Capitaline

Analyst Meet / AGM 08-Feb-13

Conference Call

JK Lakshmi Cement

In terms of pricing, the March quarter to be better than December quarter

JK Lakshmi Cement conducted a conference call to discuss results for the quarter ended December 2012. Chief Financial Officer- Sudhir Bidkar and the Whole Time Director of the company- Shailendra Chouksey addressed the call.
Key highlights

Revenue rose by 12% to Rs 493.68 crore during the quarter ended December 2012. Sales volume was up 3% to 12.56 lakh tonnes in Q3FY13 as against 12.23 lakh tonnes in Q3FY12.

Net profit for the quarter was down by 16% to Rs 41.24 crore during the quarter.

Q3FY13 was impacted due to delayed monsoon.

Price across all regions has fallen by 30% to 40%. The company saw its cement price decline steeply in November end and December. Some corrections have already taken place on the back of demand resumption in the month of January.

In terms of pricing, the quarter ending March to be better than quarter ended December.

The company's plans to set up a 2.7 million tonne greenfield cement plant at a cost of Rs 1300 crore at Durg in Chhattisgarh is on track and is expected to be commissioned by the end of FY14, but split grinding units in Orissa may get delayed by three months.

Apart from this, it is setting up nine more RMC (ready-mix concrete) plant by the end of FY15 and it has also started work on refurbishing at Udaipur Cement plant - having an installed capacity of 1.4 million tonne at a total cost of Rs 550 crore and it would be completed by the end of 2QFY14. Overall, this would double the capacity in next two years.

The Udaipur plant will focus on Rajasthan market. The plant has tax savings of Rs 60 to Rs 70 per tonne.

The company has done a capex of about Rs 400 crore for the nine months upto December 2012. The capex for FY13 is Rs 600 crore.

Tax rate would be around 30% for the current year.

The reason for decline in other expenses for the quarter was due to lower fuel and advertisement cost.

Debt is around Rs 1300 crore and cash is around Rs 500 crore.

RMC business growth is around 6% to 7%. Of the trade and non-trade mix, the latter contributes 60%.

Northern states are going for elections, so demand is expected to improve in this region.

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