Key Financial Performance - Q1 FY27

  • Consolidated revenue grew 20% year-on-year to ₹1,328 crores compared to corresponding quarter last year
  • EBITDA margin for the quarter stood at 19.60%
  • Volume growth of 6% year-to-year despite soft April month
  • Price increases implemented due to fuel cost impact were the main driver of revenue growth

Management Guidance and Outlook

  • Management confident of double-digit volume growth for the next 9 months of FY27
  • Expects ₹1,000+ crore EBITDA for full year FY27
  • Targets EBITDA margin of 18-19% for entire FY27
  • Bathware division (Kerovit) expected to achieve 35-40% value growth in FY27

Capacity Expansion Plans

  • Brownfield expansion of 10 million square meters at Srikalahasti manufacturing facility (announced last quarter)
  • Additional 11 million square meters capacity at Gailpur, Rajasthan facility
  • Total capex of approximately ₹400 crores for FY27, including both expansion projects
  • Srikalahasti expansion cost: ₹210 crores
  • Gailpur expansion cost: ₹165 crores
  • Renewable acquisition: ₹12 crores
  • New plants expected to be operational by April 2027

Fuel Cost Impact and Pricing Strategy

  • Significant gas price increases post-February 28 war event
  • Morbi gas prices increased from ₹48 to ₹86-88 per SCM
  • North region price hike approximately 10-12%
  • Morbi manufacturing cost increased 40-45%
  • Price differential between Kajaria and Morbi products reduced from 40% to below 20%
  • Average fuel price for quarter: ₹71 per SCM
  • Regional fuel prices: West (Morbi) ~₹85, South ~₹72-73, North ~₹64
  • Spot gas price: ~₹85
  • Pricing varies by geography, not uniform pan-India

Business Segments and Performance

Tiles Business:

  • Sold 118 million square meters of tiles in previous year
  • Targeting 130 million square meters for FY27
  • Export contribution less than 1% of overall turnover
  • Outsourcing currently at 29-30%, targeting 40% in next 12 months
  • Geographical revenue split: North 35%, South 30%, East 20%, West 15%
  • Customer segmentation: Tier 1/Metro 15%, Tier 1&2 30% each, Tier 3 15%

Bathware Business (Kerovit):

  • Acquired remaining 15% stake from Aravali Investment Holdings
  • Hired new Chief Business Officer in April 2026
  • Currently undergoing restructuring and corrections
  • Margin guidance not provided for FY27, expected to be "tough year"

Market Dynamics and Demand Environment

  • April was soft due to three factors: Morbi manufacturing shutdown (March 5-April 15), dealer pre-buying in March anticipating price hikes, and labor shortage due to elections and LPG shortage
  • Demand recovery seen in May, June, and July
  • Company focusing on both retail distribution and institutional projects
  • Major breakthroughs achieved with two large Indian builders
  • 1,800 total dealers with 450 exclusive dealers
  • Targeting additional 100 dealers with 50 exclusive
  • 24-25 experience centers across major towns, adding 1-2 annually

Operational Strategy

  • Organizational unification completed in April 2025 combining three verticals (ceramics, polished vitrified tiles, glazed vitrified tiles) into one
  • Resulted in leaner organization and cost reductions
  • Volume growth acceleration seen in Q4 previous year (11% growth)
  • New plants feature latest technology with 340-meter kilns (vs. previous 200-meter)
  • Lower capex intensity: ₹165 crores for 11 MSM vs. ₹150 crores for 5 MSM previously
  • Higher turnover expected: ₹400-450 crores from new plants

Management Remuneration

  • Promoters confirmed they will not take salary for FY27 financial year