Kajaria Ceramics Ltd (KAJARIACER) Q1 FY27 Earnings Call: Guides ~20% Revenue Growth, EBITDA Margin Expands to 19.6%

Kajaria Ceramics Ltd held its Q1 FY27 earnings call on July 31, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Broad-Based Growth Across Segments

• Rs.1,328 Cr consolidated revenue — up 20% YoY in Q1 FY 2026-2027, driven by selling price increases from fuel impact.
• Tile segment revenue of Rs.1,162 Cr — grew 18% YoY; Bathware (Kerovit) reached Rs.122 Cr (+33% YoY); Adhesives doubled to Rs.45 Cr from Rs.25 Cr.
• EBITDA margin expanded to 19.60% — vs 16.72% in Q1 FY 2025-2026, reflecting pricing discipline and operating leverage.
• PAT of Rs.169 Cr — up from Rs.109 Cr in the year-ago quarter, a 55% YoY jump.
• Volume growth of 6% YoY — despite a soft April; May and June saw recovery, and July 2026 continued positively.
• Working capital cycle improved 5 days — to 46 days as of 30 Jun 2026.

Double-Digit Volume Trajectory for FY 2026-2027

• Double-digit volume growth guided for remaining 9 months — management expects the full-year volume to accelerate after Q1's 6% base.
• Tile sales target of 130 million sqm for FY 2026-2027 — up from ~118 million sqm in FY 2025-2026; in-house capacity remains flat this fiscal.
• Revenue growth of ~20% for FY 2026-2027 — driven by ~10% volume and ~10% value (realization), matching analyst assumptions.
• EBITDA target of Rs.1,000+ Cr (ex-other income) for FY 2026-2027 — margin guided at 18–19%; Q1 already delivered 19.6%.
• Bathware guidance of 35–40% value growth for FY 2026-2027 — Q1 delivered ~33%; management declined FY27 margin guidance for the division.
• Management cited a "major breakthrough with two of the very, very big builders of India" — as a key project lever for institutional demand.

Gas Volatility Drives Price Hikes; Margin Maintained

• Morbi gas price surged to Rs.86-88/scm in Q1 FY 2026-2027 — vs Rs.48 earlier, due to supply constraints; Kajaria's North/South plants saw 10-12% hikes.
• Blended average gas price of Rs.71/scm for Q1 FY 2026-2027 — North Rs.64, South Rs.72-73, West (Morbi) Rs.85; management declined to provide forward guidance due to volatility.
• Kajaria raised own-plant prices 10-11% in Q1 FY 2026-2027 — overall realization up 11% YoY and QoQ, partly from fuel-cost-driven increases in Apr–May.
• Price differential with Morbi narrowed from ~40% to below 20% — as of Q1 FY 2026-2027, shifting demand from unbranded products to branded players.
• Blended 13-14% cumulative price hikes since Russia-Ukraine war began — non-Morbi plant increases of ~10% seen as sustainable; Morbi prices fluctuate with market.

Rs.400 Cr Capex in FY27; 22m sqm New Capacity by Q1 FY28

• Total capex of ~Rs.400 Cr for FY 2026-2027 — includes Srikalahasti (Rs.210 Cr), Bhiwadi (Rs.165 Cr), Gailpur expansion (Rs.165 Cr), and renewable acquisition (Rs.12 Cr).
• New capacity of 22 million sqm to come in Q1 FY 2027-2028 — Srikalahasti (10m), Bhiwadi (11m), Gailpur (11m, already approved, partially overlapping); Bhiwadi completes by Apr 2027.
• Technology upgrade drives cost efficiency — new kilns 340m (vs earlier 200m); 11m sqm now costs Rs.165 Cr vs earlier 5m sqm for Rs.150 Cr.
• Outsourcing ratio targeted at ~40% over next 12 months (by mid-CY 2027) — currently 29-30%; incremental FY27 demand met through outsourcing due to production constraints.
• In-house capacity not increasing in FY 2026-2027 — management emphasized that new lines in FY28 will "drastically reduce dependence on Morbi outsourcing."

Bathware Accelerates; Dealer Network Expanding

• Bathware (Kerovit) Q1 value growth of ~33% — split ~15-16% price and rest volume; full-year FY27 guidance of 35-40% value growth; improved performance expected in FY 2027-2028 after restructuring with new CBO.
• Adhesives revenue doubled to Rs.45 Cr in Q1 FY 2026-2027 — from Rs.25 Cr in Q1 FY 2025-2026.
• Geographic revenue split: North 35%, South 30%, East 20%, West 15% — by city tier: metro 15%, Tier 1 15%, Tier 1&2 each 30%, Tier 3 ~15%.
• Adding 100 dealers in FY 2026-2027 — 50 exclusive; total dealer count from ~1,800 (450 exclusive).
• Exports contributed less than 1% of turnover — management stated no plans to pursue the export market; focus remains domestic.
• Institutional vs retail mix at 2:1 — project business gaining share.

Demand Recovery Underway; Gas Volatility Key Risk

• Demand soft in April — due to Morbi shutdown (5 Mar to mid-April), pre-buying ahead of price hikes, and labor shortage from elections; recovered strongly in May and June; July 2026 continues positive.
• Management expects next three years (FY 2026-2027 to FY 2028-2029) to be "very positive" — underpinned by leaner structure from organisational unification and new capacity.
• Gas market volatility remains a risk — management cited Morbi's single-supplier (GSPC) vulnerability vs Kajaria's diversified supply from GAIL and CGD companies.
• Management did not explicitly confirm a Rs.6,000 Cr top-line target — referenced in social media, but expressed confidence from current trends.
• Promoters forgoing salary for FY 2026-2027 — signaling alignment with shareholder interests.