Hold Kajaria Ceramics\, target price Rs 530: ICICI Securities

ICICI Securities has given hold rating to Kajaria Ceramics with a target price of Rs 530. The share price moved down by 1.85 per cent from its previous close of Rs 520.25. The stock’s last traded price is Rs 510.65.
Kajaria Ceramics Ltd., incorporated in the year 1985, is a Mid Cap company (having a market cap of Rs 8086.15 Crore) operating in Building Materials sector.

Financials
For the quarter ended 30-06-2020, the company has reported a Consolidated sales of Rs 277.56 Crore, down -57.43 % from last quarter Sales of Rs 652.04 Crore and down -60.35 % from last year same quarter Sales of Rs 699.99 Crore. The Company reported net profit after tax of Rs -32.94 Crore in latest quarter.

Investment Rationale
The brokerage expects KJC to see significant improvement in FCF over the next two years driven by muted capex and better profitability over FY20E-FY22E. This is expected to drive RoCEs higher to 17.8% by FY22E.

Promoter/FII Holdings
Promoters held 47.6 per cent stake in the company as of June 30, 2020, while FIIs held 15.7 per cent, DIIs 16.6 per cent and public and others 13.2 per cent.