Event Type: The document is a transcript of the Q2 FY27 Investor Conference Call, which was an earnings call and post-results investor interaction.
Date and Time: The conference call was held on October 26, 2026. The specific time and time zone were not mentioned in the provided transcript.
Purpose: The stated purpose of the call was to discuss the company's quarter 2 FY27 earnings.
Earnings Announcement: The call was held after the earnings announcement, as it discusses the quarterly results in detail.
Management Participants: The management participants were Mr. Ashok Kajaria (Chairman), Mr. Chetan Kajaria (Vice Chairman), Mr. Rishi Kajaria (Managing Director), and Mr. Sanjeev Agarwal (Chief Financial Officer). The moderator was Mr. Karan Bhatelia from Asian Market Securities.
Availability of Materials: The audio recording of the call was uploaded to the company's website on October 26, 2026, as per a previous letter. This transcript, dated October 29, 2026, was also uploaded to the company's website (www.kajariaceramics.com) in compliance with SEBI LODR Regulations, 2015.
UPSI Statement: The transcript itself does not contain a specific statement confirming that no Unpublished Price Sensitive Information (UPSI) was shared. The content is a record of the discussion that took place.
Financial Highlights & Strategic Themes
Financial Period Discussed: Q2 FY27 (Quarter ending September 2026) and comparative Q2 FY26 figures.
Consolidated Performance: Revenue grew 24% YoY to INR 1,468 crores. EBITDA margin stood at 19.5%, up from 17.94% YoY. Profit Before Tax (PBT) was INR 254 crores (vs. INR 181 crores YoY). Profit After Tax (PAT) was INR 190 crores (vs. INR 133 crores YoY).
Segment-wise Revenue:
Tiles: Grew 23% YoY to INR 1,291 crores.
Bathware: Grew 22% YoY to INR 124 crores.
Adhesives: Grew 69% YoY to INR 54 crores.
Volume & Realization: Achieved 10% year-on-year volume growth. Price hikes of 12-13% were implemented in North/South plants, and 18-19% in Morbi, in response to rising gas costs.
Working Capital: The capital cycle increased marginally by 2 days to 48 days as of September 30, 2026, due to high turnover.
Forward-Looking Statements & Guidance: Management expressed confidence in sustaining healthy growth and strengthening market position. They guided for double-digit volume growth for the next two quarters (H2 FY27) and into FY28. Value growth in FY28 is expected to be lower than volume growth due to the absence of significant inflation. The focus is on absolute EBITDA growth over margin percentage, with margins expected to remain stable around current levels (~19%).
Strategic Themes: Key themes included gaining market share from the unorganized sector and Morbi players due to a narrowed price gap, ongoing brownfield capacity expansions to reduce outsourcing dependency, and driving growth in bathware and adhesives segments which are expected to be margin and ROC accretive in the future.
Capacity Expansion: Brownfield expansions are on track:
Srikalahasti: Capacity increased from 10 MSM to 12.5 MSM. Capex revised to ~INR 240 crores. Expected commissioning by end of June 2027.
Gailpur: 11 MSM capacity expansion.
These expansions are focused on GVT tiles and are designed for higher efficiency and lower production costs.
Outsourcing Strategy: Current annualized sales volume is ~130 MSM, with ~42 MSM outsourced from Morbi. With new capacities coming online, outsourcing is expected to reduce to ~36-37 MSM in FY28 against a sales target of ~145 MSM.
Market Dynamics: The Morbi cluster is facing challenges with 40-50% of plants reportedly shut down due to high gas prices and weak exports. Industry size estimates are ~INR 60,000 crores (Domestic: ~INR 48,000 cr, Exports: ~INR 12,000 cr). The price gap between Kajaria and Morbi players has reduced from ~40% to 20-25%.
Gas Costs: Average gas cost for Q2 was ~INR 70/SCM (North: ~INR 70.56, South: ~INR 63, West: ~INR 75). Management is working on optimizing firing cycles and sourcing cheaper gas to reduce costs from January 2027 onwards. Propane prices in Morbi have recently increased, narrowing its cost advantage over natural gas.
Other Businesses:
Nepal JV: 5 MSM capacity, running on coal gas. Q2 utilization was 85%. Contributed ~INR 2.5 crores as income from associates.
Bathware: Growth was a 50-50 mix of volume and price. Margins are currently low due to new plant ramp-up but are expected to improve.
Adhesives: Significant growth area. FY27 revenue target is ~INR 240 crores, aiming for ~INR 400 crores in FY28.
Additional Notes Section
Attachments: The transcript was submitted as an enclosure to the stock exchanges. The original audio recording of the call was also uploaded to the company's website.
Financial Data: Extensive financial data for Q2 FY27 was disclosed and discussed during the call, including revenue, EBITDA, PBT, PAT, segment performance, and volume metrics.
Logistical Details: Dial-in numbers and access codes were not included in the provided transcript portion.
