EPL Ltd Research ReportQ3FY21

During Q3FY21, JK Lakshmi managed to sustain its margins on a YoY basis despite an increase in costs leading to a better-than-expected performance for Q3FY21. Revenue in Q3 grew 18.7% YoY to | 1192.8 crore (vs I-direct estimate: | 1121.3 crore). Plant utilisation was at 92% led by improved sales volumes that were up 15.7% YoY to 2.7 MT (vs. I-direct estimate: 2.6 MT). Realisations were also up 2.6% YoY to | 4,426/tonne (vs. I-direct estimate: | 4,356/t). This led to a margin expansion of 97 bps YoY to 16.1% (in line with our estimate) despite cost increase of 1.4% YoY on per tonne basis. Further, higher other income, lower interest cost led to PAT growth of 108% YoY. Progress on the waste heat recovery unit III Project at Sirohi is as per schedule and will be commissioned by July 2021. The companys subsidiary Udaipur Cement Works is expanding its cement capacity by 2.5 MT, which is likely to be commissioned in December 2023E. Post this expansion, consolidated capacity of JKLC and UCWL will get enhanced to 16.4 MT.