Business

Multibagger’s midcap stock will pay a dividend tomorrow. Should you invest?

On BSE, KJC shares are settled at 1,179.05 per person reduced 13.85 or 1.16% on Tuesday. Stocks hit an intraday high of 1,192.80 each before adjusting against the backdrop of a broader bear market.

Mid cap company market pricing around Current 18,774.31 crore.

Over the past three months, KJC stock has gained more than 22% on D-Street. Although the annual performance of the stock has many fluctuations. However, in two years, the stock is up nearly 127%. Stocks are close 520 per share on September 14, 2020.

Dividends of Kajaria Ceramics

The company announced a final dividend of the 3 (300%) per share of equity with a par value of Re 1 per share for the year ended 31 March 2022.

On August 31, in its regulatory filing, KJC said, “Final dividend per equity share @ Rs. 3 per Re1 share, as recommended by the Board of Directors, if announced at the AGM, to be paid on or before Saturday, October 22, 2022.”

Shareholders eligible for dividends will be those on the register at the close of business on Friday, September 16, 2022, which will be provided by NSDL and CDSL.

Thereby, the shares will be traded without dividend benefits on September 15.

During fiscal year 22, the company also paid an interim dividend of 8 per share (800%) sums up to 127.34 crore.

Including final dividend of 3 per share, KJC will pay in total 11 dividends for the fiscal year will be summed up to 175.09 crore.

Should you invest in shares of Kajaria Ceramics?

Jefferies in its August 31 note said, “We consider KJC a strong play in home revival/refurbishment. Retain Buy with modified PT’s. 1,400 rolls after. Keep target PE at ~35x. KJC remains one of our Top SMID Picks. “

In the base case, Jefferies has set a target price of 1,400 for the company. The broker’s report in this scenario says, “We are optimistic about the possibility of a housing revival in India, optimizing the mix between KJC (60% of current Value-Added sales) , traction in new margin accumulation products and an upward margin trajectory – resulting in 20% + EPS growth in fiscal year 22-25E.Also, exports of Morbi companies may maintain price stability in the domestic market.”

Meanwhile, in a bullish scenario, Jefferies has set a target price of 2,000 on KJC, the report said, “The ceramic tile industry is invited as one of the main beneficiaries of the GST & E-Way Bill, the unorganized segment accounts for ~60-65% of total production. KJC is the market leader in organized bricks; can help gain traction against peers. Lien India’s entrenched footprint serves as a solid moat.”

Furthermore, in the bearish scenario the target is The Jefferies report said 800 was set, “Increasing competition, especially from unorganized brick players in Morbi, Gujarat, India, has resulted in volume and price pressures. for organized players, putting KJC’s market share at risk.” In addition, difficulties with higher-than-expected input costs (gas prices increased sharply), which may affect gross profit margin. In addition, a slowdown in economic growth and spending and a slowdown in new value-added product launches are among the key risks.

As Jefferies reports, Morbi companies are unlikely to be able to shift most of their production volume to the domestic market – which bodes well for domestic prices and margins – KJC is the market leader . In addition, the increase in Morbi’s price will converge their price difference with those of organized players. In fiscal year 22/25e, the brokerage firm expects KJC to achieve a revenue CAGR of 17% / 22% / NPAT, a CAGR in volume of 13%.

The company manufactures different types of tiles, including kitchen tiles, bathroom tiles, wall tiles, floor tiles, and exterior wall tiles.

Disclaimer: The views and recommendations given above are those of individual analysts or brokerage firms, not those of Mint.

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