Capitaline

Analyst Meet / AGM 20-May-16

Conference Call

JK Lakshmi Cement

Expectspromising demand on good monsoon and government infra projects

The company has conducted a conference call on 19^thMay 2016 to discuss the results for the quarter ended March 2016 and way forward. Dr. Shailendra Chouksey, Whole-time Director and Mr Sudhir Bidkar, CFO of the Company, addressed the conference call.
Key highlights

The Company has reported a standalone net profit at Rs 48.38 crore for the quarter ended March, helped by better sales and cost optimisation measures. The firm had clocked a net profit of Rs 6.05 crore in the year-ago period. Total standalone income of the firm rose 27% to Rs 735.09 crore in January-March quarter of the last financial year from Rs 578.15 crore during the same quarter of 2014-15. The Company steep growth in production and sales along with its relentless efforts to improve efficiency and cutting operation cost has enabled the firm to post profitability of Rs 30.51 crore at PBT level in the quarter ended March 2016 after witnessing losses in the previous three quarters.

The company production and sales has grown by 42% and 39%, respectively, in Q4FY16.The growth majorly comes from the Durg plant of Chhattisgarh which was set up in March 2015.

For FY 2016, standalone net profit was lower at Rs 6.28 crore against Rs 95.60 crore corresponding previous period. Total standalone income was 14% higher at Rs 2,619.85 crore, due to lower cement prices which prevailed in company's market during the entire year.

The plant operated at 100% capacity utilization for Q4FY16 and 69% for the FY16. The plant was able to achieve EBITDA break-even for the quarter. The Company expects it to become cash break-even once the WHRS and railway siding gets commissioned. The company is planning for a 7MW WHRS at this plant with a capex of Rs90 crore which is expected to get commissioned in next 18 months. This will be sufficient to cater to 30% of power requirements of this plant. Clinker capacity at Durg plant is 1.5mt.

Lead distance in the East region is less than 300km and for North region, it is 450 km.

Pet coke price for the quarter was Rs5,000/t which has increased by Rs200/t currently.

The Company newly commissioned Surat Grinding Unit has started trial runs indicating extremely good quality of cement. The work at Company's subsidiary, Udaipur Cement Works project at Udaipur, is progressing at a very fast pace and is as per schedule and is likely to commence production during current fiscal.

The Company northern market and the part of the western markets have a much better demand supply equation and realisation than the rest of the country driven by the infrastructure and road projects. Realisation is lower in East compared to North. The company sells 65% of its volume in Chhattisgarh market from Durg plant. Total sales from the East plant were 0.47 mt for the quarter and 1.12mt for FY16. OPC:PPC mix for this plant was 25:75. Trade: Non-trade mix in the region is 80:20.

On Capex, the Company total capex requirement is Rs250 crore which will include Rs90 crore for 7MW WHRS, Rs30-40 crore for the maintenance, Rs 50 crore for the expansion and de-bottlenecking of Durg plant to 2.7mt and rest for the railway siding. Capex spent till date on the Cuttak plant is Rs25-30 crore.

The Company expects the current fiscal looks promising especially with good monsoon-forecast and likely announcements of government infra projects.

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