KAJARIACERNSEJuly 25, 2025

Kajaria Ceramics Limited

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Management on call

Ashok Kajaria

CHAIRMAN AND MANAGING

Chetan Kajaria

JOINT MANAGING DIRECTOR

Rishi Kajaria

JOINT MANAGING DIRECTOR – KAJARIA CERAMICS LIMITED

Sanjeev Agarwal

CHIEF FINANCIAL OFFICER

Kartik Kajaria

HEAD, ADHESIVES DIVISION – KAJARIA CERAMICS LIMITED

Parveen Gupta

DVP FINANCE – KAJARIA CERAMICS LIMITED

Sneha Talreja

NUVAMA WEALTH MANAGEMENT LIMITED

Key numbers — 40 extracted

INR1,104 crore

overall market demand continued to remain soft. Our consolidated revenue for the quarter stood at INR1,104 crores, indicating a 1% year-to-year decline compared to the corresponding period last year, mainly due

d to remain soft. Our consolidated revenue for the quarter stood at INR1,104 crores, indicating a 1% year-to-year decline compared to the corresponding period last year, mainly due to low growth in

16.72%

sales due to closure of this division. However, the margins have improved in quarter 1 FY'26 to 16.72% as compared to 15% in quarter 1 FY'25. During our last interaction, I had mentioned that we had i

15%

of this division. However, the margins have improved in quarter 1 FY'26 to 16.72% as compared to 15% in quarter 1 FY'25. During our last interaction, I had mentioned that we had initiated certain me

INR4.5 crore

reflects only Bathware revenues on the other segment. So that business looks -- the EBIT is about INR4.5 crores. So some outlook on that? And what is the total savings would you expect from plywood and Bathwa

INR20,000 crore

ink things should be slightly better as we go forward for 2 reasons. One, the export, which was INR20,000 crores in '23-24 has come down to INR16,000 crores in '24-25 because of high freight rates and external

INR16,000 crore

o forward for 2 reasons. One, the export, which was INR20,000 crores in '23-24 has come down to INR16,000 crores in '24-25 because of high freight rates and external circumstances like the problems in Israel,

INR4,500 crore

that. Things are basically getting neutral. So this year, exports for the first 3 months is about INR4,500 crores. And going forward, it seems that the exports will definitely be between INR18,000 crores to INR

INR18,000 crore

is about INR4,500 crores. And going forward, it seems that the exports will definitely be between INR18,000 crores to INR20,000 crores. The moment exports pick up, the domestic market should also improve. I thin

INR75 crore

ncerned, we have 3 divisions right now: Tiles, Bathware and Adhesive also. Adhesive last year did INR75 crores. This year, we are looking at a scenario where it should do about INR120 crores. This Bathware d

INR120 crore

sive last year did INR75 crores. This year, we are looking at a scenario where it should do about INR120 crores. This Bathware division, which did last year about INR400 crores, we are looking at about INR480

INR400 crore

nario where it should do about INR120 crores. This Bathware division, which did last year about INR400 crores, we are looking at about INR480 crores. So this will also generate additional value. And last ye

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Guidance — 20 items

Ashok Kajaria

opening

“It gives me great pleasure to welcome you to the quarter 1 FY'26 earnings conference Call of Kajaria Ceramics Limited.”

Ashok Kajaria

opening

“However, the margins have improved in quarter 1 FY'26 to 16.72% as compared to 15% in quarter 1 FY'25.”

Rahul Agarwal

“And what kind of margins would you expect?”

Rahul Agarwal

“And what is the total savings would you expect from plywood and Bathware being profitable for fiscal '26 as compared to '25?”

Rahul Agarwal

“If you could just highlight that, that will be helpful.”

Ashok Kajaria

“And going forward, it seems that the exports will definitely be between INR18,000 crores to INR20,000 crores.”

Rahul Agarwal

“Is it possible to quantify the plywood loss for last year, which will be saved this year, just to know the change Y-o-Y?”

Ashok Kajaria

“And I think going forward, we'll be a lean and very solid company as we go along.”

Sanjeev Agarwal

“Even the INR4 crores bad debt is there in this quarter will not be there next quarter, but there may be some increase.”

Keshav Lahoti

“And you had a plan to increase this 50% to 51%?”

Risks & concerns — 11 flagged

Our consolidated revenue for the quarter stood at INR1,104 crores, indicating a 1% year-to-year decline compared to the corresponding period last year, mainly due to low growth in tiles volume and decline in ply sales due to closure of this division.

— Ashok Kajaria

Can there be a concern that -- because distributor may be dealing with multiple people, now he's dealing with 1 person.

— Shaleen Kumar

That's a challenge we have taken to ourselves just to show the solidarity and the confidence in the company, plus that we are bent upon to make this is a very lean and thin, and -- see as you say, charity begins at home.

