JK Lakshmi Cem. (JKLAKSHMI)

FairStock Score: 33/100 — RISKY

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 45.12% aligns management interests with minority shareholders
• Book value of ₹259.82 provides some asset backing
• Debt-to-equity of 0.72 is moderate for a capital-intensive cement business
• P/E of 18.54 is not extreme for Indian cement, and 0.91% dividend offers small income
• Sales growth of 6.12% shows some demand stability despite industry cyclicality

Concerns

• Profit growth is negative at -4.77% and latest quarterly margin is thin
• Piotroski F-Score of 4/9 points to deteriorating fundamentals
• ROCE of 10.48% is weak relative to the capital employed in the business
• PEG of 3.03 suggests the stock is expensive for its current growth rate

AI Analysis

At first glance, JK Lakshmi Cem. seems interesting because the price has fallen from ₹989 to ₹650. But as Buffett and Graham would say, price is not value. The business earns an ROE of 13.48% and an ROCE of 10.48% — okay numbers, but hardly exceptional for a capital-intensive commodity like cement. Profit growth is negative at -4.77%, and sales growth is modest at 6.12%. The latest quarter shows net profit of ₹57 Cr on sales of ₹1,588 Cr, a thin margin. The Piotroski F-Score of 4/9 is a red flag; it suggests the company's financial health is deteriorating, not improving. Debt-to-equity of 0.72 is manageable, but cement requires constant capital spending to maintain plants, and the return on capital is not high enough to give me great comfort. At ₹650, the stock trades at 18.54 times earnings and 2.50 times book value. That is not a bargain for a cyclical business with falling profits and a PEG ratio of 3.03. The dividend yield of 0.91% is small compensation. I do take some comfort from the 45.12% promoter holding, which aligns interests, but alignment alone does not create a moat. Cement is largely a local, price-driven product. Without pricing power, the company will remain at the mercy of the cycle. I would wait for a lower price, stronger financials, and evidence that the company can generate better returns through a full cycle. Right now, this is not a margin-of-safety purchase; it is a cyclical trap unless the numbers improve.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer