Kajaria Ceramics announces ₹6 per share dividend, PAT drops 39% in Q3
3 min read 28 Jan 2023, 07:28 PM ISTWith a market valuation of ₹17,472.59 Cr, Kajaria Ceramics is a mid-size company that operates in the consumer discretionary industry.
PremiumWith a market valuation of ₹17,472.59 Cr, Kajaria Ceramics is a mid-size company that operates in the consumer discretionary industry. The largest producer of ceramic and vitrified tiles in India is Kajaria. Its eight plants—Sikandrabad in Uttar Pradesh, Gailpur and Malootana in Rajasthan, Vijayawada and Srikalahasti in Andhra Pradesh, Balanagar in Telangana, and two plants in Gujarat—have an annual aggregate capacity of 84.45 million square metres. The company has declared its Q3 results and also a dividend for the financial year 2022-23.
The company said in a stock exchange filing that its Board of Directors has declared “An Interim Dividend of Rs. 6 per share of Re. 1 each for the financial year 2022-23 and Wednesday, February 8, 2023 as the ‘Record Date’ for determining entitlement of members of the Company to the aforesaid Interim Dividend. The payment of the said Interim Dividend will be made on/before February 26, 2023."
The board of Kajaria Ceramics has also granted the go-ahead for an additional acquisition of up to 11,40,968 equity shares worth ₹10 each of Kajaria Vitrified (KVPL), a subsidiary firm, for a total cash payment of ₹1,80,04,475. The company's equity stake in KVPL now stands at 87.37%, and once the planned acquisition is completed, it will climb to 95%.
Kajaria Ceramics also said in a stock exchange filing that its Board has “Approved the modernisation of the manufacturing facility at Gailpur (Rajasthan) for Ceramic Tiles by replacing the existing Kilns with latest model of Kilns having capacity for production of bigger size of ceramic tiles including other latest equipment, as may be required. The said modernisation will involve Rs. 51.11 crores and is expected to be completed by July 2023. The said modernisation will further benefit to the Company by way of saving in cost/energy as well as improved quality including bigger size of ceramic tiles."
Kajaria Ceramics' board has also approved divesting the entire Kajaria’s stake i.e. 1,22,40,000 equity shares of Rs. 10 each in Vennar Ceramics Limited, a subsidiary company in a phased manner, at a consideration of Rs. 18.25 crores. The expected date of completion of sale/disposal is upto March 31, 2024.
On a consolidated basis, Kajaria Ceramics' net profit dropped 39.09% YoY to ₹74.32 crore in Q3FY23 as against ₹122.02 crore recorded in Q3FY22. The revenue from operations for the quarter that ended on December 31, 2022, was ₹1,091.13 crore, a growth of 2.14% from the ₹1,068.23 crore recorded for the same period of the previous year. Profit before tax (PBT) decreased by 37.75 per cent to ₹99.71 crore in the third quarter of FY23 from ₹160.18 crore in the third quarter of FY22. From ₹183.84 crore in Q3 FY22 to ₹133.07 crore in Q3 FY23, EBITDA plummeted by 28% YoY.
Commenting on the Q3 performance, Shri Ashok Kajaria, Chairman & Managing Director said “This quarter has been challenging in terms of performance. The overall volumes were impacted by the prolonged monsoon season and the festive period in the month of October 2022. However, there has been some recovery in demand during November and December, indicating a positive trend going forward. The consolidated revenue for the quarter stood at ₹1091 crores, compared to ₹1068 crores from the corresponding period of the previous year, representing a 2% growth."
He further added that “The EBITDA margin for Q3FY23 was 12.20%, a decline of 500 basis points compared to the same period in the previous year. The primary cause of this decline was disruption in natural gas supply and an unprecedented increase in gas prices. However, fuel cost has started to come down since December 2022, primarily due to the increased use of alternative fuels and some fall in gas prices. The full impact of these changes is expected to be visible by March 2023."
“Overall, the company has seen decent growth in the first nine months, with a 12% increase in volume and a 22% increase in revenue. The company is dedicated to its growth strategy, which includes expanding market share and increasing the number of dealers across India, particularly in unrepresented territories. The company is confident that its strong foundation and commitment to excellence will continue to drive its success in the upcoming quarters, both in terms of sales and profitability," said Shri Ashok Kajaria.
On Friday, the shares of Kajaria Ceramics closed on the NSE at ₹1,098.65 apiece level, up by 4.77% from the previous close of ₹1,048.65.
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