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IDBI Capital Report
Kajaria Ceramic Ltd.'s Q1 FY25 result was broadly in-line with our estimates on net sales/Ebitda, while profit after tax was a tad below estimate. The company reported healthy volume growth in a season lean quarter.
Further, the management has guided improvement in volume off-take from Q2 FY25 onwards. Net sales increased by 4.6% YoY to Rs 11.1 billion, while Ebitda came in at Rs 1.6 billion, declined by 1.3% YoY.
Kajaria Ceramics reported net profit of Rs 0.9 billion, lower by 15.4% over Q1 FY24. Given green shoots in demand and positive management commentary, we have marginally increased our earnings estimates over FY25E/FY26E.
Post recent rally in the stock price, potential upside is capped from current level. We downgrade the stock to Hold with a revised target price of Rs 1,530 (earlier Rs 1,473), assigning 40 times PER on FY26E.
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