Overweight on JK Lakshmi Cement with a target at Rs 406: Morgan Stanley

Morgan Stanley remains overweight on JK Laxmi Cement post March quarter results with a 12-month target price of Rs 406. The key positive surprises were cost per ton which came 6 per cent below estimates and volume growth.

The key negative surprise was lower-than-expected realizations. The company benefitted from regional diversification, ramp-up of capacity utilization at East India Plant.

The global investment bank expects volume momentum to remain strong on the back of sustained utilization levels. The cement prices have firmed up in North, West and should support earnings in QE Jun-16.