India's Kajaria Ceramics beats Q4 profit view on stronger demand

Kajaria Ceramics

16/05/2023 10:20

BENGALURU, May 16 (Reuters) - India's largest tile maker
Kajaria Ceramics Ltd  KAJR.NS  reported a bigger-than-expected
quarterly profit on Tuesday, as strong demand for its products
offset higher expenses. 
    The company said its consolidated net profit rose about 13%
to 1.08 billion rupees ($13.21 million) in the quarter ended
March 31. 
    Analysts on average were expecting a profit of 1.01 billion
rupees, according to Refinitiv IBES data. 
    A real estate boom and pent-up demand for renovations have
helped sales of fixtures and other home-building items like
tiles. 
        Consolidated revenue from operations for the New-Delhi
based firm rose over 9% to 12.05 billion rupees, signalling
robust demand for its products - vitrified and ceramic tiles.
    "We remain optimistic about the demand outlook for the tile
industry," said Chairman Ashok Kajaria. 
        But ceramic product makers like Kajaria and rival Somany
Ceramics  SOCE.NS , are dependent on natural gas to power their
tile-manufacturing kilns, and rising prices of the fuel have
eaten into their margins. 
    The company's consolidated cost of raw materials consumed
jumped 19% to 2.59 billion rupees in the fourth quarter, while
consolidated power and fuel costs rose about 6% to 2.41 billion
rupees. 
    Consolidated core profit margins of the company fell to
14.60% in the quarter, from 15.06% a year earlier. 
    The company said its board approved an investment of 36.8
million rupees in Sunsure Solarpark Two Pvt Ltd and increased
investment in unit Kajaria Plywood by 100 million rupees to 700
million rupees. 
    It also declared a final dividend of 3 rupees per share
held.
        Shares of Kajaria Ceramics rose as much as 1.9% after
the results. 
    
($1 = 81.7800 Indian rupees)

 (Reporting by Hritam Mukherjee in Bengaluru; editing by Eileen
Soreng)
 ((Hritam.Mukherjee@thomsonreuters.com; +91 9830427878;))