1
Please refer to important disclosures at the end of this report
1
1
Kajaria Ceramics Limited (KCL) is the largest manufacturer of ceramic and
vitrified tiles in India. Being the market leader, it has significantly increased its
capacity from 30.6 MSM in FY11 to 68.6 MSM in FY17. This was driven mainly
through the acquisition of a stake in Cosa, Soriso, Vennar, Jaxx and
expansion/conversion of existing facilities. The company has spent `74crore on
advertisement & promotion and plans to spend `100crore for FY18. With the
demand environment improving, the management has guided for double digit
volume growth over the next three years. Prior to demonetisation, only 2% of
transactions happened via credit card and cheques, which has now increased to
~50% at the dealer level. The company plans to spend ~`400crore on capex
over the next few years, which includes `50crore on the Gailpur plant expansion
and `130crore for Floera plant. The revenue contribution from Sanitaryware &
faucetware segment was at 4.3% in FY17and it is expected that the revenue from
this division will be at 5-6% of the overall topline in FY18. It is expect that after
implementation of GST, it would act as a key catalyst for KCL and reduce pricing
differential between organised & unorganised tiles. Further, with demand in real
estate sector set to pick up with government’s focus on affordable housing, KCL
would be well placed to capture this opportunity. The company has reported
consistent improvement in cash flow from operations from `90.8cr in FY12 to
`271.3cr in FY16. The company has reported consistent profit growth of 30.9%
CAGR over 5 years and has a healthy return on equity (ROE) of 28.6% for the
last 3 years. The company has been maintaining a healthy dividend payout of
18.84%. Hence Buy.
BUY
CMP `702
0.6
Reuters Code
KAJR.BO
KJC@IN
1
BSE Sensex
31,273
Nifty
9,654
Face Value (`)
Miscellaneous
Market Cap (` cr)
11,349
52 Week High / Low
788/437
Avg. Daily Volume
33,544
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Kajaria Ceramics
Others | Miscellaneous
June 5, 2017
2
Kajaria Ceramics | Miscellaneous
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL
and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is a
registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
Disclosure of Interest Statement Kajaria Ceramics
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)