Positive on JK Lakshmi Cement: Harendra Kumar, Elara Capital

Harendra Kumar, Head of Institution Broking and Global Research, Elara Capital, in a chat with ET Now talks about the cement space.

Is cement is a space that you would possibly recommend that one stay away from?

In the cement space, we are seeing some amount of pricing pressure. In the southern reagion, prices have cracked in. The worry because it is a disintegrated market, so we would stay away from southern based players.

Focus would be largely on central and north based players, somebody like Shree Cement. But at this space, we are looking at the midcap cement companies because they are trading lower than distress valuation which is at $150 per EV per tonne. If you look at the kind of valuations that Murli Agro is demanding, there is a significant upside over there. We like Orient Paper and JK Lakshmi Cement in that space.

Going ahead, these stocks will get re-rated and probably come to a fair case valuation of around $60 per EV per tonne.