Key Share Data Kajaria Ceramics Ltd....Kajaria has acquired additional 30% stake in „KajariaFloera Ceramics Pvt Ltd.‟(KFCPL) in September 2018, making it a wholly owned subsidiary

October 31, 2018

Kajaria Ceramics Ltd.

…scaling high

CMP INR 393 Target INR: 504 Result Update – Buy

SKP Securities Ltd www.skpsecurities.com Page 1 of 8

Key Share Data

Face Value (INR) 1.0

Equity Capital (INR Mn) 158.9

Market Cap (INR mn) 62462.6

52 Week High/Low (INR) 764/316

Avg. Daily Volume (BSE) 65,884

BSE Code 500233

NSE Code KAJARIACER

Reuters Code KAJR.NS

Bloomberg Code KJC:IN

Shareholding Pattern (Sept 30, 2018)

48%

10%

24%

0.43%

18%

Promoters

DII

FII

GoI

Public & Others

Particulars FY17 FY18 FY19E FY20E

Net Sales 25,496.3 27,106.0 29,595.0 33,571.5

Growth (%) 5.6% 6.3% 9.2% 13.4%

EBITDA 4,963.3 4,563.5 4,557.6 5,438.6

PAT 2,528.4 2,349.5 2,396.3 2,968.9

Growth (%) 9.3% -7.1% 2.0% 23.9%

EPS (INR) 15.9 14.8 15.1 18.7

BVPS (INR) 73.9 85.0 92.0 100.0

Key Financials (INR Million)

Particulars FY17 FY18 FY19E FY20E

P/E (x) 24.7 26.6 26.1 21.0

P/BVPS (x) 5.3 4.6 4.3 3.9

Mcap/Sales (x) 2.4 2.3 2.1 1.9

EV/EBITDA (x) 12.8 13.8 13.9 11.5

ROCE (%) 30.8% 24.8% 22.1% 25.5%

ROE (%) 21.5% 17.4% 16.4% 18.7%

EBIDTA Mar (%) 19.5% 16.8% 15.4% 16.2%

PAT Mar (%) 9.9% 8.7% 8.1% 8.8%

Debt - Equity (x) 0.1 0.1 0.1 0.1

Key Financials Ratios

Source: Company, SKP Research

Price Performance Kajaria vs BSE 500

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

Oct

-17

No

v-1

7

De

c-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Mar

-18

Ap

r-1

8

May

-18

May

-18

Jun

-18

Jul-

18

Jul-

18

Au

g-1

8

Sep

-18

Sep

-18

Oct

-18

Kajaria BSE 500

Company Background Kajaria Ceramics Limited (Kajaria), promoted by Mr. Ashok Kajaria in 1985, is the largest player in India‟s Ceramic Tiles industry with ~10% market share, under “KAJARIA” brand. It has a combined manufacturing capacity of 68 MSM which includes its own manufacturing facilities in UP & Rajasthan and its JV manufacturing partners. It also sells tiles outsourced from Morbi, Gujarat and manufactures sanitaryware and faucets through JV partners, which provides it strategic product extension opportunities to leverage its channel. Recently, it has announced its entry into another building product - plywood; trading to start with. Investment Rationale Topline to grow at a CAGR of ~11.3% over FY18-20E Despite disruptions witnessed during Q2FY19, Kajaria consolidated net sales went up by

8.1% y-o-y to Rs 7,253.1 mn, driven by sanitaryware segment, which grew by 32% y-o-y, at Rs 434.8 mn. Tiles segment witnessed a moderate 7% y-o-y growth to Rs 6,381.6 mn, on the back of volume growth of 11%. Kerala contributes ~12% volume in tiles segment which was adversely affected because of recent floods. However, management has highlighted that conditions in Kerala have started improving from October 2018. Volumes were also impacted due to a nationwide truckers‟ strike in July 2018. Realizations from tiles segment declined by 3% to Rs 349 per sq. m. (JV realisations declined by 10%). During H1FY19 the overall sales grew by 6.4% y-o-y to Rs 13,823.3 mn.