— Sanjeev Agarwal

See, the profitability is difficult to say because the volume is not much.

— Sanjeev Agarwal

But at the external factor, still it's very difficult to comment how things will shape up.

— Ashok Kajaria

See in this quarter, the measures which we are taking, which we intend to take, there is not much impact of those in this quarter as far as cost cutting is concerned.

— Sanjeev Agarwal

So it's difficult to calculate, as we said, because we also might have to reinvest back in the market.

— Rishi Kajaria

So we are doing our work, but it's very difficult to give you the calculated numbers what it will be.

— Rishi Kajaria

And yes, as you said that this year, we might not see a spurt in volumes, but we'll definitely -- we'll have an impact of consolidation and a lot of cost optimization will happen.

— Rishi Kajaria

So those -- the dealers which were under pressure from a single vertical, now they want to grow -- which they always wanted to grow, now getting this opportunity to grow now with this unification.

— Rishi Kajaria

It's very difficult for them to move out of Morbi and expand anywhere in India.

— Ashok Kajaria

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Q&A — 16 exchanges

Sir, basically, 3 questions. Sir, something you want to share on the current trends of the tile market. You didn't touch upon that. I just wanted to know what is the outlook for this year on both on domestic, as well as export market for tiles? That's the first question.

Ashok Kajaria

You can repeat -- you can tell all I will reply. I'll try to reply all together. Okay, sure. Secondly, on the cost side, when I look at your P&L for first quarter, it looks like gross margin expansion has actually flowed through to EBITDA. When I look at staff cost and other expenditure, they are flat Y-o-Y. So all 3 line items on the cost side, I think there is a fair bit of optimization. If you could elaborate a bit more, how do you see the full year in terms of cost? And what kind of margins would you expect? That will be helpful. And thirdly, just wanted to know, based on now the plywood d

Congratulations on a very good set of operating profit and earnings. Sir, I just want to little more understand what you talked about in terms of your strategy of optimizing your marketing. Sir, did I understand clearly that you had earlier different marketing people for different product and now you are bringing them all together under one roof?

Chetan Kajaria

Correct. This is Chetan here. As you said correctly, earlier, we had 3 teams. They were respectively selling ceramic, PVT and GVT tiles, polished and glazed. Now we have started the process of unification, meaning we are combining the teams together under a common head state-wise and getting more cost efficiency out there. And a single guy will go to a dealer and sell all the 3 products in that basket. So dealer doesn't have to deal with 3 people in the long run. He just gives it to one guy who sells the entire product basket when he goes to a shop. So earlier, there were 3 people going to the

So sir, firstly, how is the fuel cost for North-South, the number which you used to give in all the calls? Can you give that?

Ashok Kajaria

Yes, yes. For North, quarter 1 is INR38, for South INR39, for West INR36, average is INR37. Okay. Okay. And the same trend continues now, right? Yes, yes. There's not much change. There's not change. And what was the promoter salary in FY '25 for the whole year? For the full year, it was INR17 crores. You can see that it is around INR4 crores in this quarter. Okay. Got it. And sir, lastly, this Nepal -- hello, am I audible?

Sir, last question. Sir, this Nepal is -- it's a JV. So normally, you combine Nepal volume in the total volume what you show in PPT?

Sanjeev Agarwal

No, we are not combining it because this is 50%, 50%. So we are just adding below the line. Okay. And you had a plan to increase this 50% to 51%? No, we have taken a levelling resolution, but we have not done so. Okay. Understood. So whether this will happen this year? Because once it becomes 51%, then possibly you will plug in the entire volume. It may not come even. Understood. Got it. And Nepal, what would be the sales utilization? We can see from PPT, the production, but the sales and production are broadly in line or possibly sales would be way lower? See, the profitability is difficult t

My first question would be a very naive question, but just wanted to understand a brief idea of the industry dynamics which is shaping up. So we have seen the last 2 years have been very muted in terms of growth for the industry as well? And understanding that part while real estate cycle has been very stable? So what is happening which is not able to grow the industry? Is it about that export has been a decrease, which has been right now getting used in the domestic, which is impacting the margins or the sales growth? Or what is happening in the industry sector?

Ashok Kajaria

See, industry is muted. As you said, real estate is doing well, but real estate is not fully doing well. What was happening a year back is not the position today, number one. And number two, if exports pick up, as I said, partly, they have already started picking up. If they pick up, it will definitely be improved in domestic industry. So I think we can look at the internal factors, which we are working very hard. But at the external factor, still it's very difficult to comment how things will shape up. Right, sir. But just wanted to understand, we are doing everything what we can do in the te

Very heartening to see that the margins have improved solidly in this quarter. Sir, I wanted to understand on the Adhesives business. So how are we seeing things picking up in that segment? And how are we placed in terms of, let's say, the strategic growth that we are targeting in this segment along with what kind of margins we are targeting in this segment, sir?

