Kajaria Ceramics (500233) Q4 16/17 earnings summary

Executive summary

• FY17 consolidated revenue rose 6% to ₹2,546 crore, EBITDA increased 8.5% to ₹496 crore and profit attributable to shareholders grew 9% to ₹253 crore despite weak real estate demand and demonetization disruption.

• Growth and margin gains were supported by value-added and large-format tiles, product launches and cost optimization; management targeted 100 MSM of tile capacity by 2020.

Financial highlights

• Consolidated revenue from operations was ₹2,854.51 crore vs ₹2,700.58 crore in FY16; net sales were ₹2,545.62 crore vs ₹2,408.82 crore, up 6%.

• Consolidated EBITDA was ₹496.33 crore vs ₹457.46 crore, up 8.5%; net profit attributable to shareholders was ₹252.84 crore vs ₹231.33 crore, up 9%.

• Consolidated basic EPS was ₹15.86 vs ₹14.51 in FY16, restated for the October 2016 share split.

• Standalone net sales reached ₹2,526 crore, up 3.48%; standalone EBITDA rose 14% to ₹439 crore and PAT rose 14% to ₹270 crore.

Outlook and guidance

• Targeting 100 MSM of tile capacity by 2020, from 68.90 MSM at March 2017; plans include greenfield, brownfield and inorganic additions.

• Adding 3.5 MSM of ceramic wall and floor capacity at Gailpur, targeted for September 2017; a 5 MSM GVT unit with Floera was expected to start in H2 FY19.

• Planned product and channel priorities include more high-value large-format tiles, expanding polished vitrified tile SKUs from 74 to ~300, and increasing Prima Plus showrooms to 100 by March 2019.

• Management expected demand to improve as demonetization effects eased and GST, RERA, affordable housing and infrastructure programs supported formalization and housing growth.