Important update for investors: Kajaria Ceramics has uncovered a financial fraud that will cost the company about INR200 million, but analysts still recommend buying the stock.
Fraud Discovery and Financial Impact
The fraud was carried out by Mr. Dilip Maliwal, the CFO of Kerovit Global, which is a wholly‑owned subsidiary of Kajaria Bathware and a step‑down subsidiary of Kajaria Ceramics. The company estimates the total loss at around INR200 million, and expects to recover roughly half of that amount.
Management’s Response
Management said it has thoroughly reviewed all other subsidiaries and found no irregularities. The leadership reaffirmed its commitment to building a stronger, process‑driven organization and improving internal controls.
Analyst Outlook and Target Price
Despite the loss, the analyst firm retained a BUY rating on Kajaria Ceramics with an unchanged target price of INR1,252. The target is based on a 30x multiple of the projected earnings for September 2027. Key factors that could lift the valuation further include:
- Recovery in tile sales volumes
- Maintaining a high EBITDA margin of 18% or more
What This Means for Retail Investors
The immediate financial hit is limited, and half of the loss is expected to be recovered. If the company can bounce back with strong sales and margins, the stock could see a re‑rating upward.
Remember, this is perspective, not prediction. Do your own research and consider your risk tolerance before making any investment decisions.