Updated May 7th, 2024 at 17:28 IST
Kajaria Ceramics faces unexpected profit decline in Q4
Consolidated net profit for Kajaria Ceramics declined by 5.2 per cent year-on-year to Rs 102 crore in the fourth quarter.
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Leading tile manufacturer Kajaria Ceramics reported a surprising drop in fourth-quarter profit on Tuesday, attributed to escalating costs and sluggish demand.
Consolidated net profit for Kajaria Ceramics declined by 5.2 per cent year-on-year to Rs 102 crore in the fourth quarter, contrary to analysts' expectations of a climb to Rs 126 crore.
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Analysts pointed to weak domestic demand for tiles during the January-March period, compounded by the dampening effect of the Red Sea crisis on exports. This downturn follows minimal volume growth in the tiles industry throughout the first three quarters of fiscal 2024.
While sales volume for Kajaria Ceramics increased by 5.5 per cent in January-March, a notable slowdown compared to the 11 per cent rise recorded in the fourth quarter of fiscal 2023 was observed.
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Despite the revenue from operations rising by 3 per cent to Rs 1,241 crore , the company's expenses surged by 4.4 per cent. While analysts had anticipated a decrease in power and fuel costs due to the adoption of cheaper biofuel, additional expenses on merchandise, equipment, and inventory offset these savings.
Chairman Ashok Kajaria expressed optimism regarding the tile industry's demand outlook for fiscal year 2025, citing sustained export momentum and anticipated improvements in off-take driven by robust real estate demand.
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Kajaria Ceramics, India's foremost tile-maker by market value, stands as the first among its peers to report results for the January-March quarter.
(With Reuters inputs)
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Published May 7th, 2024 at 17:28 IST