY to ₹1,032, much above ₹852 estimated by MOFSL. Axis Securities' EBITDA per tonne estimates stood at ₹893. EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortization.</p>
<p>This beat was led by strong improvement in operating performance as sales volume at 3.26 million tonnes rose just 1% year-on-year. Lower-than-estimated operating costs helped, said analysts.</p>
<p>Consolidated EBITDA increased 45% YoY to around ₹340 crore, rising 48% year-on-year. Consolidated revenue from operations at ₹1780.85 crore came slightly lower than ₹1862 crore in the year-ago quarter.</p>
<h3><strong>Dividend announcement</strong></h3>
<p>JK Lakshmi recommended a final dividend of ₹4.50 per Equity Share of face value of ₹5 each (90% payout) for the Financial Year ended 31st March 2024. This dividend announcement is in addition to the Interim Dividend of ₹2 per Equity Share paid by the company, taking the total dividend payout to ₹6.50 per Equity Share.</p>
<h3><strong>Analysts' views</strong></h3>
<p>The cement demand outlook in the country for FY25 remains strong. Analysts, however, are watchful of price upticks in the near term. The cement price hikes at the start of April have mostly not been able to sustain. The onset of the monsoon in June may also keep cement prices range-bound, with a rise expected mostly after the monsoon season. The easing of input prices is nevertheless positive, and the same coupled with rising volumes can still support earnings in the interim.</p>
<p>JK Lakshmi Cement is also expanding clinker and cement capacity by 2.3mtpa and 6.0mtpa (million tonnes per annum) in the next two to three years, which should help support volume growth and market share. The company targets to increase grinding capacity to 30mtpa by FY30 from 16.5mtpa currently.</p>
<p>Analysts at MOFSL have a BUY rating on the stock. However, they will review their estimates after the conference call on 27th May 2024.</p>
<h3><strong>Conclusion</strong></h3>
<p>JK Lakshmi Cement's strong Q4 results, driven by improved operating performance and lower costs, have led to a significant rise in share prices. The company's expansion plans and positive demand outlook further bolster its growth prospects. Investors should, however, remain cautious of short-term price fluctuations due to seasonal factors.</p>