Kajaria Ceramics Limited — Q4 FY26 earnings call

Call held 30 Apr 2026

Management summary

Kajaria Ceramics reported strong Q4 FY26 results with 12% revenue growth and significant EBITDA margin expansion to 19.19%, driven by 11% volume growth and cost optimization. Despite production challenges due to Morbi plant shutdowns in March, the company saw demand momentum and expects to benefit from market disruptions. Management is confident in maintaining margins and plans increased ad spend for FY27.

Highlights

  • Consolidated revenue grew 12% YoY to INR1,373 crores in Q4 FY26.

  • EBITDA margin improved to 19.19% in Q4 FY26 from 10.01% in Q4 FY25.

  • PAT increased to INR136 crores in Q4 FY26 from INR43 crores in Q4 FY25.

  • Volume growth of 11% in Q4 FY26, with Jan/Feb showing 8-9% growth before Morbi disruption.

  • Working capital cycle improved by 14 days to 51 days as of March 31, 2026.

Concerns

  • Production fell by 7% in Q4 FY26 due to the shutdown of Morbi plants in March.

  • Significant increase in gas prices, with Morbi players facing 35-40% cost hikes.

  • Uncertainty regarding the full restart and operational capacity of Morbi plants from May 1.

Key financials

  1. Consolidated Revenue ₹1,373 Cr +12%YoY
  2. EBITDA Margin 19.2%
  3. PAT ₹136 Cr
  4. Volume Growth 11%
  5. Working Capital Cycle 51 days

What they filed

Q1 FY27: revenue up 20.4%, net profit up 55.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,179 1,156 1,222 1,103 1,186 +1%1,168 +1%1,373 +12%1,328 +20%
EBITDA156 152 138 187 213 +37%200 +32%263 +91%260 +39%
Net profit86 79 43 110 134 +56%86 +9%157 +265%171 +55%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹1,373 Cr Total
  • Tiles ₹1,212 Cr 88.3%
  • Bathware ₹117 Cr 8.5%
  • Adhesive ₹44 Cr 3.2%

Capital allocation

high confidence
  • M&A Key Investor Stake in Bathware Business Acquisition · Closed · Consideration ₹50 Cr

    Acquisition of entire 15% stake from a key investor, who had invested $10 million 8 years back. Management stated it was a 'better allocation of cash' and 'better way of returning money to the shareholders' (in a broader sense of capital allocation).

    It's for the entire 15% stake. See, they invested $10 million 8 years back. So we bought the entire stake for INR50 crores by mutual discussion and negotiation.

Guidance & targets

Margin

  • EBITDA Margin Margin · Going forward · High confidence 18-19%
    Margin, we are confident that with the current scenario, we should be maintaining between 18% to 19%.

    — Ashok Kajaria

Ad Spend

  • Ad Spend Increase Ad Spend · This year (FY27) · Medium confidence 40-50% higher
    this year, the ad spend may be 40% to 50% may be higher than what we spent in the...

    — Sanjeev Agarwal

Outsourcing

  • Outsourced Volume Outsourcing · This year (FY27) · Medium confidence 40 million plus

    Previously 32 million → 40 million plus

    last year we sold 118 million, produced at about 87, 86 million. And we outsourced about 32 million square meters of tiles. ... this year we have to outsource almost 40 million plus, right?

    — Ashok Kajaria

What to watch in Q1 FY27

Morbi Plant Operational Capacity

Next quarter (Q1 FY27)
Current Many Morbi plants shut down in March, restarting from May 1
Target Number of Morbi plants running and their production volumes

Why it matters

This will determine market supply, competitive intensity, and Kajaria's outsourcing strategy.

Our estimate is not more than 150 to 160 plants ultimately will run from 1st of May.

Risks & concerns

  • Morbi plant shutdowns and production impact

    high

    Production fell by 7% in Q4 due to Morbi plant shutdowns in March, impacting supply and inventory.

    Management acknowledged

  • Gas price volatility and cost escalation

    high

    Gas prices for Morbi players increased from INR47-48 to INR84.50, requiring 35-40% price hikes, creating uncertainty for their operations.

    Management acknowledged

  • Uncertainty of Morbi plant restarts and competitive landscape

    medium

    While gas is available from May 1, it's unclear how many of the 500-600 Morbi plants (estimated 150-160 to run) will actually restart and operate profitably given high gas costs, potentially affecting market supply and competition.

    Management acknowledged

  • Outsourcing supply chain disruption

    medium

    Outsourcing partners may face challenges running plants fully, but Kajaria believes it can manage by diverting to other suppliers or increasing in-house production.

    Management downplayed

Q&A highlights

5 direct
Morbi plant shutdowns and competitive intensity Direct
Out of 500, 600 plants, which people say in the investing community, which I agree, not more than 150 as of today, there are only about 70, 80, 90 plants which are running. And as I said earlier few minutes back that on 4th of May, you will know that how many plants are running. Our estimate is not more than 150 to 160 plants ultimately will run from 1st of May. If they run, there is a big shortage as it is in the domestic market. And why will they export and have this headache, they will rather feed the domestic market because domestic market is imported.

Management provided a detailed outlook on the Morbi market post-shutdown, indicating that many plants might not restart due to high gas prices, which could benefit organized players.

