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, Q2 was a bit better and compared to that, current Q3 is not all that great. Net sales was up 7% (QoQ) but higher fuel costs and interest outgo pulled down the net profit, which came in at Rs.25 crore, down 4%. EBIDTA margin has come down sharply from 15.58% to 13.24% on QoQ. The good part is that in this quarter, there has been a 9% rise in revenue coming in from own manufacturing unit, almost 5 times jump in growth through JVs while outsourcing/imports fell 16%. Its total debt at end of 9MFY13 stands at Rs.319crore.

It had acquired a 51% stake in Soriso Ceramic in Morbi, Gujarat in Feb’11 and in 9MFY13 worked at 74% capacity and company expects it to ramp up in the coming months. It had aslo acquired 51%stake in Jaxx Vitrified in Gujarat and that operated at 83% capacity and another plant,Vennar Ceramics, operated at 89% 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 9MFY13 net profit at Rs.74crore v/s Rs.81 crore in 12MFY12 shows that it will end current fiscal on a higher note.