Capitaline

Analyst Meet / AGM 19-May-17

Conference Call

JK Lakshmi Cement

Guides demand growth at 6-7%, capex of ~ Rs 200 crore in FY18

The company has conducted a conference call on 18^thMay 2017 to discuss the results for the quarter ended March 2017 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 19 per cent decline in standalone net profit at Rs 20.85 crore for the fourth quarter ended March 2017, hurt by increase in input costs. Total income during the quarter under review stood at Rs 930.57 crore against Rs 837.21 crore in the year-ago period, up 11 per cent. During the quarter January-March 2017, the company recorded a volume growth of 6 per cent over the corresponding quarter of last year. However, increases in petcoke and diesel prices offset the benefit of the volume growth, the company's EBIDTA (earnings before interest, taxes, depreciation and amortisation) recorded therefore only a marginal increase at Rs 97.85 crore in the quarter January-March 17 as against Rs 97.77 crore in the corresponding quarter of last year.

The Company increased cement production capacity at Durg plant from 1.8 million tonnes to 2.7 million tonnes during the January-March quarter of 2016-17. The company's project in its subsidiary company Udaipur Cement Works Ltd (UCWL) has also commissioned its Kiln with the capacity of 1.24 million tonnes in March 2017. With this company's total capacity including UCWL stands enhanced to nearly 13 million tonnes.

The company is plans to install 20MW captive power plant in Durg, Chattisgarh which is expected to get commissioned in October 2018. Apart from that, waste heat recovery system of 7MW will get commissioned by October 2017. The management expects cost savings of Rs200/tonne after commissioning of WHRS and captive power plant. It is also in the process of installation of a conveyor belt which is expected to get commissioned in Q3FY18. The management expects this process to get completed in next 4-5 months, which will lead to a cost saving of ~Rs35-40/tonne.

The company guides cement demand growth to be at 6-7% in FY18 on pan-India level. The management believes that demand-supply dynamics is much better in the North region, whereas, East region continues to struggle with oversupply situation.

The Company incurred capex of Rs 200 crore for FY17. The management guides capex of Rs 200 crore for FY18 and Rs 50 crore for FY19. The capex includes maintenance capex.

The Company incurred an average pet coke cost of Rs 6,000/tonne in Q4FY17 as against Rs 5,200/tonne in Q4FY16. Current pet coke prices are at Rs 6,300/tonne.

The Company capacity utilization was at 73% for plant in the West region in Q4FY17. Durg plant operated at utilization rate of 92%. Sales volume from East plant was at 0.53mt (including clinker sales of 18KT). Clinker production from Sirohi/Durg plant was at 1.25mt/.34mt in Q4FY17.

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