Buy Kajaria Ceramics; target of Rs 494: Dalmia Securities
Dalmia Securities’ research report on Kajaria Ceramics
Kajaria Ceramics Limited (KCL) is the largest manufacturer of ceramic/vitrified tiles in India and the 9th largest in the world. KCL has an annual capacity of 68 million square meter MSM) presently, distributed across seven plants – one in Sikandrabad (UP), one in Gailpur (Rajasthan), one in Malootana (Rajasthan), three in Morbi (Gujarat) and one in Vijaywada (AP). The company’s manufacturing units are equipped with cutting edge modern technology. In-tense automation, robotic car application and a zero chance for human error are few reasons for Kajaria to be the number 1 player in Indian industry.
We have reduced our target price to INR 494 from INR 623, valuing the stock at P/E of 30x FY20E (15% discount to Last 5 years average P/E of 35x) implying an upside of 29%.
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