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In the June quarter, JK Cement Ltd noticed its gray cement volumes decline by 19% year-on-year to 1.59 million tonnes. This compares with the business’s quantity fall of practically 30% y-o-y. Analysts say this highlights market share positive aspects for the firm, which is led by its 50% capability growth in North India.
In a post-earnings convention name, the firm’s administration stated whereas the business noticed quantity decline of 10% over July–August, the firm’s volumes grew by practically 20% y-o-y.
Akin to friends, the firm managed to get a tight grip on different bills. Its working price per tonne was down 4.4% y-o-y in the June quarter, higher than analysts’ expectations. The administration stated, Q1FY21 witnessed sharp decline in mounted prices on account of a discount in consultancy prices and admin, journey, and branding bills. Variable prices, although, are anticipated to go up because of a rise in petroleum coke (pet coke) and diesel costs. The value of pet coke has risen to $95/tonne now from $60/tonne in May this 12 months, the administration added.
Analysts are positive on the firm’s progress prospects for a number of causes. But after the current run-up, they don’t see the stock value transferring very sharply from right here on. Shares of the firm touched this 12 months’s excessive of ₹1,613 on 7 August on the NSE and are presently buying and selling at ₹1,487.
“Though we like JKCE because of its publicity to the white cement phase, cost-saving initiatives and capability growth plans in the gray cement, the improve in the stock value just lately leaves little room for a additional upside,” analysts at Emkay Global Financial Services stated in a report on 2 September.
Concurring, analysts at Dolat Capital Markets Pvt. Ltd stated that the firm’s strategic gray cement growth into sturdy pricing markets of north/central will profit it. “However, 19% run up in stock value put up our Q4FY20 end result replace dated 18 June 20, leaves limited upside,” stated the Dolat report on 2 September.
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