Near-term demand worries persist for Kajaria Ceramics

Management and brokerages predict strong recovery in FY25

- RAM PRASAD SAHU

The December-quarter performance of Kajaria Ceramics, the country's largest listed ceramic tile maker, was subdued. Weak domestic demand in the quarter weighed on volumes, while revenues were also below par due to muted realisations.

The stock has fallen 9 percent from its highs this month, given a disappointing Q3 and near-term demand concerns for the rest of FY24.

The company's overall sales volumes at 27 million square metres were 6.4 percent higher year-on-year (Y-oY), while realisations fell by 3 per cent to 374 per square metre.

The demand weakness is an ongoing trend, as volumes and sales for the nine months ended December, at 7 per cent and 4 per cent, respectively, remain on the lower side.

Volumes in Q4 are likely to mirror the year-to-date performance and thus end with growth of 6-7 per cent.

The positive for the sector and the company in the quarter was lower input costs.