JK Lakshmi Cement’s net profit growth of 386%

JK Lakshmi Cement’s net profit growth of 386%
Published: 19 January 2007

JK Lakshmi Cement Ltd., one of the top manufacturers of cement in North India has posted an exceptional growth for the quarter ended December 31, 2006. It recorded net sales of Rs 228.64 crore, a phenomenal increase of 50% as compared to Rs 152.86 crore in the corresponding quarter of the last fiscal. Net profit for the quarter was Rs 55.06 crore, an increase of 386% over Rs 11.33 crore in the corresponding fiscal of the previous year.

The operating margins increased to 32% in Q3FY07 owing to higher capacity utilization, better realisation and continuous stress on cost compression. Earnings per share for the quarte.r stood at Rs 9.65 as against Rs 2.05 for the corresponding quarter in previous fiscal. The company’s effective cement capacity utilisation was 112%.

J K Lakshmi’s cement production and despatches for this quarter stood at 8. 28 lac mt and 8.44 lac mt, higher by 6% and 5% respectively as compared to corresponding quarter of the previous fiscal.

Higher realizations from sale of both OPC and blended cement have added to the company’s profitability. The company’s concerted efforts on prime positioning of JK Lakshmi brand and redistribution of marketing areas to contain the logistics cost have also yielded significant results.

The company is setting up a new kiln at the existing site, which would raise its capacity to 5 million tpa by September 2008, which would make it one of the largest capacity at a single location in the country. The project would cost Rs 302 crore. The expanded capacity would be achieved at a capital cost of Rs 2237 per tonne.

JK Lakshmi Cement’s efficiency norms are in the league with the best in the industry.

Commenting on the results, Mr Bharat Hari Singhania, Vice Chairman & MD, JK Lakshmi Cement said, “The excellent results have been achieved as a result of all-round improvements in the working of the company and higher realizations. The 36 MW captive power plant, expected to be operational by March 2007 would further add to cost savings. Higher capacities in FY09 would lead to full scale utilization of facilities and result in higher operating margins.”

“With India’s GDP set to record double digit growth, JK Lakshmi Cement is set to achieve robust growth, thereby improving the returns for its shareholders”, he further added.