Kajaria Ceramics Ltd. share price target

Kajaria Ceramic Ltd.'s (KCL) Q2FY18 result was below our expectation. Net Sales declined by 4.9% YoY on account of muted volume growth. EBITDA and PAT were down by 3.2% YoY and 8.3% YoY respectively.

Kajaria Ceramics (Kajaria) is the largest manufacturer of ceramic/vitrified tiles in India. It has an annual aggregate capacity of 63.90 mn. sq. meters (MSM). Constant product innovation and expansion of product range has made Kajaria a dominant player in the ceramic & vitrified tiles industry with a market share of ~10%. To further scale up its business, Kajaria has moved up the value-chain to emerge as a...

Kajaria Ceramics has reported a muted set of numbers in 2QFY18 mainly due to transitionary impact of GST roll-out. While its consolidated net sales grew by 6.7% YoY to Rs6.7bn vs. our estimate of Rs6.9bn, net profit came in largely flat at Rs630mn vs. our estimate of Rs656mn, and EBITDA margins contracted by 190bps YoY to 18.2%. Despite near-term headwinds, we believe that Kajaria Ceramics is comfortably placed to benefit from increasing share of organised tiles industry in GST regime. Being the market leader, the Company has made concerted efforts to create and enhance its brand strength, improve productmix and build a strong product pipeline. Expecting the Company to report 12.2% revenue and 18.8% earnings CAGR through FY17-19E, we maintain our BUY recommendation on the...

Revenue for Q2FY18 was ahead of our estimates led by 5% YoY volume improvement and 2% YoY pricing improvement. Operating margins were under pressure due to higher power and other costs. Net profit performance on YoY basis was impacted by fall in margins. Going ahead, we expect company to improve its market share by capturing the market share of unorganized players as well as with improvement in product mix. Its enhanced presence in Tier 2/3/4 cities, strong dealer network, value added products as well as improvement in capacity utilization of its JV plants are expected to aid revenue growth going forward....

ICICI Securities Ltd | Retail Equity Research Kajaria Ceramics' (Kajaria) topline grew 6.7% YoY to | 671.2 crore, marginally better than our estimate of | 652.8 crore led by volume...

Incorporated in 1988, Kajaria Ceramics Ltd. (KCL) is the largest player in domestic tiles industry. The company has a market share of 10% of overall industry and 20% of organised industry. KCL's advertising and marketing strategy over the years has paved the way for the company's strong brand recall.

Volume was ahead of estimate despite GST roll out. Own manufacturing (-1%) & trading business (116%) while JVs volume were down by down 16%. Lower share of own manufacturing impacted overall realisation. Recovery from GST is expected to be gradual, company expects things to normalize in Q3FY18 Gross margin at 64.7% (-320bps yoy) impacted by mix,. EBITDA margins declined 480bps yoy to 16.6% impacted by higher fuel cost and advertising spends We lower our FY18E estimates by 5% and keep FY19E estimate unchanged. Kajaria being a leader in Tiles is well placed to take advantage of recovery in the demand. However,...

We attended Kajaria's analyst meet where the management guided for double-digit volume growth for FY18 (management refrained from narrowing it further). However, management remains positive in the long-term driven by implementation of GST & government's focus on housing and sanitation.

ICICI Securities Ltd | Retail Equity Research Kajaria Ceramics' (Kajaria) topline grew 9.9% YoY to | 719.7 crore marginally better than our estimate of | 689.1 crore mainly on account of volume growth of 10.9% to 19.3 million square metre (MSM) vs. our expectation of volume of 18.2 MSM The EBITDA margin contracted 203 bps YoY to 18.0%. It was below our expectation of 19.1% on account of higher advertisement & promotion spends and hike in gas prices...

Muted Q3FY17; Government Schemes such as Housing-for-All Hold Key for Future: Kajaria Ceramics sales grew at 1.7% in Q3FY17 on YoY basis to reach Rs.6067 Mncompared to Rs.5967 Mn in Q3FY16. With demonetization, the building materialsindustry had badly impacted for a brief period in November month.The management said the November sales fell by 5%, but the demand picked up in December with 6.5% growth and hence the quarter ended with 1.7% positive gains in the total revenues of the firm. The management expects the coming Q4FY17E could witness 5-6% volume growth.