Monday, 15 October 2012

Stock Update: JK Lakshmi Cement

In my previous post on the company, here is what I had said, 
The management has announced an equity share buyback up to an amount of Rs 97.5cr at a maximum price of  Rs 70 per share. Assuming  that entire buyback happens at  the price range of Rs 65-70,  the paid-up equity will  reduce by somewhere around 7-8%. Currently, the stock is available at a P/B of 0.7 and EV/ton of $54 both of which are at a discount to its peers.
The stock has moved up sharply in the last few weeks,from a low of 40 in the end of Dec'11 to its current price of nearly 62. The stock is still available at a reasonably cheap price and can move up significantly from here in the next 1 year. I would not be surprised if I see a triple digit price in the next 6 months.
Well, the stock has indeed touched triple digits, CMP is Rs 118 today. The quarterly results are to be announced on Oct 20th. Results are expected to be good for this quarter and also they is an expectation of demand pickup in the coming quarters. 

Cautious investors can book partial profits. Adventurous investors can continue to hold. Bumps along the way but it should be rewarding to hold on for another year or so, in my opinion.

Disclosure: I am invested in JK Lakshmi Cement. Please take my views as biased. Consult with your financial adviser before investing.

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