Kajaria Ceramics Q2FY26 Concall Decoded: The Great Tile Rebuild 🧱📉➡️📈

1. Opening Hook

For years, Kajaria has been India’s ceramic royalty—shiny tiles, sharper margins, and the Kajaria family smiling from every investor deck like they just redesigned the Taj Mahal. But the last few years were different: soft demand, margin potholes, and a three-division mess where even dealers didn’t know who to call.

So, the Kajaria 2.0 plan began — unify the chaos, fire inefficiencies, and maybe even stop sending three salesmen to the same shop. Q2FY26 was their“we’re cleaning house”quarter. Margins soared, costs shrank, and the old guard officially handed the hammer to Chetan and Rishi Kajaria.

The mission: turn cost-cutting into culture, not crisis.

2. At a Glance

Metric	Q2 FY26	YoY / QoQ	Analysis
Revenue	₹1,186 Cr	+1% YoY	Flattish sales, but smart discipline.
Tile Revenue	₹1,051 Cr	Flat	Demand dull, restructuring in motion.
Bathware	₹102 Cr	+14% YoY	Kerovit shining bright.
Adhesives	₹32 Cr	+78% YoY	Small but growing fast.
EBITDA Margin	17.94%	+447 bps YoY	Multi-quarter high, thank you cost cuts.
PAT	₹133 Cr	+58% YoY	Profit doubled on same sales — rare feat.
Working Capital Days	56	↓ from 58	Inventory tighter than their new dealer policy.
Employee Headcount	↓ by ~250	–	“Right-sizing,” HR’s new favourite word.

3. Management Commentary (Translated from “Corporate” to “Desi”)

“We’re undergoing a cost optimization journey.”(Translation: We’ve started hunting inefficiencies like they’re wild boars.)

“We saved ₹30–35 Cr by reengineering packing boxes.”(Translation: Someone finally told procurement to open Excel.)

“Removed around 250 people.”(Translation: HR department now has shorter lunch queues.)

“We unified sales and dealer networks.”(Translation: Earlier, three Kajaria reps fought over one dealer. Now it’s peaceful—and cheaper.)

“We hired a consultant to map India state by state.”(Translation: McKinsey is making PowerPoints about tiles.)

“Architect and influencer outreach teams added.”(Translation: Even interior designers now get the Kajaria pitch deck.)

“Management skipped salaries this year.”(Translation: ‘We’re all in this together’—literally.)

“No new capacity; focus is on 100% utilization.”(Translation: Let’s sell what’s already burning gas before building more furnaces.)

4. Key Highlights

a. Margin Magic:Despite flattish revenue, EBITDA margin jumped to17.94%— best in many quarters. Driven by raw material re-negotiations, manpower rationalization, and unified purchases.

b. Cost Cuts Done Right:Savings across packing material (₹35 Cr), procurement, and overheads. Even advertisement spends were optimized (“less shouting, more smart buys”).

c. Dealer Network Detox:They’re shutting

weak outlets, adding stronger ones, and giving sales incentives tied togrowth, notattendance.

d. Unification Drive:Kajaria had three verticals—Ceramic, GVT, and PVT—each acting like rival kingdoms. Now, one unified front. Dealers and distributors love it; confusion dropped dramatically.

e. Consultant Playbook:Hired external consultants to identify “white spaces” in distribution. Expect a revamped retail brand architecture—likely under a single name (“Kajaria World” or “Kajaria Galaxy”).

f. Bathware + Adhesives = Rising Stars:Non-tile segments together form ~11% of revenue now, growing >30% YoY. These divisions may drive incremental profitability once tile demand normalizes.

5. Dealer & Market Insights

Dealers are “very happy” post-unification — fewer sales visits, clearer pricing.
Architect outreach just launched — 18–20 specialists on board.
Projects now ~30% of mix; retail still 70%. Builders and government projects getting more attention.
Pricing gap with Morbi remains at~20% premium, justified by brand and service edge.

6. Analyst Q&A (With EduInvesting Commentary)

Q (HDFC Securities):“How much cost-cutting left?”Mgmt:“Savings will continue quarter after quarter.”(→ Translation: We’re still finding fat in the system.)

Q (UBS):“Feedback from

To Read Full 16 Point ArticleBecome a member