Kajaria Ceramics Ltd. | Q3FY15 Result Update | Better than expectations; upgrade to BUY with target price of Rs 755 :: IndiaNivesh

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Kajaria Ceramics Ltd reported Q3FY15 results that outperformed our estimates on
profitability front. Net Sales were in-line with our estimates with a slight variation
of 1.4% on lower side. EBITDA outperformed 6.7% against our estimates due to
lower raw material expenses. PAT outperformed 22.7% due to better than expected
EBITDA margin, lower interest cost and lower effective tax rate.
Net Sales grew 29.6% yoy
Particulars Q3FY15 Q2FY15 Q3FY14 QoQ (%) YoY (%) 9mFY15 9mFY14 %Chg
Sales Volume (msm)
Own 7.2 7.5 6.6 -4.5 9.1 21.85 19.8 10.4
JV 4.9 3.8 3.1 28.6 57.0 12.47 10.1 23.7
Outsource 2.6 3.0 2.2 -12.9 20.6 8.78 7.5 17.9
Total 14.7 14.3 11.8 2.4 23.7 43.1 37.3 15.5
Sales Value (Rs Mn)
Own 2743 2833 2338 -3.2 17.3 8130 6788 19.8
JV 1752 1505 1075 16.4 63.0 4489 3405 31.8
Outsource 1043 1039 844 0.4 23.6 3285 3285 0.0
Total 5538 5377 4257 3.0 30.1 15904 13478 18.0
Avg Realisation (Rs/msm)
Own 382.6 377.3 355.8 1.4 7.5 372.1 342.8 8.5
JV 361.3 399.2 347.8 -9.5 3.9 360.0 337.8 6.6
Outsource 396.6 343.9 387.1 15.3 2.4 374.2 441.0 -15.1
Total 378.0 376.0 359.5 0.5 5.2 369.0 361.1 2.2
Revenue Mix (%) Bps Chg
Own 49.5 52.7 54.9 -316.9 -539.7 51.1 50.4 75.7
JV 31.6 28.0 25.3 365.4 639.1 28.2 25.3 296.1
Outsource 18.8 19.3 19.8 -48.5 -99.4 20.7 24.4 -371.8
Total 100.0 100.0 100.0 0.0 0.0 100.0 100.0 0.0
Bps Chg
Net sales of the company increased 29.6% yoy to reach Rs 5538 mn from Rs 4274
mn in Q3FY14 (vs. INSPL est: Rs 5617 mn). This was driven by 23.4% yoy volume
growth to reach 14.7 million square meters (msm) in Q3FY15 against 11.8 msm in
Q3FY14 (against our expectation of 21.3% volume growth). The share of own
capacity in revenue mix stood at 49.5% in Q3FY15 (vs. INSPL est: 50%) against
54.9% in Q3FY14. Average realisation increased 5.2% yoy to reach Rs 378 per msm
in Q3FY15 against Rs 359.5 per msm in Q3FY14.
For 9mFY15, net sales of the company grew 21.5% yoy to reach Rs 15904 mn from
Rs 13091 mn in 9mFY14. This was primarily driven by volume growth of 15.5% and
average realisation growth of 2.2%. The volume sales for 9mFY15 stood at 43.1
msm against 37.3 msm in 9mFY14. The share of own capacity stood at 51.1%
against 50.4% in 9mFY14.

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