Buy Kajaria Ceramics., target price Rs 1430: HDFC Securities

HDFC Securities has buy call on Kajaria Ceramics with a target price of Rs 1430. The current market price of Kajaria Ceramics is Rs 1190.65.

Kajaria Ceramics, incorporated in the year 1985, is a Mid Cap company (having a market cap of Rs 18994.05 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 30-09-2022, the company has reported a Consolidated Total Income of Rs 1085.39 Crore, up 6.80 % from last quarter Total Income of Rs 1016.31 Crore and up 10.68 % from last year same quarter Total Income of Rs 980.67 Crore. Company has reported net profit after tax of Rs 68.89 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 30-09-2022, the company has a total of 16 Crore shares outstanding.

Investment Rationale
The brokerage continues to like the company for its industry-leading growth and robust free cash flow outlook. Kajaria has been aggressively expanding its footprint across tier-2/3 markets and enjoys premium positioning. The company has consistently delivered industry-leading margins. It expects gas prices peaked out in Q2FY23. The rebound in exports (from Morbi) should reduce pressure in domestic markets, thereby further boosting Kajaria’s margin.

Promoter/FII Holdings
Promoters held 47.49 per cent stake in the company as of 30-Sep-2022, while FIIs owned 19.58 per cent, DIIs 22.82 per cent.