The contribution from owned, JVs, and outsourced tiles to the total tiles revenues were

~63%, ~23% and ~14% respectively. Going forward, with Kajaria’s focus on value added products, improving conditions

in Kerala, increasing contribution from GVT and PVT segment, coupled with structural shift towards organised players post E-way bill implementation, we expect topline to grow at a CAGR of ~11.3% during FY18-FY20E. Though, slowdown in the real estate industry will continue to add pressure on organized player’s operational performance.

EBIDTA Margins to improve going forward: EBIDTA margins during Q2FY19 declined by 320 bps y-o-y to ~15%, mainly on account of

increase in gas prices on the back of rising crude prices and weakening Rupee. Power & fuel cost as a percentage of sales increased by 440 bps y-o-y to 22.3%, impacting the company by an additional Rs 200 mn during the quarter (Rs 150 mn in Q1FY19). Management believes gas scenario to remain same in H2FY19 as well. Margins declined by 250 bps to 14.1% in H1FY19.

Despite dismal H1FY19 performance, management remains optimistic about demand improvement going forward and expects 14-15% volume growth for H2FY19 on back of launch of new value-added tiles, improvement of conditions in Kerala, and structural shift towards organised players, which are expected to generate traction in the industry. With Kajaria’s focus on superior and value-added products, coupled with price hike taken in July 2018 for ceramic tiles and October 2018 for vitrified tiles, we expect EBITDA margins to improve from 14.9% in H1FY19 to ~16.2% by FY20E.

Expanding capacity of PVT & GVT tiles by 5.6 MSM and 5 MSM respectively: To meet the increased demand for lifestyle consumption products like ceramic tiles,

especially from aspiring mass affluent, Kajaria is expanding capacity of PVT tiles at existing location at Maluthana, Rajasthan, by 5.6 MSM at a capex of ~Rs 800 mn. Plant is expected to get commissioned by FY19E. With this expansion total capacity of the Company at Malutana will increase to 12.1 MSM, from the current 6.5 MSM.

Kajaria has acquired additional 30% stake in „Kajaria Floera Ceramics Pvt Ltd.‟ (KFCPL) in September 2018, making it a wholly owned subsidiary of the Company. KFPCL is setting up a 5 MSM GVT tiles facility, at Andhra Pradesh, with an investment of ~Rs 1 bn. This capacity is expected to get on-stream in FY19E.

VALUATION Better economic growth, leaving more disposable income for discretionary life style

consumption, rapid urbanisation, changing customer preference towards quality branded products particularly amongst the growing mass affluent, increasing nuclear families and Governments‟ thrust on “Housing for All” coupled with strong brand equity and recall and distribution network, augers well for the Company. It has a de-risked growth strategy with an asset light business model, adopting a joint venture route.

Valuations in this industry in general and Kajaria in particular have moderated significantly during CY18. Going forward, we have valued the stock on the basis of P/E - method of relative valuation - of 27x of FY20E earnings, lowering it from 30x (in the previous quarter) due to challenging demand environment. In view of the sharp correction in the share price to Rs 393, after a rally to a 52 week high of Rs 764, we recommend a BUY on the stock with a target price of Rs 504/- (~28% upside) in 15 months.

Analyst: Vineet Agrawal

Tel No: +91-22-49226006;

e-mail: [email protected]



Q2FY19 & H1FY19 Standalone Result Review

(All data in Rs mn unless specified, Y/e March)

