Buy Kajaria Ceramics, target price Rs 1290: ICICI Securities

ICICI Securities has buy call on Kajaria Ceramics with a target price of Rs 1290.The current market price of Kajaria Ceramics is Rs 1034.6.

Kajaria Ceramics, incorporated in the year 1985, is a Mid Cap company (having a market cap of Rs 16550.63 Crore) operating in Building Materials sector.

Kajaria Ceramics key Products/Revenue Segments include Tiles, Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 1098.61 Crore, up 1.22 % from last quarter Total Income of Rs 1085.39 Crore and up 2.13 % from last year same quarter Total Income of Rs 1075.65 Crore. Company has reported net profit after tax of Rs 73.66 Crore in latest quarter.

The company’s top management includes Mr.Ashok Kajaria, Mr.Chetan Kajaria, Mr.Rishi Kajaria, Mr.Dev Datt Rishi, Mr.Raj Kumar Bhargava, Mr.Debi Prasad Bagchi, Mr.H Rathnakar Hegde, Mrs.Sushmita Shekhar. Company has Walker Chandiok & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 16 Crore shares outstanding.

Investment Rationale
The company has partly started using bio-fuel from Dec’22 in its Northern plants (~50% cheaper than current gas cost) which should aid in some margin improvement from Q4 and further in FY24E. The brokerage cuts its EBITDA estimates for FY23-FY25E by ~7%/9% and maintains BUY with a rolled over Mar’24 revised target price of Rs1,290.