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Jefferies maintains buy on Kajaria Ceramics, revises target to Rs 685

Buy Kajaria Ceramics Ltd. at a price target of Rs 685.0 .|
Updated: Sep 18, 2019, 08.26 AM IST
Jefferies has maintained buy rating on Kajaria Ceramics in the long term and revised target price to Rs 685 from Rs 720. Shares of Kajaria ended up 1% at Rs 530.6 on Tuesday while the BSE Sensex plunged 642.22 points to 36,481.09.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 699.99 crore, down -14.14 % from last quarter sales of Rs 815.31 crore and up 6.54% from last year same quarter sales of Rs 657.02 crore. The company has reported net profit after tax of Rs 50.38 crore in the latest quarter.

Investment Rationale

While consumer sentiment was weak in July-August 2019, also due to floods across regions, the brokerage expects Kajaria's revenue and margin traction to revive from second half of FY20. Over FY19-22, the brokerage estimates sales/PAT at 12%/21% CAGR, driven by multiple triggers such as market share gains post NGT ban, boost to housing, product mix optimisation.

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