Buy JK Lakshmi Cement Ltd. target Rs 432 : Axis Securities

Axis Securities has Buy on JK Lakshmi Cement Ltd. with a target price of Rs 432 .The current market price of JK Lakshmi Cement Ltd. is Rs 408.05. Time period given by analyst is 3-9 months when JK Lakshmi Cement Ltd. price can reach defined target.
Investment Rationale

Q2FY18 highlights: JK Lakshmi Cement showed good operational performance in Q2FY18 despite it being a seasonally weak quarter both in terms of volumes and cement prices. Average realization was up Rs 120/ton QoQ at Rs 4,070/ton. The company reported Q2FY18 EBITDA at Rs 950 mn (up 2% YoY)
Fuel mix: Current pet coke mix is 55% in East operations. Average pet coke cost booked during the quarter was Rs 6,500/ton compared to current procurement cost of Rs 7,500/ton. Management expects fuel cost rise to be offset in near future due to (1) increase in linkage coal supply and (2) commissioning of WHR and CPP by Q4FY18
FY18 capex: Management guided for capex of Rs 1.3 bn for Waste Heat Recovery plant (to be commissioned in CY17) and thermal power plant (to be commissioned in Q1CY18). Capex already spent was Rs 1 bn
Debt position: Standalone gross debt as on Sept’17 end was Rs 22 bn and cash balance was Rs 5 bn. The company plans to repay Rs 2 bn every year through FY19