Kajaria Ceramics - Q2FY21 Result Update - ICICI Securities

Kajaria Ceramics' Q2FY21 performance was resilient with sales volumes up 0.3% YoY at 19.8 MSM as blended utilisations went back to 90% coupled with a strong rebound in demand tier II, III cities. The topline was down 0.3% YoY at Rs. 712.5 crore, albeit realisations were down 2.4% YoY, as a result of product mix. The company reported EBITDA of Rs. 143.7 crore with margins at 20.2%, up 544 bps YoY driven by lower power costs (down 12.4% YoY) on account of subdued gas prices and continued reduction in some overheads. The beat at the operating performance level percolated to PAT wherein it was reported at Rs. 89.1 crore, down 4.4% YoY.

Valuation & Outlook

Notwithstanding weak FY21 for the tiles industry, Kajaria's impressive show in tier II towns and beyond is heartening. Continued export demands for Morbi players would improve both the demand and pricing scenario for the organised player. Kajaria, with a net cash balance sheet and superior brand, is likely to capitalise on market share gain. We raise our earnings estimates by 52% and 41%, respectively, given low cost structure. We upgrade to BUY with a revised target price of Rs. 670/share, at 30x FY22E P/E.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_KajariaCeramics_Q2FY21.pdf

Shares of KAJARIA CERAMICS LTD. was last trading in BSE at Rs.572.3 as compared to the previous close of Rs. 565.4. The total number of shares traded during the day was 85919 in over 4761 trades.

The stock hit an intraday high of Rs. 583.8 and intraday low of 556.4. The net turnover during the day was Rs. 48920680.

Source : Equity Bulls

Keywords