Despite Forex loss, Kajaria Ceramics PAT up 18 %

Shrikant / 18 Jan 2012

Kajaria Ceramics, the largest manufacturers of ceramic/vitrified tiles in India, had announced its third quarter results on Tuesday, 17 January 2012. Company posted decent numbers for the quarter ended December 2011. Management has also given a full year guidance of top-line growth of 35 per cent.

 

Kajaria Ceramics, the largest manufacturers of ceramic/vitrified tiles in India, had announced its third quarter results on Tuesday,17 January 2012. Company not only posted a decent numbers for the quarter ended December 2011 but also gave a full year guidance of top line growth of 35 per cent. 

Its standalone revenues increased by 37 per cent to Rs 347.98 crore while net profit increased by 18 per cent to Rs 20.78 crore on YOY basis for the December quarter. EBITDA margins also improved by 10 basis points on YOY basis and 90 basis points on sequential basis. Interest expense doubled at Rs 15.08 crore during the quarter. 

During this quarter company has witnessed YoY growth of 28 per cent in production volumes and 32 per cent in sales volumes. For the period of nine months these figures are 40 per cent and 34 per cent respectively. Its current outstanding debt is Rs 269 crore and debt to equity ratio stands at 0.96 which is improved from 1.26 in March 2011. 

For the period of 9 months ended December 2011 (Standalone), company has reported 39 per cent rise in top line to Rs 934.13 crore. Its net profit also rose by 34 per cent to Rs 56.51 crore. 

On consolidated basis its revenues stood at Rs 350.32 crore for December quarter and Rs 938.91 crore for 9 months ended December 2011. Consolidated net profit was Rs 21.06 crore for quarter and Rs 57.39 crore for nine month period. These figures are not comparable as company started reporting consolidated numbers only after buying stake in the subsidiary in February 2011. 

Going forward, company expects margins to remain stable in the near to medium term. It also doesn’t see drop in the demand. Despite growth in the raw material prices, company has maintained its margins which shows good signs that profitability is sustainable. It must also be noted that company suffered a Forex loss of Rs 4.96 crore in this quarter despite which it has put in good numbers. 

On the bourses also its performance has been very good. In 2011, when Sensex sunk by 24 per cent, Kajaria Ceramics surged by 36 per cent. One can see the strong numbers put by the company has driven the stock upward. Other companies are also growing with a rate of 25-35 per cent indicating that there is enough space for the growth. Also with the expected interest rate reversal the demand for ceramics products will further pick up which is good for the entire sector. One can look at buying the stock on dips for better capital appreciation.

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