Kajaria Q3 net up 28 per cent: stock sees profit booking

Vitrified tile maker company Kajaria Ceramics Ltd came out with its Q3FY16 numbers on Wednesday. Company posted a good set of numbers, with profits for the quarter rising 28 per cent on a yearly basis due to good demand for its products in the market.

Kajaria Ceramics is engaged in manufacturing and trading of ceramics, polished and glazed vitrified tiles. The company offers many products ranging from floor tiles; ceramic wall tiles ; to sanitary ware; and faucets.

The company’s total income increased by 8 per cent Y-O-Y (year on year) to Rs 601.59 compared to Rs 556.18 crore in the same period last fiscal. Spurt in construction activities, and  government drive to build toilets all over the country has catalyzed the company's sales. However, according to the management volume growth was restricted due to the Chennai floods. Operationally EBITDA (Earnings Before Interest, Depreciation and Amortization) grew by 34 per cent yearly to Rs 117.31 crore, in comparison to Rs 87.45 crore attained in the corresponding quarter of last fiscal. Margins too expanded strongly by 300 basis points to 19 per cent, primarily due to cost benefits arising from softening of commodity prices, especially fuel. Profits after tax increased by 28 per cent Y-O-Y to Rs 58.19 crore from Rs 45.61 crore achieved in the same period of previous fiscal.

Sequentially, company’s performance was more or less flat with sales revenue declining by 1 per cent. EBITDA decreased by 2 per cent and PAT by 1 per cent Q-O-Q (quarter on quarter).

According to the company officials, the benefit of lower fuel cost will be passed onto customers in the form of discounts.

Responding to the positive set of results Kajaria scrip came under heavy selling pressure from the investors. Kajaria’s stock in early hour of trade came very close to touch its 52-week high, but as the results were announced the stock saw heavy profit booking and closed down 1.71 per cent quoting Rs 955.05 on NSE.