Kajaria Ceramics Q3 Results Review - Systematix Maintains 'Hold' On The Stock — Here's Why

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Systematix Research Report

Kajaria Ceramics Ltd. reported another quarter of weak operating performance as in Q3, tile volume grew by 7% YoY (inline, versus nil for industry) whereas revenue could grow only by 1% YoY (5% miss) on lower realization. Ebitda/PAT declined 17%/25% YoY (~15% miss).

Gross margin fell 43bps YoY to 58.8%; Ebitda margin contracted 274bps YoY to 12.8%. Margins in Q3 and 9M got impacted due to greater mix of project sales (40% versus earlier 30%) to push volume amid weak demand in retail channel.

Loss in bathware division stayed owing to commissioning of new Sanitaryware unit. Net cash stood lower at ~Rs 3 billion while working capital cycle came stable at 59 days.

After clocking 8% YoY growth in tile volume in 9M, Kajaria Ceramics aims 8-9% growth in FY25E. Nepal 5.1 million GVT plant achieved 70% capacity utilisation and is expected to increase to 85% by April 2025; its consolidation with Kajaria Ceramics will start from 1st Apr-25. Bathware revenue is aimed to grow at 10% YoY in FY25. Power and fuel costs remain stable.

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