Buy Kajaria Ceramics - Emkay

Reco: BUY
CMP: Rs 109
Target Price: Rs 143

Topline growth continues; re-iterate BUY

- Q3 FY12 results were in line with our est. Revenues grew by 38% yoy to Rs 3.5bn while EBITDA grew by 41% yoy.

Rs 561mn. Company reported PAT of Rs 211mn, 20% yoy.

Despite intensifying cost pressures in the form of increase in gas & other input costs, rupee depreciation, Kajaria has been able to improve margins 40bps yoy/80bps qoq to 16.0%.

Management expects to clock 25% topline growth over the next 2 years and has set target of Rs 20bn by FY14. EBITDA margins are likely to remain around 15-16%.

We expect inorganic growth to remain the thrust area for management supported by healthy balance sheet. Reiterate BUY keeping FY12E / FY13E est of Rs 11.1/14.3 intact.

Source : Equity Bulls

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