KAJARIACER - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.7

📊 Core Financials

• Quarterly PAT rose from ₹99.7 Cr. to ₹121 Cr. (+30% growth).
• ROCE at 16.8% and ROE at 10.8% show moderate efficiency.
• Debt-to-equity ratio at 0.04 indicates a very strong balance sheet.
• Cash flows remain stable, supported by consistent profitability and low leverage.

💹 Valuation Indicators

• P/E Ratio: 50.7 (above industry average of 46.2, suggesting premium valuation).
• P/B Ratio: ~6.0 (CMP ₹1048 / Book Value ₹174).
• PEG Ratio: -6.19 (negative, highlighting weak valuation relative to growth).
• Intrinsic Value: Appears lower than CMP, limited margin of safety.

🏢 Business Model & Competitive Advantage

• India’s largest tile manufacturer with strong brand recognition.
• Extensive distribution network and diversified product portfolio.
• Competitive advantage lies in scale, brand strength, and low debt structure.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive near ₹850–₹950 (closer to 52-week low ₹745).
• Long-Term Holding: Suitable for steady growth investors, but current valuations are stretched.

✅ Positive

• Strong quarterly profit growth (+30%).
• Low debt-to-equity ratio (0.04).
• Market leadership and strong brand presence in tiles.

⚠️ Limitation

• High P/E and P/B ratios indicate overvaluation.
• ROE at 10.8% is modest compared to peers.
• Decline in FII (-0.98%) and DII (-1.39%) holdings.

📉 Company Negative News

• Institutional investors reducing stake, showing cautious sentiment.
• Stock trading below DMA 50 & DMA 200, reflecting short-term weakness.

📈 Company Positive News

• Quarterly PAT surged to ₹121 Cr. from ₹99.7 Cr.
• Strong demand recovery in housing and infrastructure sectors.

🏭 Industry

• Tile industry expanding with urbanization and real estate growth.
• Industry PE at 46.2, reflecting sector-wide premium valuations.

🔎 Conclusion

Kajaria Ceramics shows strong fundamentals with low debt and consistent profit growth. However, valuations are stretched with a high P/E and negative PEG ratio. Entry is advisable closer to ₹850–₹950 for better risk-reward. Long-term investors may hold for steady growth, but near-term upside is limited due to premium valuations.