We had recommended Kajaria Ceramics in issue no. 8 dated March 20-April 2, 2017 under “Choice Scrip” section when the scrip was trading at ₹ 553.65. Our recommendation was backed by positive macroeconomic growth factors, expansion plans and attractive valuations.
Kajaria Ceramics is the largest manufacturer of ceramic/vitrified tiles in India, with an annual aggregate capacity of 63.90 mn. sq. metres, distributed across eight plants - Sikandrabad in Uttar Pradesh, Gailpur and Malootana in Rajasthan, four plants in Gujarat and one at Vijayawada in Andhra Pradesh.
It is the largest exporter of ceramic tiles in India, with exports to over 20 countries and having an exclusive office/ showroom in UAE. The company has an in–house research and development facility that focuses on developing new designs and creating cost effective products.
On the financial front, Kajaria Ceramics’ revenue increased 4.44 per cent to
₹ 669.00 crore in Q1FY18 from ₹ 640.55 crore in Q1FY17. However, the company’s PBDT declined 15.17 per cent to ₹ 94.78 crore in the first quarter of FY18 on a yearly basis. The company’s net profit also declined 20.32 per cent to ₹ 52.14 crore for the same period.
On an annual basis, the company’s revenue rose 11.11 per cent to ₹ 2,720.11 crore in FY17 compared to the previous fiscal. The company’s PBDT increased 15.55 per cent to ₹ 460.46 crore in FY17 on a yearly basis. The company’s net profit increased from ₹ 234.89 crore in FY16 to ₹ 270.16 crore in FY17.
After our recommendation, the share price of Kajaria Ceramics has appreciated by 34.9 per cent. We would advice our reader investors to BOOK PROFIT as the stock has witnessed good run-up from our recommended price. (Closing price as on Sept 26, 2017)