Particulars Q2 FY19 Q2FY18 % Change Q1 FY19 % Change H1FY19 H1FY18 % Change

Net Sales 6774.9 6338.4 6.9% 6141.1 10.3% 12916.0 12552.7 2.9%

TOTAL EXPENDITURE 5801.3 5085.4 14.1% 5264.0 10.2% 11065.3 10359.2 6.8%

Raw Material Consumed 1245.3 1390.8 -10.5% 1029.2 21.0% 2274.5 2289.9 -0.7%

% to Sales 18.4% 21.9% -- 16.8% -- 17.6% 18.2% --

Purchase of traded goods 2021.7 1882.7 7.4% 1802.5 12.2% 3824.2 4120.6 -7.2%

% to Sales 29.8% 29.7% -- 29.4% -- 29.6% 32.8% --

Employee Expenses 643.6 642.3 0.2% 677.6 -5.0% 1321.2 1226.4 7.7%

% to Sales 9.5% 10.1% -- 11.0% -- 10.2% 9.8% --

Power & Fuel 1104.9 797.6 38.5% 1043.8 5.9% 2148.7 1543.9 39.2%

% to Sales 16.3% 12.6% -- 17.0% -- 16.6% 12.3% --

Other Expenses 785.8 372.0 111.2% 710.9 10.5% 1496.7 1178.4 27.0%

% to Sales 11.6% 5.9% -- 11.6% -- 11.6% 9.4% --

EBIDTA 973.6 1253.0 -22.3% 877.1 11.0% 1850.7 2193.5 -15.6%

EBIDTA Margin 14.4% 19.8% -- 14.3% -- 14.3% 17.5% --

Depreciation 160.8 151.2 6.3% 160.1 0.4% 320.9 298.5 7.5%

EBIT 812.8 1101.8 -26.2% 717.0 13.4% 1529.8 1895.0 -19.3%

EBIT Margin 12.0% 17.4% -- 11.7% -- 11.8% 15.1% --

Interest 14.8 15.4 -3.9% 10.4 42.3% 25.2 25.2 0.0%

Other Income 83.6 41.2 102.9% 66.8 25.1% 150.4 94.4 59.3%

Exceptional Items 47.8 0.0 -- 0.0 -- 47.8 -36.1 --

Forex Difference 0.0 0.0 -- 0.0 -- 0.0 0.0 --

EBT 929.4 1127.6 -17.6% 773.4 20.2% 1702.8 1928.1 -11.7%

EBT Margin 13.7% 17.8% 12.6% 13.2% 15.4%

Tax 314.1 378.4 -17.0% 268.7 16.9% 582.8 657.5 -11.4%

Extraordinary Items 0.0 0.0 -- 0.0 -- 0.0 0.0 --

Reported Profit After Tax 615.3 749.2 -17.9% 504.7 21.9% 1120.0 1270.6 -11.9%

PAT Margin 9.1% 11.8% -- 8.2% -- 8.7% 10.1% --

Diluted EPS (Rs) 3.9 4.7 -17.9% 3.2 21.4% 7.0 8.0 -11.8%

Source: Company, SKP research



Q2FY19 & H1FY19 Consolidated Result Review

(All data in Rs mn unless specified, Y/e March)