Chetan Kajaria

You're talking about adhesives, right? Yes, adhesives. Last year, our turnover was INR75 crores. And as the MD said in the beginning of the call, we're looking at INR120 crores plus this financial year. Our EBITDA margin currently is 17%. Now with this unification of division happening, we are looking at a good and positive growth going forward, utilizing the expertise of all our division salespeople. And our -- one plant is already operation in Gailpur, Rajasthan on the 30th of May this year. Another plant is in the pipeline in a place called Erode, which is a couple of hours from Coimbatore

Congratulations to the entire team for the margin performance. My first question is again on the cost reduction measures, right? You spoke about the various initiatives. But if you can help us guide on how to quantify this going ahead in the sense how much has been realized this quarter and how much more scope is left to be gained going ahead, that will be helpful. Basically just to ascertain the sustainable EBITDA margins for the company post these measures?

Sanjeev Agarwal

See in this quarter, the measures which we are taking, which we intend to take, there is not much impact of those in this quarter as far as cost cutting is concerned. So going forward, we'll be taking -- we are working on many issues like we are working on boxes. We have reduced the cost of our packing material. We are looking to reduce -- we are renegotiating our outsourcing material. We are focusing to revisit our raw material prices. All the cost area we are revisiting. All the -- everything is very, very important to us. So the benefit of that will emerge going forward in the coming quarte

Sir, just wanted to ask regarding the management structure. So earlier, if I remember correctly, Chetan sir, used to look at Ceramic Tiles division as well as plywood and Rishi sir, used to look at Bathware and GVT, PVT. Now we are trying to combine ceramic, PVT, GVT and -- I mean, all the Tiles division. So -- and plywood is shut now. So sir, how would the management team -- I mean, how would the promoter look at the business? I mean, who would be managing which division, if you can share?

Ashok Kajaria

See, as far as Tiles division is concerned, now there is no such thing as ceramic, PVT, GVT. It's a unification. Between Chetan and Rishi, they will look after the entire division. And geographically, they will work on divisions, but basically, these 2 are the day-to-day bosses of the division. As far as adhesives is concerned, my grandson, Karthik is looking after that, and he's in charge of that division. As far as Kerovit concerned, Rishi is looking after the Kerovit division. See, the whole tile market has been distributed area-wise, it is not division-wise now. So one person -- Chetanji w

Yes, sir. Just 1, 2 clarification, right? The volume impact, when you're talking about positive or there can be negative volume impact?

Ashok Kajaria

No, no. There will definitely be a positive impact. You see what happened, Shaleen. First quarter, the partly experiment went through because partly was done on 1st week of April, partly was done in mid-May. You will definitely see a volume growth from here on. Exact numbers, we can't decide right now. I can only tell you that it will be a positive growth going forward. I think, Shaleen, your question is because of the unification, the volume will go or down. So my answer and what sir also wants to say that unification is good for volume growth. It will help us to take even better market share

A couple of questions. Sir, first is, in the last quarter, you had indicated rebranding exercise. And I think you had hinted towards what we have announced this particular quarter. But sir, my question is, what is it that prompted us to do this? Like why is it that we are doing now? I think you did thank Sanjeev ji for pushing you on this. But what was the underlying reason why we are doing this particular exercise right now?

Rishi Kajaria

Ritesh, see, earlier, it was required to have different people selling those different tiles to the same dealer. As in the last 2 years, there is so much of product commonality -- the products have become so common that it was not making sense. So finally, after a lot of discussions, internal deliberations, especially, the jhatka (shock) we got from the last quarter, we all really sat down on the table and we discussed what is the way forward. And after a lot of deliberation and all, we took out that the way forward is that we have to unify and we have to optimize our resources. And going forw

Sir if you could highlight some of the regional trends in the demand that you have seen? And also second, on the gross margin, there has been sequential improvement. I understand Q1, if I'm not wrong, is a -- mix-wise, is a better quarter than the rest of the quarter. Is that the case one should think about it? Or is there something which is changing helping you to maintain this kind of gross margin?

