We revisit our investments case for Lucky Cement Limited (LUCK) post release of detailed accounts for 1QFY15. We have upward revised our earnings estimates for FY15 and beyond by 6% to 8% respectively after incorporating lower coal prices and recent decrease in discount rate. The stock gained around 67% in current year 2014 against market return of 26% but we still believe the stock provide upside potential of 10.4% to our June’15 target price of Rs 552/share.
Earning rise by 5%
Lucky cement has posted profit after taxation of Rs 2.66 billion (EPS: Rs 8.25) as compared to Rs 2.54 billion (EPS: Rs 7.87) during 1QFY14, depicting rise of 5%. The growth is primarily on account of 9.2% rise in volumetric sales, 3.2% hike in retention prices and higher other income owing to sales of electricity to HESCO and rise in interest income from bank deposits.