News: JK Cement’s sales volume declined 9.4% sequentially to 3.56MT. This led to revenue de-growth of 4.5% QoQ to Rs2166.4 crore. However, lower power& fuel and freight cost led to 160bps QoQ margin expansion to 18.5%. PAT improved sharply by 110% on QoQ basis to Rs181.1 crore due to one-offs and better margins.
View: While reduction in the sales volume during the peak construction season came in as negative surprise, the better cost management, especially power & furl and freight cost which led to sequential margin expansion were key positive. With likely cost peak in the Q2, we expect margin trajectory now to further improve post end of monsoon.
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