Buy Kajaria Ceramics; target of Rs 1050: Emkay Global Financial

Emkay Global Financial's research report on Kajaria Ceramics

Kajaria’s Q4FY25 performance was weak on sales volumes as well as profitability fronts and missed our expectations. However, on a positive note, it has gained market share in FY25 as sales volume growth of 6% YoY was ahead of the industry (2% YoY growth). While we anticipate gradual demand recovery over the medium term, better penetration and market share gains would lead to KJC growing ahead of the industry. Further, profitability is expected to improve on the back of cost optimization measures as well as focus on core business (plywood business discontinued). Balance sheet remains sturdy, return ratios are likely to improve.

Outlook

We maintain BUY while cutting our TP by 16% to Rs 1050 from Rs1,250 earlier.