with market value of 19,714.58 crore, Kajaria Ceramics Limited is a mid-cap company dealing in the Consumer Discretionary Goods and Services (CDGS) industry. Kajaria is India’s top producer of ceramic wall and floor tiles, vitrified tiles and designer tiles. Its annual total capacity of 82.80 million square meters is spread across eight facilities: Secunderabad in Uttar Pradesh, Gelpur and Malutana in Rajasthan, Vijayawada and Srikalahasti in Andhra Pradesh, and three plants in Gujarat. Among the multibagger stocks making investors millionaires on the long-term investment horizon are Kajaria Ceramics shares, let’s find out how.
Share Price History of Kajaria Ceramics
Shares of Kajaria Ceramics Limited closed on NSE on Friday 1,240.00 per piece, down 0.31% from previous close 1,243.85. The stock saw total volume of 416,593 shares on Friday, which was significantly higher than the 20-day average volume of 206,336 shares. share price skyrocketed 3.40 to the current price level as of Jan 1, 1999 which logs a multibagger return and an all-time high of 36,370.59%. As a result, a 1 lakh investment in shares 23 years ago will be worth today 3.64 crores.
The stock has gained 71.44% during the last five years, and has generated a multibagger return of 135.44% over the past three years. The stock has climbed 8.73% over the past year, but it has fallen 5.72% so far. On NSE, the stock had touched a 52-week high at 1,374.90 (10-Jan-2022) and 52-week low of At 885.30 (09-March-2022), it shows that the stock is trading 9.81% below the high and 40.06% above the low at the current market price. On Friday, the stock was seen trading above the Exponential Moving Average (EMA) for 5 days, 10 days, 20 days, 50 days, 100 days and 200 days.
As on September 16, 2022, the RSI indicator price of Kajaria Ceramics Ltd was 67.10 which indicates that the stock was neither overbought nor oversold. For the quarter ended June 2022, the company recorded promoter shareholding of 47.50%, FII of 19.58%, DII of 22.40% and Public shareholding of 10.52%. The book value per share of the company is 137.38 resulting in a price-to-book value (P/B) ratio of 9.02 and the stock’s TTM PE ratio of 46.23, which makes the stock more valuable due to its higher P/B and PE than its peers such as Cera. Sanitaryware, Somani Ceramics, Orient Bell, Asian Granito India and Exaro Tiles.
Q1FY23 Kajaria Ceramics Results
On a consolidated basis, the company recorded net sales of 1008.22 crore in Q1FY23 as compared to 561.66 crore in Q1FY22 represents a year-on-year growth of 80%. The company’s EBITDA grew by 91% year-on-year 80.42 recorded in the corresponding quarter of the previous year 153.59 crore in Q1FY23 while EBITDA margin increased from 14.32% in Q1FY22 to 15.23% in Q1FY23.
Company reported profit before tax (PBT) 125.71 crore in Q1FY23 as compared to 56.88 crores were registered in Q1FY22, representing a year-on-year growth of 121%. The Profit After Tax (PAT) of the company grew by 114% yoy (YoY) 92.30 crore in Q1FY23. From 43.06 in Q1FY22. The company’s EPS has grown by 113% year-on-year from 5.80 2.71 in Q1FY22.
Should you buy Kajaria Ceramics shares?
Research analysts at broking firm ICICI Securities . It is recommended to ‘buy’ the stock for a target price of 1,355.00 by placing a stop loss of 1,110.00. They have put a target period of 3 months for the stock to hit the set target price.
He said in his research note that “BSE Consumer Durable Index has given a breakout from the falling channel signaling end of the corrective phase and resumption of structural uptrend. Going forward, we expect the consumption space to rise in the current festive session.” Will remain resilient, leading to better performance in the coming quarters. Within this space, we remain constructive on Kajaria Ceramics as it is a proxy game of consumption theme. The stock has generated a breakout above the last seven week range ( 1214-1107) has emerged from the previous key breakout zone indicating a continuation of the uptrend.”
“The stock, earlier during July 2022, generated a double bottom breakout with a base of around 100 week EMA. In the short time frame, it has completely retraced the decline of its previous 13 session ( 1214–1107) in only six seasons. A sharp retracement in the less than half-time range indicates strength and a strong price structure. We expect the stock to maintain a positive bias and move higher 1355 in the coming months as it is price parity with the previous major up move ( 970-1214) as estimated from last week’s low 1107,” said research analysts at ICICI Securities.
He further added that “Kajaria is expanding capacity across the entire product portfolio. It has commissioned 4.4 MSM of PVT capacity at its Morbi (Gujarat) plant during April 2022. The other two projects viz. 4.2 MSM of Ceramic Floor Tiles at Gelpur (Rajasthan) and 3.8 MSM of Glazed Vitrified Tiles at Srikalahasti (Andhra Pradesh) were also commissioned during May 2022. In addition, the company is investing 80 crore to set up a sanitaryware manufacturing facility of 8 lakh pieces per annum in Gujarat, which is expected to be completed by December 2023. In addition, it is adding new capacity of 6 lakh pieces/year at its tap plant at Gelpur, which will take the total capacity to 16 lakh pieces/annum and is expected to be completed by October 2022. Kajaria is likely to benefit from these capital expenditures during a better demand scenario.”
“We expect a 16% CAGR in Tiles Volume and 3.5% CAGR in Receipts, resulting in a ~20% CAGR (from) Tiles Revenue in FY22-24 5,351.6 crore) will be driven by a) expected growth in demand from Tier II and below cities, b) healthy capacity utilisation, c) expected growth in Kajaria capacity, d) improved distribution network and e) strong brand recall. Margins are likely to remain in the current range of 16.5 per cent despite ongoing volatility in gas prices, increasing global uncertainty and higher freight and packaging costs. In CMP, Kajaria is trading at ~34x FY24E P/E. With a net cash balance sheet and a better brand, it is a semi-game on better real estate landscape and expanding reach to Tier II/III cities,” said the analysts.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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