Particulars Q2FY19 Q2FY18 % Change Q1FY19 % Change H1FY19 H1FY18 % Change

Net Sales 7253.1 6712.3 8.1% 6570.2 10.4% 13823.3 12994.0 6.4%

TOTAL EXPENDITURE 6164.0 5492.1 12.2% 5602.1 10.0% 11766.1 10730.7 9.6%

Raw Material Consumed 1781.9 2056.2 -13.3% 1582.9 12.6% 3364.8 3487.8 -3.5%

% to Sales 24.6% 30.6% -- 24.1% -- 24.3% 26.8% --

Purchase of traded goods 898.9 860.5 4.5% 689.0 30.5% 1587.9 1646.7 -3.6%

% to Sales 12.4% 12.8% -- 10.5% -- 11.5% 12.7% --

Employee Expenses 840.7 814.1 3.3% 868.9 -3.2% 1709.6 1579.8 8.2%

% to Sales 11.6% 12.1% -- 13.2% -- 12.4% 12.2% --

Power & Fuel 1617.2 1198.2 35.0% 1539.7 5.0% 3156.9 2463.9 28.1%

% to Sales 22.3% 17.9% -- 23.4% -- 22.8% 19.0% --

Other Expenses 1025.3 563.1 82.1% 921.6 11.3% 1946.9 1552.5 25.4%

% to Sales 14.1% 8.4% -- 14.0% -- 14.1% 11.9% --

EBIDTA 1089.1 1220.2 -10.7% 968.1 12.5% 2057.2 2263.3 -9.1%

EBIDTA Margin 15.0% 18.2% -- 14.7% -- 14.9% 17.4% --

Depreciation 225.3 215.7 4.5% 226.7 -0.6% 452.0 434.1 4.1%

EBIT 863.8 1004.5 -14.0% 741.4 16.5% 1605.2 1829.2 -12.2%

EBIT Margin 11.9% 15.0% -- 11.3% -- 11.6% 14.1% --

Interest 45.2 63.9 -29.3% 41.7 8.4% 86.9 141.9 -38.8%

Other Income 45.9 11.3 306.2% 23.8 92.9% 69.7 39.3 77.4%

Exceptional Items -34.1 0.0 -- 0.0 -- -34.1 7.5 --

Forex Difference 0.0 0.0 -- 0.0 -- 0.0 0.0 --

EBT 830.4 951.9 -12.8% 723.5 14.8% 1553.9 1734.1 -10.4%

EBT Margin 11.4% 14.2% -- 11.0% -- 11.2% 13.3% --

Tax 324.1 382.4 -15.2% 269.8 20.1% 593.9 675.5 -12.1%

Extraordinary Items 0.0 0.0 -- 0.0 -- 0.0 0.0 --

Prior period taxes written bk. 0.0 0.0 -- 0.0 -- 0.0 0.0 --

Minority Interest 4.3 -67.5 -- -2.0 -- 2.3 -88.2 --

Share of Associate Company 0.0 0.0 -- 0.0 -- 0.0 0.0 --

Reported Profit After Tax 502.0 637.0 -21.2% 455.7 10.2% 957.7 1146.8 -16.5%

PAT Margin 6.9% 9.5% -- 6.9% -- 6.9% 8.8% --

Diluted EPS (Rs) 3.2 4.0 -21.3% 2.9 9.8% 6.0 7.2 -16.5%

Source: Company, SKP research



Chart 1: Operating Revenues Chart 2: Volume wise tiles Sales (MSM)

Chart 3: Volume Wise Revenue Contribution Chart 4: Value wise tiles sales

Chart 5: Value wise Revenue Contribution Chart 6: EBIDTA & EBIDTAT Margins

Chart 7: PAT & PAT Margins Chart 8: Debt & D/E

10

16

.36

91

6.7

5

89

2.6

9

85

1.3

0

96

4.0

0

14

21

.10

11

55

.00

75

6.7

0 14

60

.00

13

10

.00

10

66

.83

11

43

.28

17

35

.06

10

86

.80

12

56

.30

11

04

.90

55

0.8

0

59

4.2

0

47

4.2

0

52

4.2

0

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

0

200

400

600

800

1000

1200

1400

1600

1800

2000

FY1

1

FY1

2

FY1

3

FY1

4

FY1

5

FY1

6

FY1

7

FY1

8

FY1

9E

FY2

0E

x

Rs

mn

Long Term Debt (LHS) Short Term Debt (LHS) D/E (RHS)

Source: SKP Research Desk

13

13

0.3

15

83

2.8

18

36

3.1

21

86

8.9

24

13

4.5

25

49

6.3

27

10

6.0

29

59

5.0

33

57

1.5

0

5000

10000

15000

20000

25000

30000

35000

40000

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20E

Ove

rall

Ne

t R

eve

nu

es

(Rs

mn

)

26.9 27.1 27.6 29.3 32.7 37.4 39.8 41.947.0

2.38.2

14.218.5

24.822.2 18.2

20.022.0

10.610.3

10.311.0

7.6 8.1 13.411.8

12.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0


Tiles - Outsourced Tiles - JV Tiles-Own Mfg

68%59%

53% 50% 50% 55% 56% 57% 58%

6% 18% 27% 31%38% 33%

26% 27% 27%

27% 23% 20% 19%12% 12%

19% 16% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Outsourced (%) JV (%) Owned Mfg (%)

