Saturday, March 03, 2007

Fresh Investment: J K Lakshmi Cement

Bought JK Lakshmi Cement today at an average price of around Rs.120 per share. Looks really cheap at current levels. Numbers in brief are given below:
  • CMP = Rs.118 per share
  • P/E = 4.6 times
  • Qrtrly PAT = 55 crore
  • Trailing 12 mnths PAT = Rs.137 crore
  • Annualizing recent quarters performance APAT = Rs.200 crore plus
  • CMcap = Rs.630 crore

Discounting FY08 expected profit @
  • 5 times = Rs.187, a gain of 59% over CMP
  • 7.5 times = Rs.281, a gain of 138% over CMP
  • 10 times = Rs.375, a gain of 217% over CMP
However, it is important to note that low p/e's mark the end of a bull run in cyclical stocks. For eg. steel, aluminum & sugar stocks. However, in case of cement, I think the end of bull-run is still a year away. So for now investment in cement stocks makes sense to me. Looking at a target price of around Rs.250 in about 6-8 months time.

Happy Investing!

1 comment:

Anonymous said...

Hi Ravi ,
Iam Gopi Reddy working as a Business Analyst in an IT company .Stock picing is onbe of my hobby and had a career stint in capital markets.Iam into Ankur when it was from Rs 70 levels and keen follower of the stock .But one of my friend referred your blogger and your analysis on Ankur is quite amazing and is adding new dimensions to my thoughts .Really i appreciate it .If you are interested will exchange
info on some of my recent stock picks .Please mail me your email id mine is