PL First Cut – Kajaria Ceramics – Q2FY24

PL First Cut – Kajaria Ceramics – Q2FY24 – Praveen Sahay – Research Analyst, Prabhudas Lilladher Pvt Ltd

Kajaria Ceramics – Q2FY24 Result First Cut – Lower volume growth continue

(CMP: Rs1233 | MCap: Rs196bn | Accumulate)

➡️ Revenues grew by 4.1% YoY to Rs11.2bn (PLe: Rs11.4bn) vs con. est.: Rs11.6bn. Tiles segment revenues grew by 2.6% YoY (contributes 89%sales) and other segment revenues grew by 17.9% YoY.

➡️Gross margins expanded by 110bps YoY to 59.2%. (cons. est.: 55.9%)

➡️ EBITDA grew by 38.9% YoY to Rs1.8bn (PLe: Rs1.9bn) vs con. Est.: Rs1.9bn. EBITDA margins improved by 400bps YoY to 16.0%, (PLe: 16.6% & cons. est.: 16.1%)

➡️ Fuel expenses %sales reported 19.7% in Q2FY24 from 24.8% in Q2FY23

➡️PBT grew by 47.3% YoY to Rs1.5bn (PLe: Rs1.6bn) vs cons. est.: Rs1.6bn

➡️ PAT grew by 53% YoY to Rs1.1bn (PLe: Rs1.2bn) vs con. Est.: Rs1.2bn

➡️ Tiles Volume grew by 6.3% YoY (PLe: 7.3% YoY)

➡️Own manufacturing tiles (contributes 51% of sales) revenue decline by 4.4% YoY to Rs5.7bn. Sales volume flat YoY to 14.8MSM.

➡️Subsidiaries Tiles (contribute 16% of sales) revenue grew by 12.6% YoY to Rs1.8bn

➡️Outsourcing Tiles (contribute 22% of sales) revenue grew by 14.5% YoY to Rs2.5bn

➡️Sanitary-ware/Faucet (contribute 8% of sales) grew by 14.6% YoY to Rs853mn

➡️Working capital at 53days by Sep-23 vs 62days in June-23.

The stock is currently trading at 33x/29x FY25/FY26 earnings.