20

62

.0

24

46

.5

28

51

.2

35

41

.3

45

74

.6

49

63

.3

45

63

.5

45

57

.6

54

38

.6

15.7%15.5% 15.5%

16.2%

19.0%19.5%

16.8%

15.4%

16.2%

12%

13%

14%

15%

16%

17%

18%

19%

20%

0

1000

2000

3000

4000

5000

6000

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20EEB

IDTA

Mar

gin

(%

)

EB

IDT

A (

Rs

mn

)

80

8.9

10

45

.1

12

42

.2

17

56

.0

23

13

.3

25

28

.4

23

49

.5

23

96

.3

29

68

.9

6.2%6.6% 6.8%

8.0%

9.6% 9.9%

8.7%8.1%

8.8%

0%

2%

4%

6%

8%

10%

12%

0

500

1000

1500

2000

2500

3000

3500


PA

T M

argi

n (

%)

PA

T (

Rs m

n)

7.9 8.9 9.5 10.8 11.9 13.7 15.3 16.7 18.80.6

2.94.8

6.89.0

8.1 6.67.0

7.9

4.6

4.44.0

4.22.5 2.6 3.8

3.9

4.2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0


Tiles - Outsourced Tiles - JV Tiles-Own Mfg

60% 55% 52% 50% 51% 56% 59% 61% 61%

5% 18% 27% 31%38% 33% 26% 25% 26%

35%27% 22% 19%

11% 11% 15% 14% 14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Outsourced (%) JV (%) Owned Mfg (%)



KEY CONCERNS

1. Increase in fuel prices: Increase in gas prices, a key input in this energy intensive industry, poses a threat to business in terms of increase in operating cost. To mitigate this, the Company has increased the proportion of value added tiles in the sales mix. Kajaria has also implemented numerous small and critical process improvements, which optimized consumption of gas, eliminating wastage.

.

2. Extended slowdown in real estate sector may dampen business sentiments: Kajaria‟s tiles and sanitaryware segment is highly dependent on real estate sector. Any extension of slowdown to Tier – II and Tier –III cities may dampen business prospects of Kajaria.

3. Forex Risk: The Company faces foreign exchange risks due to its imports and exports. Any adverse currency fluctuation may pose threat to the profitability of Kajaria.

VALUATION

Better economic growth, leaving more disposable income for discretionary life style consumption,

rapid urbanisation, changing customer preference towards quality branded products particularly amongst the growing mass affluent, increasing nuclear families and Governments‟ thrust on “Housingfor All” coupled with strong brand equity and recall and distribution network, augers well for the company. It has de-risked its growth strategy with an asset light business model, adopting a joint venture route.

Valuations in this industry in general and Kajaria in particular have moderated significantly during CY18. Going forward, we have valued the stock on the basis of P/E - method of relative valuation - of 27x of FY20E earnings, lowering it from 30x (in the previous quarter) due to challenging demand environment. In view of the sharp correction in the share price to Rs 393, after a rally to a 52 week high of Rs 764, we recommend a BUY on the stock with a target price of Rs 504/- (~28% upside) in 15 months.

EBIDTA: One year forward looking P/E band

Source: SKP Research

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

Ap

r-0

8

No

v-0

8

Jun

-09

Jan

-10

Au

g-1

0

Ma

r-11

Oct

-11

Ma

y-1

2

De

c-12

Jul-

13

Feb

-14

Sep

-14

Ap

r-1

5

No

v-1

5

Jun

-16

Jan

-17

Au

g-1

7

Ma

r-18

Oct

-18

Adjusted Price 9 18 27 36 45 54



Consolidated Financials

Exhibit: Income Statement Exhibit: Balance Sheet

Particulars FY17 FY18 FY19E FY20E Particulars FY17 FY18 FY19E FY20E

Total Income 25,496.3 27,106.0 29,595.0 33,571.5 Share Capital 158.9 159.0 159.0 159.0

Growth (%) 5.6% 6.3% 9.2% 13.4% Reserve & Surplus 11,592.3 13,351.2 14,467.3 15,729.3

