J K LAKSHMI CEMENT – Analysis

The Company has registered a satisfactory performance. The Company could achieve a capacity utilisation of 91% against 76% of the industry and considerable reduction in consumption of fuel. It recorded a sales turnover of Rs. 1488 Crore and an Operating Profit of Rs. 214.34 during the year ended March 2011.

The expansion work undertaken by the Company for setting up 18 MW Captive Power Plant and 12 MW Green Power Project, through Waste Heat Recovery, have been successfully completed thereby raising the Company's total power capacity to 66 MW.

The Company's Split Location Grinding Unit of 5.5 Lac Tonnes at Jhajjar

(Haryana) is also under way and is to be completed by March 2012.

The Company's Greenfield project of setting up a 2.7 Million Tonnes Cement

Plant at Durg in Chattisgarh is progressing smoothly. The project is

expected to start commercial operation by March 2013.

With above expansion the installed capacity will increase from present 47.45 lacs tonnes to 80 lac tonnes per annum. The turnover will increase only after march 2013.

Cement prices have corrected across regions since May by Rs 15-30/bag driven by poor demand (YTD growth in dispatches is 1%), low capacity utilizations and seasonal weakness due to monsoons.Further, RBI’s recent aggressive rate hike could negatively impact recovery in demand in 2HFY12. We also expect the industry to

witness margin pressure in the short-term on falling cement prices and rising costs (fuel & logistics).

Based on the above the Company may not perform in line with the industry.

The following financials also conform the same.

Net profit of JK Lakshmi Cement rose 35.34% to Rs 22.75 crore in the quarter ended June 2011 as against Rs 16.81 crore during the previous quarter ended June 2010. Sales rose 21.08% to Rs 391.79 crore in the quarter ended June 2011 as against Rs 323.59 crore during the previous quarter ended June 2010.

Particulars	201106	201006	%VAR
Sales	391.79	323.59	21.1
Other Income	1.08	1.79	-39.7
PBIDT	80.21	58.11	38
Interest	21.91	12.03	82.1
PBDT	58.3	46.08	26.5
Depreciation	24.66	21.7	13.6
PBT	33.64	24.38	38
Tax	0	8.8	-100
Deferred Tax	10.89	-1.23	LP
PAT	22.75	16.81	35.3

The yearly performance of the Company is as given below.

J K Lakshmi Cement		201103 (12)			201003 (12)
Net Sales		1318.83			1490.5
Other Income		43.04			44.16
Total Income		1396.93			1537.58
Total Expenditure		1173.62			1071.7
Operating Profit		223.31			465.88
Interest		59.91			54.98
Gross Profit		163.4			410.9
Depreciation		84.61			80.03
Profit Before Tax		78.79			330.87
Tax		4.54			32.74
Deferred Tax		15.12			57
Reported Net Profit		59.13			241.13
Extraordinary Items		11.91			4.27
Adjusted Net Profit		47.22			236.86
Equity (FV=5)		61.19			61.19
Earnings Per Share		4.63			19.28
Book Value-Unit Curr		84.27			80.89
DUPONT MODEL	201103		201003	BALSHEETRATIO			201103	201003
PBIDT/Sales(%)	15.01		28.34	Key Ratios
Sales/Net Assets	0.72		0.85	Debt-Equity Ratio			0.94	0.88
PBDIT/Net Assets	0.11		0.24	Long Term Debt-Equity Ratio			0.94	0.88
PAT/PBIDT(%)	26.48		51.76	Current Ratio			1.32	1.74
Net Assets/Net Worth	2		1.96	Turnover Ratios
ROE(%)	4.67		27.18	Fixed Assets			0.7	0.9
				Inventory			15.28	23.35
RATIO	201103		201003	Debtors			50.66	62.87
Price Earning (P/E)	11.03		3.75	Interest Cover Ratio			2.55	15.37
Price to Book Value ( P/BV)	0.61		0.89	PBIDTM (%)			14.41	26.39
Price/Cash EPS (P/CEPS)	4.42		2.8	PBITM (%)			8.72	21.53
EV/EBIDTA	6.94		3.4	PBDTM (%)			10.98	24.99
Market Cap/Sales	0.42		0.54	CPM (%)			9.66	19.53
				APATM (%)			3.97	14.67
				ROCE (%)			6.48	20.36
				RONW (%)			5.72	26.04

From the above it can be seen that ROE has reduced. The profit margins have reduced substantially.Thus the investment in the Company will give return in the longterm and in line with market movement.