Edelweiss' research report on Kajaria Ceramics
Kajaria Ceramics’ (KJC) Q4FY17 consolidated revenue and PAT surpassed our and consensus estimates on strong volume growth of 11% YoY versus our 7% estimate. EBIDTA margin at 18% declined by 230bps YoY as KJC incurred higher ad and brand promotional expenses and fuel costs.
We maintain ‘BUY’ with target price of INR 708, valuing the stock at 28x FY19E EPS of INR 25.2. Though current valuation appears stretched, we believe the stock continues to fetch higher multiple as organised players are expected to gain market share in GST regime.
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