Investment Memo: JKCEMENT

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Our Rating:

Mehabe score: 8
G Factor: 4
Piotski Score: 8
The stock has a rating . The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 8.

Description

JK Cements is engaged in the manufacturing and selling of Cement and Cement related products.(Source : 202003-01 Annual Report Page No:87)Site: JKCEMENTMain Symbol: JKCEMENT

Price Chart

Technical Analysis

• Stock trades at 3077.0, above its 50dma 2945.41. It also trades above its 200dma 2491.32. The stock remains bullish on techicals
• The 52 week high is at 3289.00 and the 52week low is at 1412.30

Price Chart

P/E Chart

Sales and Margin

Strengths

– has delivered good profit growth of 65.10% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 18.89%

Weakness

– The company has delivered a poor sales growth of 8.66% over past five years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -6.53%

Competition

– The industry trades at a mean P/E of 22.7x. Shree Cement trades at the industry’s max P/E of 44.41x. JKCEMENT trades at a P/E of 33.5x
– Industry’s mean G-Factor is 5.3 while the mean Piotski score is 9.0. JKCEMENT has a G-Factor of 4 and Piotski scoreof 8.
– Average 1 month return for industry is 12.3%. The max 1- month return was given by JK Lakshmi Cem.: a return of 21.3 %

Quarterly Results

• Sales for period ended Mar 2021 is Rs 2134.0 cr compared to Rs 1546.0 cr for period ended Mar 2020, a rise of 38.0%
• Operating Profits reported at Rs 444.0 cr for period ended Mar 2021 vis-vis 352.0 for period ended Mar 2020 .
• Operating Margins contracted -196.2 bps for period ended Mar 2021 vis-vis Mar 2020 .
• The EPS for Mar 2021 was Rs 27.94 compared to Rs 28.39 for previous quarter ended Dec 2020 and Rs 21.24 for Mar 2020

Profit & Loss Statement

Profit&Loss Comments

• Company reported sales of Rs 6606.0 cr for period ended Mar 2021 vis-vis sales of Rs 5802.0 cr for the period ended Mar 2020, a healthy growth of 12.2%. The 3 year sales cagr stood at 10.8%.
• Operating margins expanded to 24.0% for period ended Mar 2021 vis-vis 21.0% for period ended Mar 2020, expansion of 300.0 bps.
• Net Profit reported at Rs 710.0 cr for period ended Mar 2021 vis-vis sales of Rs 492.0 cr for the period ended Mar 2020, rising 30.7%.
• Company recorded a healthy Net Profit CAGR of 34.8% over the last 3 years

Balance Sheet Statement

Cash Flow Statement

Cash Flow comments

• CashFlow from operating activities was positive.
• CashFlow from operating activities: Rs 1590.0 cr for period ended Mar 2021 vis-vis Rs 1372.0 cr for period ended Mar 2020

Sales Growth

Profit Growth Statement

Profit Growth Statement

Stock Price CAGR

Return of Equity

General Comments

– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 21.0% compared to 17.0% over the last 3 Years.
– The stock has given a return of 105% on a 1 Year basis vis-vis a return of 59% over the last 3 Years.
– The compounded sales growth on a TTM bassis is 14% vis-vis a compounded sales growth of 11% over the last 3 Years.
– The compounded profit growth on a TTM basis is 44% vis-vis a compounded profit growth of 35% over the last 3 Years.

Ratios

Shareholding Pattern

– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 16.9% vis-vis 16.86% for Mar 2021
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 4.88% vis-vis 4.86% for Mar 2021

Conclusion

– has delivered good profit growth of 65.10% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 18.89% – The company has delivered a poor sales growth of 8.66% over past five years.
– might be capitalizing the interest cost
-Promoter holding has decreased over last 3 years: -6.53%

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