Q1 2027 Kajaria Ceramics Ltd Earnings Call Transcript
Key Points
- Consolidated revenue grew 20% YoY to INR1,328 crores, driven by price hikes and volume growth.
- EBITDA margin improved significantly to 19.60% from 16.72% in Q1 FY26, with management guiding for 18-19% for the full year.
- Management provided a confident double-digit volume growth guidance for the next nine months, citing strong demand trends in May, June, and July.
- Bathware (Kerovit) and Adhesives segments showed strong growth, with revenues up 33% and 80% YoY respectively.
- Working capital cycle improved by 5 days to 46 days, reflecting better operational efficiency.
- New capacity expansions at Srikalahasti and Gailpur are expected to be highly cost-efficient, with lower CapEx per unit and higher margins.
- The price gap between Kajaria and Morbi players has narrowed from 40% to below 20%, making branded products more competitive and driving demand.
- April was a soft month due to the Morbi shutdown, pre-buying in March, and labor shortages, impacting Q1 volume growth to only 6%.
- Geopolitical disruptions in the Middle East have led to volatile and higher gas prices, particularly in Morbi, increasing input costs.
- The company faces production constraints this year and will need to rely on outsourcing from Morbi, which may be less profitable.
- Bathware (Kerovit) margins remain under pressure as the division undergoes restructuring, with no margin guidance provided for the year.
- Exports have declined due to the Gulf war, with freight rates rising 1.5-2x, reducing Morbi's export run rate to INR1,000 crores per month.
- Gas price volatility makes it difficult to predict future pricing and margins, with no clear visibility on sustainability of price hikes.
Ladies and gentlemen, good day, and welcome to Kajaria Ceramics Limited Q1 FY27 Earnings Conference Call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Pranav Mehta from Equirus Securities Private Limited. Thank you, and over to you, sir.
Yes. Thank you, Sumit. Good evening, everyone, and thank you for joining this call. From the management side, we have Mr. Ashok Kajaria, Chairman; Mr. Chetan Kajaria, Vice Chairman; Mr. Rishi Kajaria, MD; and Mr. Sanjeev Agarwal, CFO.
I will hand over the call to Mr. Ashok for the initial remarks, post which we will have a question and answer session. Yes sir, over to you.
Thank you, Pranav. Good evening, everyone. It gives me great pleasure to welcome you to the quarter one FY27 Earnings Conference Call of Kajaria Ceramics Limited. Joining me on this conference call is the senior management team of
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