Expenditure 25,013.2 27,736.9 31,637.0 35,787.2 Shareholders Funds 11,751.2 13,510.1 14,626.2 15,888.3

Material Cost 6,897.6 7,171.2 7,191.6 8,057.2 Total Debt 1,705.8 1,350.9 1,934.2 1,834.2

Pur of Traded Goods 2,296.7 3,432.1 3,610.6 4,028.6 Deferred Tax (Net) 1,106.2 1,098.5 1,098.5 1,098.5

Employee Cost 2,887.1 3,176.6 3,433.0 3,692.9 Minority Interest 760.2 660.9 655.0 648.3

Storage & Spare Parts 0.0 0.0 0.0 0.0 Total Liabilities 15,323.4 16,620.4 18,313.9 19,469.2

Power & Fuel & Othr Exp. 4,480.2 5,194.4 6,599.7 7,654.3 Goodwill on Consolidation 0.00 114.80 114.80 114.80

Other Expenses 8,451.6 8,762.6 10,802.2 12,354.3 Net Block inc. Capital WIP 11855.6 11512.3 12111.4 11388.0

EBITDA 4,963.3 4,563.5 4,557.6 5,438.6 Investments 0.9 4.2 4.2 4.2

Depreciation 813.9 885.3 900.9 923.4 Intangible Assets 0.00 0.00 0.00 0.00

EBIT 4,149.4 3,678.2 3,656.7 4,515.2 Non-Current Asset 120.9 82.4 88.8 100.7

Other Income 153.6 108.4 139.1 134.3 Inventories 3720.2 3784.7 4587.2 4867.9

Interest Expense 340.0 241.0 174.1 161.4 Sundry Debtors 3389.2 4506.7 4439.2 5707.2

Profit Before Tax (PBT) 3,963.0 3,545.6 3,621.7 4,488.1 Cash & Bank Balance 519.6 823.9 1262.1 1772.6

Income Tax 1,424.9 1,267.2 1,231.4 1,526.0 Other Current Assets 578.4 332.0 680.7 772.1

Profit After Tax (PAT) 2,528.4 2,349.5 2,396.3 2,968.9 Loans & Advances 216.5 241.9 266.4 302.1

Growth (%) 9.3% -7.1% 2.0% 23.9% Current Liabilities & Prov 5077.9 4782.5 5240.9 5560.4

Diluted EPS 15.9 14.8 15.1 18.7 Net Current Assets 3346.0 4906.7 5994.7 7861.5

Total Assets 15323.4 16620.4 18313.9 19469.2

Exhibit: Ratio Analysis

Particulars FY17 FY18 FY19E FY20E Particulars FY17 FY18 FY19E FY20E

Profit Before Tax (PBT) 3,963.0 3,553.1 3,621.7 4,488.1 Earning Ratios (%)

Depreciation 813.9 885.3 900.9 923.4 EBIDTA Margin (%) 19.5% 16.8% 15.4% 16.2%

Interest Provided 340.0 241.0 174.1 161.4 PAT Margins (%) 9.9% 8.7% 8.1% 8.8%

Chg. in Working Capital (481.0) (1,009.2) (656.2) (1,368.2) ROCE (%) 30.8% 24.8% 22.1% 25.5%

Direct Taxes Paid (1,289.1) (1,275.1) (1,231.4) (1,526.0) ROE (%) 21.5% 17.4% 16.4% 18.7%

Other Charges 30.0 (12.0) (174.1) (161.4) Per Share Data (INR)

Operating Cash Flows 3,376.8 2,383.1 2,635.0 2,517.3 Diluted EPS 15.9 14.8 15.1 18.7

Capital Expenditure (1,469.5) (1,527.0) (1,500.0) (200.0) Cash EPS (CEPS) 21.0 20.4 20.7 24.5

Investments (0.1) - - - BVPS 73.9 85.0 92.0 100.0

Others 72.5 159.1 - - Valuation Ratios (x)

Investing Cash Flows (1,397.1) (1,367.9) (1,500.0) (200.0) P/E 24.7 26.6 26.1 21.0

