Kajaria Ceramics has reported a dip of 42.26 per cent in its net consolidated profit during the quarter ended September 30, 2022. Its profit after tax (PAT) stood at Rs 68.89 crore in Q2 FY23 as against Rs 119.32 crore it registered in the corresponding quarter of the previous fiscal, the company said in a BSE filing.
The company’s net consolidated income stood at Rs 1,085.39 crore in Q2 FY23, a growth of 10.69 per cent from Rs 980.57 crore it recorded in the similar quarter of the last year.
“Second quarter was one of the toughest quarters in terms of the subdued demand scenario and disruptions in natural gas supply followed by unprecedented increase in gas cost. Nonetheless, recent corrections in price should have a positive impact on margins going forward. The quarter saw flattish volume growth but a decent revenue growth of 11% as compared to Q2 FY22. The tile industry should witness gradual demand pickup post festive seasons due to continued traction in the real estate sector and government’s focus on infrastructure spending in spite of high input costs and increasing interest rates,” said Ashok Kajaria, chairman & MD of the company in the regulatory filing.
The company will invest Rs. 80.58 crore in the expansion-cum-modernization of the manufacturing facility at Sikandrabad, Uttar Pradesh for Glazed Vitrified tiles by increasing 3 MSM per annum, which is expected to be complete by June 2023. Existing capacity of the facility is 8.40 MSM per annum.
On August 31, 2022, the company had acquired 51% equity shares of South Asian Ceramic Tiles (South Asian), Hyderabad at a consideration of Rs 24.51 crore and accordingly, South Asian has become a subsidiary of the company.
During the quarter, the company had subscribed 100% equity shares of Kajaria International DMCC, Dubai for Rs ~10,87,500, making it a wholly-owned subsidiary.
In its faucet plant at Gailpur, the company is adding new capacity of 6 lakh pieces per annum, which will take the total the capacity to 16 lakh pieces per annum. Estimated cost for this expansion is Rs. 5 crore approx. This expansion is expected to be commenced in November 2022.
The board on October 3, 2022, had approved proposal to make investments upto Rs. 125 crore in a company to be incorporated in Nepal, by way of equity and/or loan, for establishing a tile manufacturing facility in Nepal, with annual capacity of 8 MSM p.a., on joint venture basis between the company and various individuals affiliated with Ramesh Corp, Nepal.