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21
Annual Report 2011-12
20 Kajaria Ceramics Limited
PRIDE OF
OWNERSHIP
Tangible value-addition
The Company has grown its business,
profits, profitability, assets, dividend
and market capitalisation through the
following initiatives:
Business growth:
Kajaria grew
business in good markets and bad,
pioneered unique solutions (floor and
façade) and widened its distribution
network. The result is that the
Company enjoys undisputed
leadership and revenue growth, higher
than the industry average. In just the
last three years, the Company added
15 MSM capacity through brownfield
and inorganic initiatives, introduced
new products and added dealers,
catalysing growth.
Kajaria has enhanced shareholder pride in various ways
(
`
in Million)
2009-10
2010-11
2011-12
Net sales
7,355.36
9,523.45
13,113.53
EBIDTA
1,156.72
1,486.14
2,015.77
Profit after tax
358.52
606.62
807.15
Improving profitability:
The Company
pursued value-addition and cost
optimisation. It scaled the value chain
into vitrified and high-end imported
tiles on the one hand and grew
capacities leading to economies of
scale, customer proximity and cost
optimisation on the other. In just the
last three years, expanded distribution
network and acquired manufacturing
capacities in West and South India to
accelerate offtake and reduce logistics
costs.
The result of these initiatives is that
the Company sustained margins under
challenging circumstances even as
competitors encountered a reduction.
2009-10
2010-11
2011-12
ROE (%)
20.40
29.45
32.00
ROCE (%)
16.98
22.28
28.62
Strengthening shareholder funds:
The
Company grew free cash flows through
volume and value-driven initiatives,
maintaining a prudent ratio between
the need to reward shareholders and
make business investments. In just the
last three years, the Company
deployed retained earnings to repay
debt, raise its gross block, enhance
dividend payout and strengthen
investor recall.
2009-10
2010-11
2011-12
Shareholders’ fund (
`
million)
1,893.40
2,225.61
2,818.97
Dividend per share (
`
)
1.00
2.00
2.50
Gross block (
`
million)
5,435.47
6,999.88
7,233.27
Business stability:
The Company’s business model strengthened market
capitalisation and enterprise value.
(
`
in Million)
2009-10
2010-11
2011-12
Market capitalisation
4,529
5,563
12,528
Enterprise value
7,112
8,330
14,886
Outperforming the broader index!
Kajaria’s business strategy was vindicated when it outperformed the broad market index in 2011-12.
Kajaria Ceramics
Apr 2011
76.68%
125.47%
27.88%
-20.91%
Sensex
Jun 2011
Aug 2011
Oct 2011
Dec 2011
Feb 2012
Mar 2012
Intangible value addition
The Company conducted business in
an ethical way.
Top-of-mind:
The Company’s sense of
innovation enhances shareholder pride.
Awards and recognition:
Kajaria is the
only Indian ceramic tile company to be
awarded the ‘Superbrand’ status for six
consecutive years.
Ethical practices:
The Company is
recognised for its ethical practices and
has never been involved in litigations
regarding governance issues.