Changes in Equity - 5.2 - - Price/BVPS 5.3 4.6 4.3 3.9

Inc / (Dec) in Debt (820.2) 81.2 583.3 (100.0) EV/Sales 2.5 2.3 2.1 1.9

Dividend Paid (inc tax) (491.1) (571.7) (1,280.1) (1,706.8) EV/EBITDA 12.8 13.8 13.9 11.5

Others (367.5) (234.6) - - EV/EBIT 15.3 17.1 17.3 13.8

Financing Cash Flows (1,678.8) (719.9) (696.8) (1,806.8) Balance Sheet Ratios

Chg. in Cash & Cash Eqv 300.9 295.3 438.2 510.5 Debt - Equity 0.1 0.1 0.1 0.1

Opening Cash Balance 215.2 519.6 823.9 1,262.1 Current Ratio 1.7 2.0 2.1 2.4

Diff between B/S and C.flow 3.50 9.00 0.00 0.00 Fixed Asset Turn. Ratios 2.2 2.4 2.4 2.9

Closing Cash Balance 519.6 823.9 1,262.1 1,772.6

Source: Company Data, SKP Research

Exhibit: Cash Flow Statement



Exhibit: Recommendation -History Table Exhibit: Recommendation -History Chart

03-Nov-15 ACCUMULTE 442 466 6% --

28-Jan-16 BUY 477 589 23% 18

03-May-16 ACCUMULTE 531 565 6% --

09-Aug-16 ACCUMULTE 618 677 10% --

24-Oct-16 HOLD 617 646 5% --

27-Jan-17 BUY 582 703 21% 18

24-May-17 ACCUMULTE 667 734 10% --

17-Aug-17 ACCUMULTE 626 687 10% --

06-Nov-17 NEUTRAL 695 -- -- --

09-Feb-18 BUY 615 750 22% 18

16-May-18 BUY 543 701 29% 18

31-Oct-18 BUY 393 504 28% 15

Source: SKP Research; Price adjusted for stock split Source: BSE, SKP Research; Price adjusted for stock split

Period

(months)Date Rating

Adj Issue

Price

Adj Target

Price

Upside

Potential

300

350

400

450

500

550

600

650

700

750

800

03

-No

v-1

5

03

-Jan

-16

03

-Mar

-16

03

-May

-16

03

-Ju

l-1

6

03

-Sep

-16

03

-No

v-1

6

03

-Jan

-17

03

-Mar

-17

03

-May

-17

03

-Ju

l-1

7

03

-Sep

-17

03

-No

v-1

7

03

-Jan

-18

03

-Mar

-18

03

-May

-18

03

-Ju

l-1

8

03

-Sep

-18

Adj Close Price Adj Target Price

Note:

The above analysis and data are based on last available prices and not official closing rates. SKP Research is also available on Bloomberg and Thomson First Call.

DISCLAIMER:

This document has been prepared by SKP Securities Ltd, hereinafter referred to as SKP to provide information about the company(ies)/sector(s), if any, covered in the report and may be distributed by it and/or its affiliates. SKP Securities Ltd., offers broking and depository participant services and is regulated by Securities and Exchange Board of India (SEBI). It also distributes investment products/services like mutual funds, alternative investment funds, bonds, IPOs, etc., renders corporate advisory services and invests its own funds in securities and investment products. We declare that no material disciplinary action has been taken against SKP by any regulatory authority impacting Equity Research Analysis. As a value addition to its clients, it offers its research services and reports in various formats to its clients and prospects. As such, SKP is making these disclosures under SEBI (Research Analysts) Regulations, 2014.

