Kajaria registered healthy growth despite the numerous challenges faced by the domestic tile manufacturers.
Interestingly, the Company has sustained profitable business growth over the last 4-5 years.
In 2013-14, we will not highlight the performance with the previous year, but analyse how Kajaria has created
strong financial statements and multiplied shareholder value in the face of a persistent economic slowdown.
Topline and working capital
Net sales grew by 16.22% over
2012-13; more importantly net sales
grew at 22.56% CAGR (five-year) due
to a value-volumes play marked by a
consumer pull.
Normally, an increase in the scale
of business is accompanied by
an increase in working capital
requirement. For Kajaria, the reverse
transpired; working capital declined
from 80 days of turnover equivalent
in 2009-10 to 32 days in 2012-13
and 25 days in 2013-14 (an industry
benchmark). This was largely due to
a faster product offtake and faster
payments by the dealers. What makes
the working capital reduction even
more interesting is that this transpired
despite a reduction in the creditors’
cycle from 66 days in 2009-10 to 47
days in 2013-14.
The shorter working capital cycle
increased net cash from operations
– at
`
1,661 million in 2013-14, an
increase of 70% over 2012-13.
Analysis
of financial
statements
Net sales
(
`
million)
2009-10
2010-11
2011-12
2012-13
2013-14
7,355
9,523
13,115
15,822
18,387
Working capital cycle
(days)
2009-10
2010-11
2011-12
2012-13
2013-14
80
43
32 32
25
26
Kajaria Ceramics Limited
