JK Lakshmi Cement
hosted a conference call on November 06, 2023. In the conference call the
company was represented by Mr Arun Kumar Shukla-President & Director and
Mr Sudhir Bidakar-CFO.
Key takeaways of the call
Trade sales stood at
62% of the total sales.
Lead distance stood at
387 kms in the quarter.
Blended cement is 65%
of the total sales.
Premium cement sales
are 23% of trade sales.
Non cement revenue
stood at Rs 130 cr in Q2FY2024.
The EBITDA per ton is up by around Rs
140/ton. This is on account of increase in volumes, improved realizations,
trade sales, geo mix and premium sales contribution. Increase in Alternate fuel
mix and also decline in lead distance is also the reasons for improved profitability.
Also, softening of fuel cost has led to improved margins.
Clinker production at UCWL stood at 3.84
lac tonnes. Cement sales stood at 4.68 lac tonnes and clinker sales stood at
0.91 lac tonnes in Q2FY2024 in UCWL.
Price difference between premium cement and
green cement stood at Rs 20-25 per bag and EBITDA per ton difference stood at
Rs 250/ton.
Interim period: There will be a gap of 6
months between commissioning of clinker capacity and grinding capacity at
Udaipur and during that period the company will use outsourced units in Gujarat
and Punjab to produce cement. Also the company can increase utilization at
Surat as well. The balance clinker will be sold.
The company will be producing clinker in
the range of 40-50% as it is in the stabilization period in Udaipur.
Power
and Fuel:
Fuel mix: Pet coke stood at 46%, 30% coal
and balance others.
The company has pet coke inventory of 3
months consumption. In Q2FY2024 Kcal cost was Rs 2.04 and the company expects
the same to reduce to Rs 1.9 per Kcal in Q3 FY2024.
The company has tied up to source solar power
under captive route for its Durg plant. With the sourcing, the share of
renewable power at Durg plant has increased from 36% to 80%.
With respect to Alternate fuel mix, the
company plans to increase the Thermal Substitution Rate (TSR) from current 4%
to 12% by end of March 2024 and to 20% ultimately.
Expansion:
The company plans to commission the 2.5 million
tonnes grinding unit in UCWL by March or April 2024.
With respect to railway sliding the company
has got the approval and is expect to be commission the same by Q2-Q3 of next
financial year. With respect to conveyor belt, the company is yet to receive
the approval, however it is progressing well.
The additional capacity expansion of 1.35
million tonnes grinding unit in Surat is expected to be commissioned by
H1FY2026. The company expects to commission the same in phases. Surat is better
profitable market for the company.
Further, the company plans to announce
further brown field expansion at the appropriate time, followed by Udaipur and
followed by Green field expansion at Nagwar and Kutch.
Aligarh wall putty plant is commissioned
and utilisation stood at 75% of the capacity. Alwar putty plant will take some
time as National capital region has banned construction activity. However, the
company plans to do the trial run by end of Q3FY2024.
Debt: At standalone basis gross debt as on Sep 30 ,2023 stood at Rs 680
cr and net debt stood at Rs 140 crore
and on consolidate basis the company had gross debt as on Seo 30,2023 at Rs
1975 and net debt at Rs 1175 cr.
As on standalone basis gross debt is expected at Rs 880 cr as on Mar
31,2024 and Rs 1000 cr as on Mar 31,2025. Net debt is expected to be around Rs
150 cr as on Mar 31,2025.
On consolidated basis gross debt is
expected to peak out at around Rs 2400 cr as on Mar 31,2024 and Rs 2600 cr as
on Mar 31,2025 and net debt to peak around Rs 1600 cr as on Mar 31,2024 and
1800 cr as on Mar 31,2025.
Capex: The company expects to incur CAPEX of Rs 500 cr in JK Lakshmi and
Rs 700 cr in UCWL for Fy2024 which includes capex already spent and Rs 500 cr in
Jk Lakshmi and Rs 100 cr in UCWL for FY2025.
Outlook:
The company expects
volume growth of in the range of 12-15% in H2FY2024.
Prices are expected to go up by Rs
50-100/bag QoQ in Q3FY2024.
The company expects EBITDA per ton of Rs
1000 per ton in next 18 -24 months. The company had taken lot of actions which has
come through.
The company expects demand and margins to
be good in coming quarter.
The company plans to increase the value
added product contribution from current Rs 500 cr to Rs 1000 cr by next 3
years.
East region is expected to grow in double
digit going forward as well.
|