Asked by Sonali Salgaonkar

Impact of price hikes on end-user demand Direct
Not really. I think the demand is there and tile is a very small segment in the entire real estate project. So just for that price increase, they will not stop their construction. So we are looking at a good demand for the year.

Management believes that recent price increases will not significantly impact end-user demand in the construction sector due to tiles being a small component of overall project costs.

Asked by Sneha Talreja

Q1 FY27 outlook and comparison to Q4 FY26 Partial
The momentum has started now and looking good '26-'27 going forward. So we can't break it down quarter-wise, but the good momentum has started now I would say. ... In general, Q1 historically is low in the industry and Kajaria. So Q4 cannot be compared with Q1. But the whole year is going to be much better.

Analysts sought clarity on the sustainability of Q4 momentum into Q1, with management acknowledging historical Q1 weakness but expressing optimism for the full year.

Asked by Keshav Lahoti

Gas price increases and regional variations Direct
So we have taken a price increase of roughly 12% to 13% in our North plants and Morbi has been slightly higher around 16% to 17% because the gas price has gone up much higher there. That's been the region-wise price increase and South is also in the similar lines.

Management detailed the specific price hikes implemented across different regions to offset rising gas costs, indicating a proactive approach to margin protection.

Asked by Keshav Lahoti

Propane availability for Morbi industry Direct
See. There's not enough -- ideally propane is not allowed for the industry. Government of India has issued a circular on 5th of March that propane will not be supplied to industry. It will only be used for domestic LPG production. No industry is getting propane for your information.

This clarifies a key input cost factor for Morbi players, indicating a structural shift away from propane for industrial use, potentially impacting their cost structure.

Asked by Saurabh Jain

Promoter salary reinstatement Direct
So we have decided not to take the salary this year as well.

Management confirmed the deferral of promoter salary reinstatement, which was previously linked to achieving a certain EBITDA run rate, indicating continued prudence.

Asked by Arun Baid

Outsourcing strategy and Morbi supply Partial
It is not that the whole outsourcing will stop. The outsourcing will reduce that too in the initial months. If the Morbi has already started and from 1st of May, more plant will open, they will have to sell. So they will have to sell to Kajaria first. So it is a 1 or 2 months disturbance in the supply. It is not a permanent disturbance because when we are ready, when we are giving assurance, as Chairman sir, has said, if the plants are running who have the brand and who have confirmed order. There can be a situation that we are outsourcing from Morbi's plants. So we will outsource, let's say, from going forward.

Analysts questioned how Kajaria would manage its outsourcing needs given the Morbi disruption, and management explained their strategy to leverage restarting Morbi plants and their own capacity.

Asked by Rahul Agarwal

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance Overview

Kajaria Ceramics delivered a strong Q4 FY26, with consolidated revenue growing 12% year-over-year to INR1,373 crores. The company achieved an 11% volume growth, driven by sales unification efforts and demand momentum observed since January '26. EBITDA margin significantly expanded to 19.19% from 10.01% in Q4 FY25, attributed to cost optimization and improved sales realization. PAT for the quarter surged to INR136 crores from INR43 crores in the prior year.

Morbi Disruption and Market Dynamics

The Morbi region experienced significant disruption in March 2026, leading to a 7% fall in Kajaria's production due to plant shutdowns. Management noted that gas prices for Morbi players increased substantially from INR47-48 to INR84.50, necessitating a 35-40% price hike for their products. While Morbi plants are expected to restart from May 1, Kajaria anticipates that only 150-160 out of 500-600 plants will run, creating a vacuum that organized players like Kajaria can fill.

Gas Price Inflation and Fuel Mix

Gas prices saw a sharp increase, with North region prices at INR55.54 per SCM in Q4 FY26, rising to INR62.5 in April. South and West regions also experienced increases, with April prices at INR81 and INR79 respectively. Kajaria has implemented price increases of 12-13% in North and 16-17% in Morbi to cover these costs. The company utilizes biofuel, which constitutes about 15% of its overall fuel mix, with North plants using up to 30% biofuel in spray dryers, helping to mitigate gas price impact.

Volume Growth and Sales Strategy

The 11% volume growth in Q4 FY26 was a result of efforts towards sales unification, which involved inventory realignment and manpower alignment. Management indicated that volume growth in January and February was already 8-9% before the Morbi disruption. For FY26, overall volume grew 3%. The company expects continued good momentum in FY27, although Q1 is historically a weaker quarter for the industry.

Capital Allocation and Shareholder Value

Kajaria Ceramics acquired the remaining 15% stake in its bathware business for INR50 crores, which was previously held by a key investor. Management stated this was a strategic decision and a 'better allocation of cash' for the company. The working capital cycle improved by 14 days to 51 days as of March 31, 2026, primarily due to decreased inventory and receivables. The company also decided not to reinstate promoter salaries for the current year, demonstrating financial prudence.

Outlook and Strategic Initiatives

Management is confident in maintaining EBITDA margins between 18% to 19% going forward. They anticipate a 'much better' year for FY27, driven by volume growth and price increases. The company plans to increase its ad spend by 40-50% in FY27 compared to FY26 (INR90-100 crores). Kajaria also aims to outsource '40 million plus' square meters of tiles in FY27, up from 32 million in FY26, adapting to the evolving supply landscape post-Morbi disruption.

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