1. At a Glance
Kajaria Ceramics reported Q1 FY26 revenue of ₹1,104 Cr (1% YoY decline) but surprised with a 21% jump in PAT and margin improvement to 16.7%. The plywood business has been shut, focus is razor sharp on tiles. Still India’s biggest tile slinger and among global top 10. PE? A spicy 56x.
2. Introduction with Hook
If India’s real estate was a movie, Kajaria would be the art director — laying the floors, doing the walls, and occasionally adding a splash of “Italian marble finish” flair.
- World Rank: 8th largest tile maker
- Indian Rank: Boss
But with sales growing slower than a government babu and margins fighting raw material costs, is Kajaria just getting glazed over? Or is this a floor-to-ceiling growth story still in motion?
3. Business Model (WTF Do They Even Do?)
Main business:
- Tiles (88% of revenue): Ceramic wall tiles, floor tiles, vitrified tiles
- Others (12%): Bathware, sanitaryware, adhesives (Plywood exited FY26 Q1)
Sales channels:
- Dealers + Showrooms + Exports
Manufacturing capacity:
Over 80 mn sq. meters across 10 manufacturing plants
USP:
- Premium brand perception
- Wide dealer network
- High-margin product portfolio
4. Financials Overview
FY25 Consolidated Snapshot:
| Metric | Value |
|---|---|
| Sales | ₹4,635 Cr |
| EBITDA | ₹626 Cr |
| Net Profit | ₹300 Cr |
| EPS | ₹18.48 |
| Dividend Payout | 49% |
| ROCE | 17% |
| ROE | 13% |
| Book Value | ₹172 |
| Current Market Cap | ₹19,771 Cr |
| Price-to-Earnings | 56.2x |
5. Valuation
Valuation Methods:
- P/E Method:
Avg Industry P/E ~30x
Fair Price = ₹18.5 EPS × 30 = ₹555 - EV/EBITDA Method:
EBITDA ~₹626 Cr, EV/EBITDA industry avg ~20x
Implied EV = ₹12,520 Cr → FV = ₹780–800 - DCF style sanity check:
With 8–10% earnings growth and 12% cost of capital → FV ~₹850–₹950
EduFair Value Range: ₹750 – ₹950
Current price of ₹1,242 = fully glazed. No floor space left for errors.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Highlights:
- Revenue ₹1,104 Cr (1% YoY drop)
- Net profit ₹110 Cr (up 21%)
- Margins up to 16.7% (thanks to better input cost management)
- Plywood Business? Shut Down
- ESOP Bonanza: 1.35 lakh stock options at ₹800 grant price — bullish from management
- Investor Meet Done: Positive commentary on demand in Tier 2/3 cities
Watch out for:
- Price hikes to offset RM inflation
- Volume recovery post-plywood exit
- Housing uptick from PMAY & urban infra boom
7. Balance Sheet
| FY25 Metrics | Value (₹ Cr) |
|---|---|
| Equity Capital | 16 |
| Reserves | 2,728 |
| Borrowings | 274 |
| Other Liabilities | 738 |
| Total Assets | 3,756 |
| Fixed Assets | 1,717 |
| CWIP | 109 |
| Cash & Other Assets | 1,896 |
Takeaway:
- Low debt
- Strong reserves
- Capex ongoing (CWIP at ₹109 Cr)
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹296 Cr | ₹-182 Cr | ₹-135 Cr | ₹-22 Cr |
| FY24 | ₹602 Cr | ₹-298 Cr | ₹-216 Cr | ₹88 Cr |
| FY25 | ₹501 Cr | ₹-372 Cr | ₹-209 Cr | ₹-80 Cr |
Insight:
- Healthy operational cash
- Consistent reinvestment
- Dividends and capex eating into final cash
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 20% | 21% | 17% |
| ROE | 13% | 14% | 13% |
| OPM | 14% | 15% | 14% |
| D/E | 0.11 | 0.09 | 0.10 |
| Cash Conv. Cycle | 107 | 97 | 97 |
Verdict: Sexy… but not seductive. Slowing ROCE is the red flag on this otherwise clean sheet.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT | EPS |
|---|---|---|---|---|
| FY23 | ₹4,382 Cr | ₹593 Cr | ₹346 Cr | ₹21.64 |
| FY24 | ₹4,578 Cr | ₹698 Cr | ₹432 Cr | ₹26.50 |
| FY25 | ₹4,635 Cr | ₹626 Cr | ₹300 Cr | ₹18.48 |
- Sales growing marginally
- Margins under pressure
- PAT dropped due to one-offs + input costs
11. Peer Comparison
| Company | CMP ₹ | P/E | ROE % | OPM % | Market Cap ₹Cr |
|---|---|---|---|---|---|
| Kajaria Ceramics | 1242 | 56.2 | 12.8 | 14–16 | 19,771 |
| Somany Ceramics | 547 | 37.9 | 7.9 | 8.3 | 2,249 |
| Asian Granito | 59.8 | 42.5 | 1.6 | 4.6 | 877 |
| Orient Bell | 314 | 185 | 0.8 | 4.2 | 461 |
Conclusion:
Kajaria is the premium pick. But its valuation also demands premium execution.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar ‘25 | Jun ‘25 |
|---|---|---|
| Promoters | 47.49% | 47.49% |
| FIIs | 15.79% | 12.55% |
| DIIs | 27.68% | 27.39% |
| Public | 9.06% | 12.57% |
- FII trimming? Yes
- Public interest rising? Yes
- Promoter faith steady? Yep
Also: 93,310 shareholders. A retail fan club with classy bathroom dreams.
13. EduInvesting Verdict™
Kajaria is the godfather of Indian tile mafia — organized, premium, and omnipresent in every middle-class 3BHK dream.
But the stock? Priced like imported Italian marble. At 56x earnings, growth expectations are baked in like Diwali mithai. Any slip, and this floor gets slippery.
Verdict:
Solid fundamentals. Brand leadership. But valuations leave little room for grout mistakes.
Metadata
– Written by EduInvesting Team | July 23, 2025
– Tags: Kajaria Ceramics, Tiles, Housing Play, Bathroom Bling, Ceramics, EduAnalysis
