Buy Kajaria Ceramics; target of Rs 500: Kotak Securities

October 10
17:25 2018

Kotak Securities’ research report on Kajaria Ceramics

Tile industry has continued to remain impacted by higher gas prices, rupee depreciation and lower than expected compliance towards GST. In our recent interaction with Kajaria Ceramics, company has mentioned that a significant shift of unorganized segment demand towards organized segment has not happened even after e-way bill implementation. Demand is coming from individual housing and renovation works but builder segment continues to remain weak. Prices seem to have largely bottomed out but margins can come under pressure due to higher power costs.


We revise our estimates to factor in slightly lower volumes and higher costs and arrive at a revised price target of Rs 500 based on 28x FY20 estimated earnings (Rs 551 earlier).

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