Accumulate Kajaria Ceramics; target of Rs 1604 Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Kajaria Ceramics with a target price of Rs 1604 in its research report dated October 23, 2024.

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October 24, 2024 / 11:04 IST

accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Kajaria Ceramics

Kajaria Ceramics (KJC) reported decline in profitability due to 250bps YoY contraction in margin in Q2FY24. It has downward revised its tiles volume guidance to 9-10% from 11-13% earlier and EBITDA margin to ~15% for FY25. Consequently, we have downward revised our earnings estimates by 9.5%/7.4%/2.8% for FY25/FY26/FY27E factoring in its soft performance in H1FY25 and downward revision in guidance. KJC reported healthy volume growth of +8.4% YoY during a challenging quarter, while realization corrected 2.8% YoY with increase in outsourcing volume and in sales of economy products, impacting gross margins.

Outlook

We expect revenue/EBITDA/PAT CAGR of 10.6%/12.5%/14.8% over FY24-27E. We have considered 9.8% CAGR in tiles volume over FY24-27 with cons EBITDA margin of 16.1% in FY27. Maintain ‘Accumulate’ rating, as we value the stock at 40x FY27 EPS to arrive at TP of Rs1,604 (Rs1,651 earlier).

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