Capacity expansions to augment future growth: Motilal Oswal believes Kajaria will increase capacity further to 88.5msm by FY25E. Its sales volume clocked an 11 per cent CAGR over FY10-23, which helped to improve its industry volume share,' Motilal Oswal observed.ģ. Kajaria’s revenue share within the organised listed players increased to 34 per cent in FY22 (36 per cent in nine months of FY23) from 10 per cent in FY20. 'The company reported a 14.4 per cent revenue CAGR over FY10-22 versus 7.5 per cent for the other listed players. Superior growth profile: As per the brokerage firm, Kajaria has delivered stronger growth than its competitors and continued gaining market share in a fragmented industry. The brokerage firm believes Kajaria enjoys a 6 per cent revenue share in total domestic tiles currently.Ģ. Kajaria is primarily focused on domestic markets with a mere about two per cent of its total revenue being generated from outside India. Largest player in the Indian ceramics industry: Motilal Oswal pointed out that the export of tiles from India has clocked a CAGR of 23 per cent over FY18-23 with nearly 17 per cent of domestic production being exported into different countries. Here are the five key factors behind Motila's buy call for the stock:ġ. The company aims to double it in the next 5 to 6 years. In its Q4 and FY23 analyst meet on May 17, Ashok Kajaria, Chairman & Managing Director of the company said in spite of the difficult year, the company sold 101 million square meters of tiles in the financial year 2022-23. The stock is up about 8 per cent for the calendar year 2023 so far against a 2 per cent gain in the benchmark Sensex. 'RoCE (return on capital employed) is projected to be at 23 per cent and 26 per cent in FY24 and FY25, respectively, versus 18 per cent in FY23 (average of 20 per cent over FY18-22),' said Motilal Oswal.

Kajaria turned net cash in FY19 and Motilal Oswal expects it to remain net cash at ₹3.3b in FY25 versus ₹1.8b in FY23 despite higher capex ( ₹6.7 billion over FY24-25).

Kajaria has been generating free cash flow (FCF) since FY16, which, according to Motilal Oswal, is likely to continue going forward.

Download limbo key for free