Buy Kajaria Ceramics; target of Rs 1550: Emkay Global Financial

buy

Emkay Global Financial' research report on Kajaria Ceramics

The company has delivered superior profitability with EBITDA margins significantly expanding by 450bps YoY/110bps QoQ in Q2FY26. The margin profile of 17-18% in H1FY26 is notably higher than the normative range of 14-16% seen earlier. On the back of several cost-saving initiatives, profitability is expected to sustain within this range going ahead. Accordingly, we increase EBITDA margin by 160-190bps for FY26-28E. On the other hand, while we expect the company to gain market share (increase in market penetration), we remain cognizant of the sluggish demand scenario and, hence, now build in sales volume CAGR of 6.1% over FY25-28E (vs 8.7% earlier). The balance sheet is sturdy (net cash) and return ratios likely to improve.

Outlook

We maintain BUY on Kajaria while raising our TP by ~7% to Rs1,550 (from Rs1,450).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Kajaria Ceramics - 17102025 - emkay