Terms & Conditions and Other Disclosures:

This research report (“Report”) is for the personal information of the selected recipient(s), does not construe to be any investment, legal or taxation advice, is not for public distribution and should not be copied, reproduced or redistributed to any other person or in any form without SKP’s prior permission. The information provided in the Report is from publicly available data, which we believe, are reliable. While reasonable endeavours have been made to present reliable data in the Report so far as it relates to current and historical information, but SKP does not guarantee the accuracy or completeness of the data in the Report. Accordingly, SKP or its promoters, directors, subsidiaries, associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained and views and opinions expressed in this publication. Past performance mentioned in the Report should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment of its original date of publication by SKP and are subject to change without notice. The price, value of and income from any of the securities mentioned in this report can rise or fall. The Report includes analysis and views of individual research analysts (which, hereinafter, includes persons reporting to them) covering this Report. The Report is purely for information purposes. Opinions expressed in the Report are SKP’s or its research analysts’ current opinions as of the date of the Report and may be subject to change from time to time without notice. SKP or any person connected with it does not accept any liability arising from the use of this document. Investors should not solely rely on the information contained in this Report and must make investment decisions based on their own investment objectives, judgment, risk profile and financial position. The recipients of this Report may take professional advice before acting on this information. SKP, along with its affiliates, are engaged in various financial services and so might have financial, businesses or other interest in other entities, including the subject company or its affiliates mentioned in this report, for which it might have received any compensation in the past twelve months. SKP does not provide any merchant banking or



market making service and does not manage public offers. However, SKP encourages independence in preparation of research reports and strives to minimize conflict in preparation of research reports. SKP and its analysts did not receive any compensation or other benefits from the subject company mentioned in the Report or from a third party in connection with preparation of the Report. Accordingly, SKP and its Research Analyst do not have any material conflict of interest at the time of publication of this Report. SKP’s research analysts may provide input into its other business activities. Investors should assume that SKP and/or its affiliates are seeking or will seek business assignments from the company(ies) that are the subject of this material and that the research analysts who are involved in preparing this material may educate investors on investments in such businesses. The research analysts responsible for the preparation of this document may interact with trading desk/sales personnel and other parties for the purpose of gathering, applying and interpreting information. Our research analysts are paid on the profitability of SKP, which may include earnings from business activities for which this Report is being used, but not for the preparation of this report. SKP generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any company(ies) that the analyst covers. Additionally, SKP generally, prohibits its analysts and persons reporting to analysts from serving as an officer, director or advisory board member of any companies that the analyst cover. The following Disclosure of Interest Statement, clarifies it further: SKP and/or its Directors/or its affiliates or its Research Analyst(s) engaged in preparation of this Report or his/her relative (i) do not own 1% or more of the equity securities of the subject company mentioned in the report as of the last day of the month preceding the publication of the research report (ii) do not have any financial interests in the subject company mentioned in this report (iii) do not have any other material conflict of interest at the time of publication of the research report. The distribution of this document in other jurisdictions may be strictly restricted and/ or prohibited by law, and persons into whose possession this document comes should inform themselves about such restriction and/ or prohibition, and observe any such restrictions and/ or prohibition.

SKP Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014 having registration no. INH300002902.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst about the subject securities or issues, which are subject to change without prior notice and does not represent to be an authority on the subject. No part of the compensation of the research analyst was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst in this report. The research analysts, strategists, or research associates principally responsible for preparation of SKP research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

Disclosure of Interest Statement

Analyst ownership of the stock NIL

Served as an officer, director or employee NIL

SKP Securities Ltd

Contacts Research Dealing

Mumbai Kolkata Mumbai Kolkata

Phone 022 4922 6006 033 4007 7000 022 4922 6000 033 4007 7400

Fax 022 4922 6066 033 4007 7007 022 4922 6066 033 4007 7007

E-mail [email protected] [email protected] [email protected]

Member: NSE BSE NSDL CDSL

INB/INF 230707532, NSECDS: NSE230707532, BSE: INB010707538, Depository Participant: IN-DP-155-2015, ARN: 0006

Private Wealth | Broking | Distribution | Institutional Equities | Investment Banking

mailto:[email protected]



Documents

Key Share Data Kajaria Ceramics Ltd....Kajaria has acquired additional 30% stake in „KajariaFloera Ceramics Pvt Ltd.‟(KFCPL) in September 2018, making it a wholly owned subsidiary