Kajaria Ceramics - Q1FY21 Result Update - ICICI Securities

Kajaria Ceramics reported a washout quarter, as expected, impacted by Covid-19 led lockdown. Sales volumes fell 61% YoY growth to 7.7 MSM on account of extended impact of lockdown due to Covid-19. The topline de-grew 60% YoY to Rs. 277.6 crore with realisations staying firm (up 1.7% YoY). The company reported EBITDA loss of Rs. 7.6 crore on account of negative operating leverage. Weakness at the operating level percolated to PAT wherein it reported a loss of Rs. 27.1 crore.

Valuation & Outlook

It is likely to be a weak FY21 for the tiles industry, as a whole, with a washout H1, discretionary nature of demand and real estate demand pressure. Kajaria, however, with a net cash balance sheet and superior brand, is likely to tide over the challenging times and even capitalise on market share gain during recovery phase. We raise our earnings estimates by 4% and 8%, respectively, given the commentary by management on production and demand traction. However, we would turn constructive once sustained volume recovery is seen. We maintain our HOLD recommendation on the stock with a revised target price of Rs. 425/share, at 27x FY22E P/E.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_KajariaCeramics_Q1FY21.pdf

Shares of KAJARIA CERAMICS LTD. was last trading in BSE at Rs.414.5 as compared to the previous close of Rs. 403.3. The total number of shares traded during the day was 660132 in over 1145 trades.

The stock hit an intraday high of Rs. 415.05 and intraday low of 402. The net turnover during the day was Rs. 270649928.

Source : Equity Bulls

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