India's Kajaria Ceramics beats Q1 profit estimates on stronger demand

Kajaria Ceramics

26/07/2023 11:23

By Hritam Mukherjee
       BENGALURU, July 26 (Reuters) - India's top tilemaker
Kajaria Ceramics  KAJR.NS  reported a better-than-expected
first-quarter profit on Wednesday, as sustained demand for home
fixtures offset higher costs. 
    The company said its consolidated net profit rose more than
16% to 1.08 billion rupees ($13.17 million) in the quarter ended
June 30.
    Analysts on average were expecting a profit of 1.05 billion
rupees, according to Refinitiv IBES data. 
    Demand for tiles and other home fixtures has risen in the
country amid increasing purchases by homebuyers and pent-up
demand for renovations. 
    Consolidated revenue from operations for the New Delhi-based
firm rose over 5% to 10.64 billion rupees, as sales of its
vitrified and ceramic tiles remained robust in the quarter.
    The company, earlier in May, had set an expected revenue
growth target of 14% to 16% in fiscal 2024. 
    Total expenses climbed 4.5% to 9.31 billion rupees, with
higher purchases of stock-in-trade offsetting the decline in
input costs and power and fuel charges.
    Falling prices of natural gas aid the margins of ceramic
product makers as they are dependent on the fuel to power their
tile kilns. 
    Kajaria Ceramics had said in May that it would not raise
prices of its products in the current fiscal due to softer gas
prices. 
    The company's consolidated core profit margins expanded to
15.9% in the quarter, from 15.23% last year. 
    "We remain optimistic about the medium to long-term
prospects of the real estate sector and our capacity building
initiatives," Chairman Ashok Kajaria said in a statement. 
    Kajaria Ceramics shares fell 4.5% on the day, while they are
up about 19% for the year so far. 
    "The results are in line with expectations," said Praveen
Sahay, research analyst at brokerage Prabhudas Lilladher, adding
shares slipped on profit booking. 
    
($1 = 82.0054 Indian rupees)

 (Reporting by Hritam Mukherjee in Bengaluru; editing by Eileen
Soreng)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter:
@MukherjeeHritam;))