JK Cement’s margin decline further in Q4FY22. Exceptional loss reduces net profit further

News: JK Cement EBITDA margins declined 224bps QoQ to 16.9% during Q4FY22 led by weak realisations. Revenues increased 10.5% YoY, 16.9% QoQ to Rs.2269 crore. PAT were lower by 48% QoQ (up 36% YoY) to Rs.86.3 crore due to exceptional loss of Rs.130 crore pertaining to UAE subsidiary.

Views: While production cost increased further by 1.5% QoQ, the company was unable to pass on the cost pressure as underlying demand remained weak. Given the current elevated fuel price levels, we expect further deterioration in the margins in the coming quarters.

Impact: Negative