Chetan Kajaria

In terms of the first question, regional demand. North accounts for 35% of our sales; for the South, which is 30%, West is 15%; and East is 20%. Tier 1 dealer account for 15% of our sales; Tier 2 and Tier 3, 30% each; and Tier 4 is 15%. So we are seeing a more uptick in Tier 2, Tier 3 cities where people are coming forward and making bigger showrooms also. So that's the regional split of our demand scenario. Question 2, I will let our CFO answer the question. What was the question, about the gross margin? Sir, gross margin, if I look at it, this quarter has been pretty strong. Sequentially, it

Sir, any initiatives also happening on the Bathware side, if you could -- you want to talk about that? How do you look at Bathware profitability going forward? It's going to be a INR500 crores business. And I understand Bathware profitability could be better margin than tiles. So that could easily be like a 15% EBITDA business. Any thoughts on this division, please?

Rishi Kajaria

So Bathware industry right now, we didn't get any demand -- we had a flat quarter in terms of Bathware sales. The losses have gone. But yes, the profits are still to come. I think this year, if we work hard and we get a cheap numbers, the top line which you're looking for, I think the profits will improve. Still our costs are high. I think the more we scale up with the same cost, the margins will improve. We'll not get the desired margin right now. But going forward, as the -- our top line has to increase much more because we already made our base very heavy with all the costs, and we have to

Firstly, we're hearing a lot on Morbi or basically even the listed players taking price increases. Is that really happening on ground, price hikes? And what are the reasons for price hike at this point of time?

Ashok Kajaria

See, they have issued circulars, but it's actually not happening on the ground. So we are waiting for that and watching very carefully because the vision of Kajaria is to take a market share as far as volume is concerned. And as already said in so many words that we are on the cost-cutting drive. At the same time, we want to have better market share. And for market share, you have to have patience. Let not the price increase take place because without that, also the margins are better and take a market share. So that is the mission, not looking at a price increase. And even otherwise, the pric

Praveen Sahay· PL

Sorry, I'm Praveen Sahay from PL. So my question is related to the realization because if I look at on the last several quarters, overall realization is on the correction. And in the same time, if you can give a color. With the correction in the realization, your gross margin has improved significantly for this quarter, 160 basis points on the Y-o-Y side. So how it's -- that's RM cost has significantly... Related to realization, sir. Realization, sir, where you see this realization?

Sanjeev Agarwal

We have already discussed gross margin. Next question, please. We have already said, there is a slight improvement in the realization. We have discussed this. Can we take the last question, please?

So, since we don't have any capex on our cards right now, do we see -- what percentage do we see of our sales coming in from subsidiaries and trading?

Sanjeev Agarwal

Sorry? Coming from subsidiaries and trading? What was the question? How much is the percentage of sales in the subsidiaries. It's given in the presentation. Yes. Going forward, what do we see for FY '26? As we said, we are not going to expand our capacity. So whatever the growth will come, that will come out of the unused inventory, unused capacity utilization. No, we are working on the full utilization. So some growth will come because of the reduction in inventory and when needed from outsourcing. We are not going to put up any capex in this financial year. So the growth comes, this will als

Thank you, Sneha. Very well organized and thank all the participants who have been there, who asked questions or otherwise, and thank you for this conference call. Thanks a lot from the management and on my behalf.

Management

Speaking time

Sanjeev Agarwal

Ashok Kajaria

Moderator

Rishi Kajaria

Shaleen Kumar

Chetan Kajaria

Keshav Lahoti

Ritesh Shah

Girish Choudhary

Rahul Agarwal

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Opening remarks

Sneha Talreja

Thank you, Vishakha. Good evening all. We welcome you to Kajaria Ceramics Q1 FY '26 Conference Call. We are today joined by the senior management of Kajaria Ceramics represented by Mr. Ashok Kajariaji, CMD; Mr. Chetan Kajaria, Joint Managing Director; Mr. Rishi Kajaria, Joint Managing Director; Mr. Kartik Kajaria; Mr. Sanjeev Agarwal, CFO; and Mr. Parveen Gupta, DVP Finance. We will now start with the opening remarks with the management, followed by the Q&A. I will now hand over the call to Mr. Ashok ji for his opening remarks. Over to you, sir.

Ashok Kajaria

Thank you, Sneha. Good evening, everyone. It gives me great pleasure to welcome you to the quarter 1 FY'26 earnings conference Call of Kajaria Ceramics Limited. Joining me on this conference call is the senior management team of Kajaria Ceramics. In quarter 1 F Y'26, overall market demand continued to remain soft. Our consolidated revenue for the quarter stood at INR1,104 crores, indicating a 1% year-to-year decline compared to the corresponding period last year, mainly due to low growth in tiles volume and decline in ply sales due to closure of this division. However, the margins have improved in quarter 1 FY'26 to 16.72% as compared to 15% in quarter 1 FY'25. During our last interaction, I had mentioned that we had initiated certain measures to optimize our sales and marketing resources, but had not detailed the road map. Having covered some ground in implementing our strategy, I would like to take a moment to illustrate our marketing blueprint. When we entered the Vitrified Tile seg

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