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Business News/ Markets / Stock Markets/  JK Lakshmi Cement shares rise 9% after net profit jumps 68% in Q3

JK Lakshmi Cement shares rise 9% after net profit jumps 68% in Q3

JK Lakshmi Cement jumps 9% after reporting strong Q3 FY24 results, with a 68.50% rise in net profit and 9% increase in revenue. The company achieved a capacity utilization of 79% and a clinker capacity utilization of 105% in the quarter.

JK Lakshmi Cement implementing green initiatives and expanding clinker capacity at Durg plant (HT)Premium
JK Lakshmi Cement implementing green initiatives and expanding clinker capacity at Durg plant (HT)

JK Lakshmi Cement, a manufacturer and supplier of cement and related products, jumped sharply in today's trading session to hit an all-time high of 999.90 apiece with a gain of 9% after the company reported a good set of numbers for the December-ending quarter.

The company on Thursday reported a 68.50% rise in its net profit to 124 crore for Q3 FY24, compared to a net profit of 73.59 crore in the same period last year. Total revenue for the quarter came in at 1,589 crore, an increase of 7% from 1,489 crore.

During the quarter, the company achieved a capacity utilisation of 79% and a Clinker capacity utilisation of 105% in Q3 FY24. Notably, its power and fuel costs decreased to 327 crore from 434.4 crore in Q3 FY23, marking a significant 25% year-on-year decline. This reduction contributed to an improvement in the company's profitability. Additionally, higher volume and a more favorable product and sales mix have further bolstered the company's performance, resulting in a robust set of financial results for Q3 FY24.

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The company said it is implementing a project to enhance its TSR from 4% to 16% in a phased manner at its Sirohi Cement Plant as a part of its green initiatives. It is also enhancing its WHR capacity by 3.5 MW at Sirohi, which will come into the stream in the fourth quarter of FY24.

The company has tied up under the Captive Route, sourcing 40 MW of solar power for its integrated cement plant at Durg in Chhattisgarh. With this sourcing, the share of renewable power at Durg Cement Plant has increased from 36% to 80% since October 2023.

On the Capex front, the company's subsidiary, Udaipur Cement Works Ltd. (UCWL), successfully commissioned its second clinker line of 1.50 million tonnes per annum in October 2023, whereby its clinker capacity doubled to 3 million tonnes per annum. The company expects the cement grinding capacity of 2.5 million tonnes per annum to be commissioned towards the end of the current quarter.

The company said it is expanding the clinker capacity at its integrated cement plant at Durg in Chhattisgarh by putting up an additional clinker line of 2.3 million tonnes per annum and four cement grinding units aggregating to 4.6 million tonnes per annum at Durg in Chhattisgarh, as well as three split-location cement grinding units with an aggregate cement grinding capacity of 3.4 million tonnes per annum at Prayagraj in Uttar Pradesh, Madhubani in Bihar, and Patratu in Jharkhand, according to the company's Q3 earnings filing.

Also Read: LIC share price rises 5% to scale 52-week highs post Q3 results; Net profit rose 49% year-on-year

According to the company, the project is likely to cost 2500 crore and is proposed to be funded through term loans from banks of 1750 crore and balances through internal accruals. The company is also putting up a railway siding at its Durg Cement Plant for 325 crore to be funded through a debt of 225 crore & Balance from internal accruals.

Considering the government's focus on infrastructure development, higher budgetary allocation towards infrastructure development, and various other initiatives for housing & road development, the outlook for the cement sector is quite positive in the coming years.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.

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Published: 09 Feb 2024, 10:03 AM IST
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