Kajaria Ceramics (500233) Q4 18/19 earnings summary

Executive summary

• FY19 consolidated revenue rose 9% to ₹2,956 crore as sales volumes improved, while EBITDA fell 2% and net profit after minority interest declined 4% to ₹227 crore amid high gas costs and subdued demand.

• Bathware delivered stronger growth and profitability; plywood added ₹17 crore of revenue in its first operating year.

Financial highlights

• Consolidated net sales increased 9.06% to ₹2,956.20 crore; EBITDA declined 1.51% to ₹449.49 crore, mainly due to higher gas prices that could not be passed through.

• Consolidated profit before tax was ₹358 crore versus ₹355 crore; profit after tax after minority interest was ₹227 crore versus ₹235 crore.

• Standalone revenue rose 6% to ₹2,726 crore; standalone net profit declined 3% to ₹246 crore.

• Consolidated operating cash flow increased to ₹317.36 crore from ₹238.17 crore; cash and bank balances rose to ₹252.38 crore at year-end.

Outlook and guidance

• FY20 outlook was positive on improving macro conditions, stable interest rates, government support and the Morbi coal-gasifier switch, expected to support branded tile demand.

• A 5 MSM glazed vitrified tile facility in South India was expected to start in September 2019; sanitaryware capacity expansion was also expected to begin operations in FY20.

• Priorities included deeper branding and distribution, more exclusive showrooms, asset-light volume growth, expanding bathroom solutions and widening plywood distribution.