Kajaria Ceramics likely to see margin growth of 16% in Q4, says Ashok Kajaria

Kajaria Ceramics last week reported a 24.06 percent increase in consolidated net profit to Rs 65.89 crore for the third quarter ended December 31. Ashok Kajaria, CMD of the company, discussed earnings in an interaction with CNBC-TV18.

Speaking about volume outlook, he said, “At the end of Q2, we said that in the second half we will do 14-15 percent volume growth and we are going to maintain that. Q3 we did about 16 percent and I think we should be above 14-15 percent in Q4. Talking about next year, we are also looking at the scenario where Kajaria should do about 14-15 percent volume growth.”

On the margins front, Kajaria said, “For Q4 we are looking at about 16 percent – what we have said earlier at the end of Q2 that six months will be close to 16 percent which we are hoping to maintain because Q3 has been 15.9 percent. I think looking at Q4, we should do more than 16 percent but as far as new year 2019-2020 is concerned, it will very much depend on how the Brent moves on and the volume growth is positive, things should be positive but as far as the margins are concerned, I would say we will keep Brent or gas prices in mind. So exact number we will not be able to give at this moment but definitely it will be on the positive trend.”

Talking about fuel mix, Kajaria said, “The mix is 75 percent gas and 25 percent coal approximately. Gas prices have marginally come down but not so much because they take a three-months average for Brent. So from March, it should start coming down. Definitely it will have an impact on our margins going forward.”