Kajaria Ceramics up 1%; Q1 net up 16.5%

Kajaria Ceramics shares were trading 1 percent higher at Rs Rs 1,390 at 9:33 am on July 27. The company has posted 16.5 percent year-on-year jump in its June quarter (Q1FY24) net profit at Rs 107.5 crore and revenue was up by 5.6 percent at Rs 1,064.2 crore.

Kajaria Ceramics‘s EBITDA stands at Rs. 178.47 crore in June 2023, up 10.38% from Rs 161.68 crore in June 2022.

Sharekhan retained Buy on the stock with upwardly revised target price to Rs 1,600.

The company is expected to benefit from healthy domestic demand led by strong demand tailwinds from the realty sector and rising exports over the next 2-3 years. Further, decline in gas prices has provided OPM expansion with a major part of the savings being retained by the company.

Sharekhan expects the company to report revenues/operating profit/net profit CAGR of 14%/27%/32% over FY2023-FY2025E.

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Brokerage house Motilal Oswal reiterated its buy rating with a target price of Rs 1,580.

Tiles exports have seen green shoots with ~23% YoY growth in 1QFY24. Higher exports should ease pressure in the domestic markets, and with the company being the leading domestic player should benefit and expect 33% earnings CAGR over FY23-25 and project improvement in return ratios, said said Motilal Oswal.

Prabhudas Lilladher upward revised its FY24/FY25E earnings estimate by 4.0%/7.1% and maintained ‘Hold’ rating with a revised target price of Rs 1,370 (earlier Rs 1,264).

The company reported improvement in EBITDA margin with a reduction in fuel expenses through decrease in gas prices and use of alternate fuel.

Prabhudas Lilladher was cautiously optimistic on the company for long term given its largest player positioning in domestic tiles market, focus on brand building, expanding distribution network, reduction in fuel expenses with gas price correction & alternate fuel uses, and exponential growth in Bathware/Plywood/Adhesive businesses.

At 09:33 hrs Kajaria Ceramics was quoting at Rs 1,390, up Rs 3.85, or 0.28 percent on the BSE.

The share touched a 52-week high of Rs 1,489.55 and a 52-week low of Rs 1,006.40 on 20 July, 2023 and 29 March, 2023, respectively.

Currently, the stock is trading 6.68 percent below its 52-week high and 38.12 percent above its 52-week low.