JK Lakshmi Cement is targeting double digit sales growth this fiscal with the cement industry likely to benefit from increased demand from infrastructure projects and housing sector.
The company, which is currently investing Rs 150 crore to set up a new grinding unit at Odisha, also expects allied products like readymade concrete, plaster of paris and mortars to pick up.
“We are looking at reversal of demand consumption...I would not be satisfied with the single digit growth of the company. I would definitely target a double digit growth for this fiscal,” JK Lakshmi Cement whole-time director Shailendra Chouksey.
In FY 2016-17, JK Laxmi Cement has a consolidated income of Rs 3,413.69 crore with a net profit of Rs 87.30 crore. In the last fiscal, the company sold around 7 MT cement.
In terms of production capacity, he said with the commissioning of a new cement plant of Udaipur Cement Ltd, in which the company holds around 75 per cent stake, total capacity has gone up to 13 million tonnes (MT) per annum.
JK Lakshmi Cement’s two other plants are at Durg in Chhattisgarh and Sirohi in Rajasthan.
The company’s production has grown at a CAGR of 16 per cent from FY12 to FY16, Chouksey said.
“Now, our capacity is 13 MT, we need to scale up. It’s very early to talk about expectations but I am looking for good growth this year,” he said.
Although the cement industry had recorded a decline of 1 per cent last fiscal and only single digit growth since FY12, there is optimism that demand will bounce back this fiscal.
The government’s push for infrastructure projects and spending on highways, roads and affordable housing for all are likely to help the cement industry, he said.
“There has been a pent-up demand of last few years,” he said, adding “we are also certainly looking forward to good time and GST would help in that”.
Besides cement, JK Lakshmi Cement is also pushing for its value added business -- readymade concrete, autoclaved aerated concrete (AAC) blocks used in place of conventional bricks, plaster of paris and mortars as highway and housing sector are expected to pick up.
“These are small businesses and many not add much to the bottomline of the company but we are into these lines with view to help the customer and remain a preferred supplier of construction material,” Chouksey said.
When asked if the company would invest further to add more capacity, he said: “No. Now, most of our projects are completed. Barring one grinding unit which has to come in Odisha, rest everything is complete.”
The 1 MT grinding unit at Orissa would be completed in the next financial year.