Kajaria Ceramics

The market is obviously enthused with the Q3FY15 numbers of Kajaria Ceramics as the stock remained firmly in the green post its announcement. On a 30% (YoY) rise in consolidated sales at Rs.554 crore of which 49% came from own manufacturing facility, 31% from its JVs and balance 20% from outsourcing and imports. Net profit showed a good 55% growth at Rs.46 crore. EBITDA was up 19% at Rs.88 crore while EBITDA margins rose smartly from 13.08% to 15.84%. We could also be seeing the base effect at work here because last fiscal, during the same period the company had a one-month strike which had affected its performance.

The best part about the company’s performance is that it has consistently worked on reducing debt. Its consolidated debt which at the beginning of FY15 stood at Rs.236 crore is now currently at Rs.152 crore. Interest outgo has come down 49% from 11 crore to Rs.5.5 crore. The company is on track to commission 8.00 MSM tile capacity by March 15 taking its operational capacity to 62.10 MSM by the end of this fiscal. The company is no beneficiary of crude oil price fall but would gain big time if Govt reduces price of gas, which is its main fuel. Its consolidated net profit for 9MFY15 at Rs.124 crore which is its entire FY14 net profit. Clearly, it will surpass FY14 numbers