Kajaria Ceramics - Rating: Hold; Target price: Rs330 - Centrum

We expect net sales to increase 19.1% YoY to Rs5.0bn led by 20% YoY increase in sales volume to 13.63msm and 0.6% YoY decline in blended realization to Rs365/sqm.

EBITDA is expected to increase 14% YoY to Rs686mn led by increase in sales volume. Energy cost for the company is expected to increase during the quarter primarily due to rupee depreciation. We have assumed energy cost to be 21.3% of net sales against 21% in Q3FY13.

Adjusted profit is expected to increase 14.9% YoY to Rs287mn. Adjusted PAT margin is expected to be 5.8% against 6% in Q3FY13 and 5.6% in Q2FY14.

Rating and target price change: We have revised our rating on the stock to Hold from Buy earlier considering steep increase of 24% in the stock price in last one month. We have revised our target price to Rs330 (earlier: Rs309) based on 14.3x Dec-15E EPS.

Source : Equity Bulls

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