Credit Analysis & Research (CARE) assigned 'AA (FD)' ratings to JK Lakshmi Cement's facilities of Rs 150 million.

The rating derives strength from the experienced promoters and strong brand image of JK Lakshmi Cement (JKLC), particularly in the Northern India market, relatively healthy capacity utilization and comfortable solvency and liquidity profile.

The rating is, however, constrained by the company's medium size compared with the other players in the industry, project implementation risks associated with relatively large ongoing expansions, decline in profitability margins in 9MFY14 (refers to the period April 01 to December 31) due to sluggish demand in the northern India markets impacting sales realizations.

The ability of JKLC to improve profitability margins amidst the challenging operating environment and successfully execute the ongoing projects shall be the key rating sensitivities. 

Shares of the company gained Rs 2.15, or 1.23%, to settle at Rs 176.95. The total volume of shares traded was 59,392 at the BSE (Wednesday).