Sharekhan's research report on Kajaria Ceramics
The company reported a marginal miss on consolidated revenues, while OPM disappointed owing to lower-than-expected gross margins for Q2FY2023. The management would target 15% tile volume growth for FY2023 against earlier guidance of 15-20% y-o-y volume growth. OPM are slated to increase over 200bps from Q2 in H2FY2023 aided by higher usage of alternative fuels. The company would be setting up JV unit in Nepal with 8MSM capacity at a capex of Rs. 250 crores which would aid in incremental volumes from FY2025.
Outlook
We retain a Buy rating on Kajaria Ceramics with an unchanged PT of Rs. 1300 rolling forward our valuation multiple to September 2024 earnings.
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