Buy Kajaria Ceramics; target of Rs 1600: Sharekhan

Sharekhan's research report on Kajaria Ceramics

For Q1FY2024, operational performance broadly remained in-line with marginally lower volume growth was offset by higher-than-expected OPMs. Net cash surplus rise q-o-q. Management retained 14-16% y-o-y consolidated revenue growth supported by 13-15% y-o-y tile volume growth and 14-16% OPMs for FY2024. H2 to show strong demand growth. Commercial production at Sikandrabad and modernized production from Gailpur to commence from August. Nepal JV project remain on track to commission by March 2024.

Outlook

We retain Buy on Kajaria Ceramics with a revised PT of Rs. 1,600 increasing our valuation multiple considering strong demand tailwinds from realty sector upcycle and favourable industry exports outlook.

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