KAJARIACER share price target reports by brokerages below. See what is analyst's view on KAJARIACER share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Sales volumes were muted with 0.5% YoY growth to 20.4 MSM in Q3FY20. Topline de-grew 2.3% YoY to Rs 741.3 crore. EBITDA margins contracted 90 bps YoY (30 bps QoQ expansion) to 15.0%. PAT declined 6% YoY to Rs 61.5 crore, mainly on account of a muted operating performance.
Domestic tile industry is going through a challenging phase of weak demand and fall in realization. In FY21, we expect company’s revenue to grow on account of expected improvement in demand, market share gain, contribution from new GVT plant and growth in sanitary/bathware and ply segment. We marginally revise our FY20/FY21 estimates. We retain ADD rating on the stock with revised price target of Rs578 (earlier Rs594). We continue to value the stock at a PE multiple to 29x on FY21E earnings.
Amid challenging business environment, the management has lowered its volume growth guidance to 9-10% in H2FY20E. Hence, Kajaria’s sales volumes are expected to grow by 10.2% CAGR to 97.5 MSM in FY19-21E. However, its PAT is expected to grow 22.9% CAGR to Rs 342.3 crore in FY19- 21E on account of corporate tax cut benefits. Hence, we maintain HOLD rating on the stock with a target price of Rs 580/share.
Management has scaled down its FY20 tile segment volume growth guidance further to 9-10% (earlier revised to 12-13%). In 2HFY20, company expects demand to rebound and volumes to grow by 10%. Real estate continues to remain under stress and we do not expect any meaningful improvement in the near to medium term. In our estimate, we factor in 2% revenue growth for FY20. EBITDA margin are likely to remain close to 15% as cost has been stable and the company is working on controlling cost to offset negative impact from low growth. In view of weak demand, we cut our FY20 / FY21 estimates. We also adjust FY20 estimates for tax adjustments done in 2QFY20. We retain ADD rating on the stock with revised price target of 594 (Rs627). We continue to value the stock at a PE multiple to 29x on FY21E earnings.
In 1QFY20, Kajaria reported 7% YoY revenue growth and 12% YoY increase in earnings. For FY20, the company has guided for 12-13% volume growth. Company is expecting growth to largely be contributed by demand shift from unorganized to organized segment as real estate segment continues to remain under stress. We expect demand to improve gradually over the medium term. We marginally revise our estimates. We retain ADD rating on the stock with revised price target of Rs563 valuing the stock at 29x on FY21E earnings.
Outlook & Valuation: Consistent outperformance vis-à-vis the industry in terms of volume growth and superior margin profile bode well for KJC. However, considering current valuations at 30x of FY20 and 24x of FY21 earnings, we believe stock is fairly valued. We do not expect the stock to get rerated, as the current return ratio remains lower-than-earlier. Hence, as the stock offers limited upside from the current level, we maintain our HOLD recommendation on the stock with a revised Target Price of Rs550 (25x FY21 EPS).
Valuation & Outlook: Although sales volumes are expected to grow due to gains in market share, operating environment remains challenging. Accordingly, we revise down our estimates & now expect revenues, PAT to grow at 13.2%, 20.1% CAGR to | 3,787.2 crore, | 327.0 crore, respectively, in FY19-21E. We downgrade the stock to HOLD with a target price of | 515/share (25x FY21E EPS).
Outlook & Valuation: Consistent outperformance vis-à-vis the industry in terms of volume growth and superior margin profile bode well for KJC. However, considering current valuations at 30x of FY20 and 25x of FY21 earnings, we believe stock is fairly valued. We do not expect the stock to get rerated, as the current return ratio remains lower than earlier. Hence, as the stock offers limited upside from the current level, we downgrade our recommendation on the stock to HOLD from BUY with a revised Target Price of Rs591 (25x FY21 EPS).
Stock is currently trading at valuations of 31.4x and 26.8x P/E on FY20 and FY21 estimates respectively. We tweak our estimates to factor in FY19 financials and also introduce FY21 estimates. We roll forward our target price on FY21 and arrive at a revised target price of Rs 653 based on 30x FY21 estimates (Rs 572 earlier). Post the NGT ban on use of coal gasifiers, unorganized players are witnessing increased power and fuel cost due to shift towards gas and hence the price differential between organized and unorganized players is reducing. Along with this, with improved compliance towards e-way bill implementation post elections, organized players like Kajaria Ceramics are likely to benefit with market leading position and wide offering of products. We remain positive on the company and upgrade the stock to BUY from ACCUMULATE earlier.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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