Buy Kajaria Ceramics; target of Rs 651: Dolat Capital

Dolat Capital's research report on Kajaria Ceramics

In the last one & half year Ceramic Industry faced multiple challenges, Demonetization and GST Implementation restricted volume growth. Collective might of the Un-organized players exerted volume/pricing pressure across product range (attributed to Vibrant Ceramic expo hosted by Morbi based players in Nov’2017 & Capacity addition in GVT segment by Morbi based players). We believe volume/pricing pressure will ease for the organized players as our channel checks and management commentary suggests Morbi association is unlikely to host next edition of Vibrant Ceramic expo in the current year. Further the implementation of E-way from 1st of April 2018 will bring in relief for the organized players. However rising P&F cost remain a major concern for the industry.

Outlook
We value KJC at 30x FY20E EPS of ` 21.7, Recommend BUY with a revised TP of Rs651/share, implying an upside of 21%. For all recommendations report, click here

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