JK Cement surges 17% in two days on strong Q4 earnings; hits 52-week high

JK Cement shares hit a 52-week high of Rs 994, up 10 per cent on Tuesday, surging 17 per cent in the past two trading days, after reporting a 55 per cent year-on-year (YoY) growth in its net profit at Rs 150 crore in March quarter (Q4FY19). The company had repprted a profit of Rs 96 crore in year-ago quarter.

Net sales grew 12 per cent at Rs 1,470 crore against Rs 1,307 crore in the corresponding quarter of previous fiscal. Ebitda (earnings before interest, tax, depreciation and amortization) margin improved 490 bps at 18.7 per cent in Q4FY19, on back of healthy realisation.

Meanwhile, the company said its board has decided to raise up to Rs 500 crore by issue of secured/redeemable non-convertible debentures in one of more series/tranches on private placement basis.

The fund-raising at an interest rate that will be determined by the prevailing money market conditions at the time of borrowing subject to the approval of the shareholders, it added.

The cement sector may see an improvement in prices in June when construction activity by the government, as well as, individuals start picking up and a shortage of labour eases.

Analysts at Elara Capital remain positive on cement sector, as they believe expected price hikes of Rs 10-25 per bag in the upcoming month coupled with gradual demand improvement would lead to meaningful improvement in the financial performance of cement companies.

However, analysts at Systematix Shares and Stocks (India) estimate a slower growth rate for cement sector in June quarter led by negligible fresh orders due to all-India elections besides assembly elections in Andhra Pradesh and Odisha, drought-like conditions in select areas of south, west and central India and a high base of 16 per cent YoY in Q1FY19.

At 01:36 pm, JK Cement was up 6 per cent at Rs 957 on the BSE, as compared to 0.67 per cent decline in the S&P BSE Sensex. A combined 1,75,343 shares changed hands on the counter on the BSE and NSE till the time of writing this report.