Kajaria Ceramics Ltd. share price target

Management guides 15% volume growth in FY20E Kajaria's sales volumes grew 11.2% YoY to 22.51 MSM in Q4FY19. The volume growth was on account of market share gain despite a tough business environment. The management has guided for 15% YoY volume growth in FY20E with continuous gain in market share following strict implementation of e-way bill and ban on coal gasifier. Kajaria is looking to increase its market share from 10% to 14% over the next four years. Currently, Kajaria has capacity of 68 MSM and is setting up 5 MSM GVT plant...

KJC has increased its dealer network from 1,400 to 1,500 and upped the exclusive dealer count from 200 to 240 in FY19. Exclusive dealers contribute ~30% of the company's turnover. Source: Company, BOBCAPS Research...

Our discussions with a few players organized and unorganized indicate that Morbibased tiles manufacturers are planning to implement price hikes in Ceramic (10%+) and Vitrified tiles (5-7%) as they face cost headwinds after the ban on coal gasifier usage. The National Green Tribunal's (NGT) recent order banning the use of coal gasifiers in Morbi (Gujarat) has aggravated the challenges of units based there as they were already facing the issue of increasing receivables days (130-150 days). Our interaction suggests...

ICICI Securities Ltd | Retail Equity Research The topline grew 14.7% YoY to | 758.6 crore, mainly on account of strong volume growth and in line with our estimate of | 755.1 crore EBITDA margins expanded 91 bps QoQ to 15.9% (slightly better than our expectation of 15.5%) on account of lower power & fuel costs Reported PAT grew 24.1% YoY to | 65.9 crore (our estimate: | 61.4 crore) mainly on account of EBITDA margin expansion & lower tax rate The working capital cycle increased from 59 days in Q2FY19 to 62 days...

Kajaria Ceramics' Q3 results came in marginally better than our estimates, with EBITDA at Rs1.21bn vs. our estimate of Rs1.16bn and OPM at 15.9% vs. Emkay estimate of 15.6%. Sales volume was up 15.9% yoy compared with our expectation for 13%. Revenue grew 14.7% yoy, driven by the Sanitaryware segment (+40.6% yoy), with Tiles segment revenue growing 12.3% yoy. Blended realization was down 2.2% yoy on a...

Kajaria Ceramics (KJC) is set to benefit from the recent drop in gas prices. We believe that the phase of an earnings downgrade seen over the last few quarters is now over for the company. Bloomberg Consensus earnings were downgraded by 33%/31% for FY19/FY20 after Q3FY18 due to a 15.5% surge in gas prices and pricing pressure on tiles. Our channel checks suggest about 9% cut in gas prices by Gujarat Gas in January 2019 along with expectations of a further price reduction by 7-8% in February 2019, if crude remains at current levels. Prices of tiles have stabilized and companies have initiated a price increase of 1-2% in different segments over the last three-four months....

Although we reduce our EBITDA margin estimate for FY19E to factor in increased pricing pressure and higher gas prices, we expect it to revive in FY20E aided by operating leverage, improvement in realisation & mix and stability in gas prices. We factor volume CAGR of 10% over FY18-20E driven by its capacity expansion drive coupled with improved demand and offerings. However, we downgrade the rating on the stock to HOLD' given increased pricing...

Kajaria Ceramics Ltd (KCL) reported muted numbers for Q2FY19, below our estimates. Its consolidated net revenue grew by 8.1% YoY. While volume growth stood healthy at 11% YoY, poor realizations in the Tiles segment impacted the overall revenue growth.

The topline grew 8.1% YoY to | 725.3 crore mainly led by volume growth (grew 10.5% YoY to 19.54 MSM) and was almost in-line with our estimates of | 712.9 crore. EBITDA margin contracted by 316 bps YoY to 15.0% (our expectation: 14.5%) on account of higher power & fuel costs and other expenditure Reported PAT declined by 11.1% YoY at | 50.2 crore. Adjusting for exceptional loss of | 3.4 crore on sale of stake in Soriso Ceramics, the...