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Public companies who hold 44% of JK Lakshmi Cement Limited (NSE:JKLAKSHMI) gained 16%, institutions profited as well

If you want to know who really controls JK Lakshmi Cement Limited (NSE:JKLAKSHMI), then you’ll have to look at the makeup of its share registry. With 44% stake, public companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While public companies were the group that reaped the most benefits after last week’s 16% price gain, institutions also received a 33% cut.

Let’s take a closer look to see what the different types of shareholders can tell us about JK Lakshmi Cement.

However if you’d rather see where the opportunities and risks are within JKLAKSHMI’s industry, you can check out our analysis on the IN Basic Materials industry.

NSEI:JKLAKSHMI Ownership Breakdown September 9th 2022

What Does The Institutional Ownership Tell Us About JK Lakshmi Cement?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that JK Lakshmi Cement does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see JK Lakshmi Cement’s historic earnings and revenue below, but keep in mind there’s always more to the story.

NSEI:JKLAKSHMI Earnings and Revenue Growth September 9th 2022

We note that hedge funds don’t have a meaningful investment in JK Lakshmi Cement. Looking at our data, we can see that the largest shareholder is Bengal & Assam Company Limited with 44% of shares outstanding. Axis Asset Management Company Limited is the second largest shareholder owning 5.3% of common stock, and L&T Investment Management Limited holds about 3.8% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of JK Lakshmi Cement

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in JK Lakshmi Cement Limited. As individuals, the insiders collectively own ₹3.0b worth of the ₹66b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over JK Lakshmi Cement. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 3.1%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 44% of JK Lakshmi Cement stock. It’s hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we’ve identified 1 warning sign for JK Lakshmi Cement that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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