Sharekhan has given Buy recommendation for Kajaria Ceramics with a target price of Rs. 1200 in its research report issued on May 17, 2022
Sharekhan’s research report on Kajaria Ceramics
Kajaria’s Q4 numbers lagged expectations led by muted tile volume growth and a steep rise in gas prices along with other raw materials weighing on OPM. The management guided for a 15-20% tile volume growth for FY2023 supported by completion of capacity expansions during April-May 2022 and sustained demand from real estate sector. OPM guidance reframed due to volatility in gas prices. The company withdrew a 5 MSM slab manufacturing capacity expansion plan at Gujarat. It would continue to undertake close to Rs. 300 crore of capex per annum over the next three years.
We retain a Buy rating on Kajaria Ceramics with a revised PT of Rs. 1200, factoring downwardly revised estimates and believing recent correction factors in the rise in gas prices.