India's Kajaria Ceramics beats Q1 profit estimates on stronger demand

BENGALURU, July 26 (Reuters) - Indias top tilemaker Kajaria Ceramics (KAJR.NS) reported a better-than-expected first-quarter profit on Wednesday, as sustained demand for home fixtures offset higher costs.

The company said its consolidated net profit rose more than 16% to 1.08 billion rupees ($13.17 million) in the quarter ended June 30.

Analysts on average were expecting a profit of 1.05 billion rupees, according to Refinitiv IBES data.

Demand for tiles and other home fixtures has risen in the country amid increasing purchases by homebuyers and pent-up demand for renovations.

Consolidated revenue from operations for the New Delhi-based firm rose over 5% to 10.64 billion rupees, as sales of its vitrified and ceramic tiles remained robust in the quarter.

The company, earlier in May, had set an expected revenue growth target of 14% to 16% in fiscal 2024.

Total expenses climbed 4.5% to 9.31 billion rupees, with higher purchases of stock-in-trade offsetting the decline in input costs and power and fuel charges.

Falling prices of natural gas aid the margins of ceramic product makers as they are dependent on the fuel to power their tile kilns.

Kajaria Ceramics had said in May that it would not raise prices of its products in the current fiscal due to softer gas prices.

The companys consolidated core profit margins expanded to 15.9% in the quarter, from 15.23% last year.

\“We remain optimistic about the medium to long-term prospects of the real estate sector and our capacity building initiatives,\” Chairman Ashok Kajaria said in a statement.

Kajaria Ceramics shares fell 4.5% on the day, while they are up about 19% for the year so far.

\“The results are in line with expectations,\” said Praveen Sahay, research analyst at brokerage Prabhudas Lilladher, adding shares slipped on profit booking.

($1 = 82.0054 Indian rupees)