(Reuters) – India’s Kajaria Ceramics reported a third-quarter profit that missed analysts’ estimates on Tuesday as its margins came under pressure due to soft demand for its tiles in a seasonally weak quarter.
The company’s consolidated net profit dropped more than 25% to 777.4 million rupees (nearly $9 million) in the quarter, falling short of analysts’ average estimate of 1.06 billion rupees, per data compiled by LSEG.
The company’s shares accelerated their marginal decline to as much as 2.7% after the results were released.
Kajaria Ceramics’ revenue from operations rose 1% to 11.64 billion rupees, with the company also flagging lower realizations and persistently weak exports.
The main reason though was a subdued 7% volume growth in a quarter which is seasonally slow for building activities as labor travel home for the many festivals in the period.
Analysts at HDFC Securities and Systematix expected volume growth of 8% and 9%, respectively, and had also flagged increasing competition from unorganized, private players.
Kajaria Ceramics’ core profit margins narrowed to 12.8% from 15.5% a year ago.
The company, however, remains optimistic about demand in the near to medium term, Chairman Ashok Kajaria said in a statement.
($1 = 87.0490 Indian rupees)
(Reporting by Hritam Mukherjee and Manvi Pant; Editing by Savio D’Souza)
