Kajaria Ceramics Q3 Results Review - Subdued Demand, Higher Gas Prices Weighed On Margins: IDBI Capital

IDBI Capital Report

Kajaria Ceramic Ltd.’s Q3 FY23 result was lower than our estimates, particularly on margins front as subdued demand (due to rainy as well as festive season) led to hard discounting as well as energy prices were at elevated levels.

The management guided that the company has shifted to alternate fuel and it would be 35% of overall energy requirement by mid of Q4 FY23E.

Kajaria’s focus on increasing dealers in untapped markets such as semi-urban areas which should result in better growth in upcoming quarters.

Net sales increased by 2.1% YoY to Rs 10.9 billion, while Ebitda came in at Rs 1.3 billion, down by 27.6% over Q3 FY22. The company reported net profit of Rs 0.7 billion, declined by 40.9% YoY.

We have introduced FY25E estimates in this report.

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