Kajaria Ceramics

Kajaria Ceramics is the largest manufacturer of ceramic/vitrified tiles in India. It has an annual capacity of 41.00 mn. sq. meters, distributed across six plants - one in Sikandrabad (UP), one in Gailpur (Raj.), three in Morbi (Guj.) and one in Vijaywada (AP). The Q1Fy13 numbers of the company were very dull and staid and compared to that, current Q2 does look better.  QoQ, its consolidated net sales rose 9% (23% on a YoY) at Rs.389 crore  and net profit was at Rs.26.54 crore, up 19% (38% on a YoY).  This was driven by a 18% (YoY) growth in production and 12% growth in sales volume. The good part is that in this quarter, there has been a 17% rise in revenue coming in from own manufacturing unit, there was a 177% jump in growth through JVs and outsourcing/imports rose 7%.  But EBIDTA margin shows some pressure,  which at 15.58% was lower than 15.88% of Q1FY13 and 16% of Q2FY12. Its total debt at end of H1FY13 stands at Rs.320 crore.

It had acquired a 51% stake in Soriso Ceramic in Morbi, Gujarat in Feb’11 and in H1FY13 worked at 72% capacity and company expects it to ramp up in second half. It had aslo acquired 51%stake in Jaxx Vitrified in Gujarat and that operated at 84% capacity and another plant, Vennar Ceramics, operated at 83% capacity. It recently acquired another company – 51% stake in Cosa Ceramics.  Growth through such acquisitions is the best strategy to grow for a greater pan India presence. And improvement of product profile by giving more value added tiles will help the company grow faster. With second half usually being better than first half, hopefully, the rest of the fiscal should be good. Its H1Fy13 net profit at Rs.49 crore v/s Rs.81 crore in 12MFY12 shows that it needs to increase its growth momentum to post better numbers in FY13.