Kajaria Ceramics Q2 Results Review- Lower Volume Guidance, Margin Improved: Prabhudas Lilladher

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Prabhudas Lilladher Report.Kajaria Ceramics Ltd.’s downward revised its volume growth guidance between 9-10% (earlier 13-15%) and maintained higher Ebitda margin (around 16.0%) with lower power and fuel costs for FY24, while expecting sequential improvement in volume growth in coming quarters.Management indicated gradual pick-up in volumes post September-23 and expected improvement in demand environment emanating from rub-off of strong growth in real estate sector to drive better volume growth in H2 FY24. The company reported improvement in Ebitda margin (+400 basis points YoY) with reduction in fuel expenses through decrease in gas prices and use of alternate fuel. Kajaria Ceramics reiterated that off gas price reduction benefits will be used for -promotions/discounts to drive volume, passing it on to joint venture partners, and margin improvement. We are cautiously optimistic on the company for long term given- Its largest player positioning in domestic tiles market, focus on brand building (advertisement spends at 3% sales), expanding distribution network (1,840 active dealers in FY23 and expected to touch 2000 in FY24), reduction in fuel expenses with gas price correction and alternate fuel uses, and exponential growth in bathware/plywood/adhesive businesses. We expect revenue/Ebitda/profit after tax compound annual growth rate of 12.0%/20.0%/24.3% over FY23-26E and downward revise our FY24/FY25E/FY26E earnings estimate by 5.8%/5.3%/5.3%. Maintain ‘Accumulate’ rating, as we value the stock at 35 times FY25 earning per share to arrive at revised target price of Rs 1,368 (earlier Rs 1,445)..Click on the attachment to read the full report:.ICICI Bank, Kotak Mahindra Bank, Metro Brands, Kajaria Ceramics And More Q2 Results Reviews: HDFC Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Kajaria Ceramics Q2 Results Review- Lower Volume Guidance, Margin Improved: Prabhudas Lilladher

Kajaria Ceramics’ downward revised its volume growth guidance between 9-10% (earlier 13-15%).

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