Kajaria Ceramics Ltd. share price target

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.

Kajaria Ceramics results were in line with our estimates led by healthy volume growth and sequential improvement in average realization. Margins decline on YoY basis was expected due to sharp hike in gas prices. Going ahead, we expect volumes to start witnessing traction on improved demand. High gas prices may continue to impact margins but benefits to margins will come from improvement in JV performance. Company had offloaded its stake in its subsidiary Soriso Ceramics for Rs 110 mn and has booked an exceptional loss...

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...

Sequential improvement in realization, Positive surprise on all front Despite multiple headwinds during the quarter sequential improvement in realisation, tile volume growth of 10.5% YoY coupled with gross margin expansion of 649bps YoY helped Kajaria Ceramics post better than...