Sharekhan's research report on Kajaria Ceramics
Net earnings sharply beat estimates led by higher-than-expected OPMs aided by lower power & fuel costs. Working capital tightens and net surplus increases sequentially. Management targets a 14-16% y-o-y consolidated revenue growth supported by 13-15% y-o-y tile volume growth and 14-16% OPMs for FY2024. Company is undertaking modernisation of Gailpur unit, expansion at Sikandrabad facility and setting up manufacturing unit in Nepal.
Outlook
We upgrade Kajaria Ceramics to Buy with a revised PT of Rs. 1,420 increasing our valuation multiple to factor in strong steady growth supported by favourable industry business dynamics.
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