Institutions profited after JK Lakshmi Cement Limited's (NSE:JKLAKSHMI) market cap rose ₹4.5b last week but public companies profited the most

Key Insights

• The considerable ownership by public companies in JK Lakshmi Cement indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 3 shareholders
• Institutions own 35% of JK Lakshmi Cement

Every investor in JK Lakshmi Cement Limited (NSE:JKLAKSHMI) should be aware of the most powerful shareholder groups. With 44% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While public companies were the group that reaped the most benefits after last week’s 4.8% price gain, institutions also received a 35% cut.

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

See our latest analysis for JK Lakshmi Cement

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.

As you can see, institutional investors have a fair amount of stake in JK Lakshmi Cement. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of JK Lakshmi Cement, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in JK Lakshmi Cement. Bengal & Assam Company Limited is currently the company's largest shareholder with 44% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.7% and 3.7% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of JK Lakshmi Cement

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can report that insiders do own shares in JK Lakshmi Cement Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around ₹2.8b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over JK Lakshmi Cement. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 44% of JK Lakshmi Cement. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with JK Lakshmi Cement .

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.

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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.