Kajaria Ceramics Limited (KAJARIACER.NS), India’s largest ceramic and vitrified tile manufacturer, has a market capitalization of approximately ₹140 billion. The company operates nine manufacturing plants across India and Nepal, with a total tile production capacity of 87.80 million square meters (MSM). Kajaria is pursuing a strategic transformation branded “Kajaria 2.0”, emphasizing premium, value-added products, operational consolidation, and sustainable growth.
Shares of Kajaria were trading near ₹900 on Friday, up 0.5% intraday, below the 52-week high of ₹1,320 but above the 52-week low of ₹760, reflecting investor caution amid subdued demand and competitive pressure in the domestic tiles market.
Management Summary and Leadership Changes
Significant senior management transitions are underway:
- Mr. Ram Chandra Rawat, COO (A&T) and Company Secretary, will superannuate on March 31, 2026, also ceasing to be a Key Managerial Personnel and Compliance Officer.
- Mr. Vinit Kumar will assume the roles of General Counsel, Company Secretary, and Compliance Officer from April 1, 2026. He has over 20 years of experience in corporate legal and secretarial compliance, having previously worked at Eicher Motors and Jubilant Life Sciences.
Following these changes, the Operating Committee comprises Chairman Ashok Kajaria, Vice Chairman Chetan Kajaria, MD Rishi Kajaria, CFO Sanjeev Agarwal, and Mr. Vinit Kumar.
Management Views and Market Outlook
Management characterized Q3 FY26 demand as soft, with flat consolidated revenue of ₹1,168 crore, compared with the same quarter last year. Stagnation was due to flat tile volumes and the closure of the plywood division.
Despite these pressures, EBITDA margins expanded to 17.20%, a 442-basis point improvement year-on-year, although sequentially down by 74 basis points due to discounts to reduce SKUs. Leadership remains confident in the Kajaria 2.0 strategy, emphasizing premiumization, operational efficiency, and long-term value creation.
Product and Manufacturing Updates
- Tile Division: At the Gailpur plant, one unit with 9.10 MSM annual capacity was converted from Ceramic Floor Tiles to Glazed Vitrified Tiles (GVT).
- Bathware Division: The Sanitaryware plant in Morbi operates with 12 lakh pieces per annum across two facilities, including the Kerovit Global (KGPL) plant producing high-end products. The Faucet facility in Gailpur produces 1.6 million pieces per year.
- Adhesives: One facility in Gailpur operates with a tile adhesive capacity of 9,000 MT per month, with a new facility under construction in Erode, Tamil Nadu.
The company’s product portfolio is increasingly value-focused, prioritizing premium tiles, adhesives, and bathware solutions.
Mergers, Acquisitions, and Subsidiary Consolidation
The company approved key transactions to consolidate domestic operations:
- Kajaria Adhesive Private Limited (KAPL): Remaining 2,500 equity shares (25%) acquired for ₹25,000, with the unit expanding operations in Erode, Tamil Nadu.
- Kajaria Surfaces Private Limited: Remaining 950,000 equity shares (10%) acquired for up to ₹1.20 crore. This subsidiary operates a tile plant in Morbi.
- Divestments: The plywood business was discontinued due to persistent losses. International showroom operations under Kajaria International DMCC were closed for unprofitability.
These moves aim to simplify the corporate structure, improve operational control, and enhance shareholder value.
Geographical Expansion and Manufacturing Presence
Kajaria maintains a diverse and strategically located manufacturing footprint:
- Northern India: Sikandrabad, UP (8.80 MSM); Gailpur, Rajasthan (35.95 MSM); Malootana, Rajasthan (6.50 MSM)
- Western India: Three plants in Morbi, Gujarat (combined 17.90 MSM)
- Southern India: Srikalahasti, Andhra Pradesh (8.80 MSM); Balanagar, Telangana (4.75 MSM)
- International: 50% JV plant in Nawalparasi, Nepal (5.10 MSM)
This distribution provides market reach across domestic regions and select international markets.
Impact of Government Schemes and Regulatory Changes
The company has been affected by the government’s consolidation of 29 labor laws into four New Labour Codes, effective November 21, 2025. This included the Code on Wages and Code on Social Security, resulting in an exceptional charge of ₹18.30 crore for additional gratuity and compensated leave liabilities.
Kajaria also benefits from government housing initiatives, including Pradhan Mantri Awas Yojana (PMAY) and urban development programs, which support premium tile adoption in residential and institutional construction.
Exceptional Items and Operational Oversight
- Financial Fraud: A ₹20.20 crore embezzlement by the ex-CFO of Kajaria Bathware Private Limited was uncovered at Kerovit Global Private Limited. After recoveries, a net loss of ₹19.36 crore was recorded.
- Loan Impairment: A ₹1.98 crore impairment loss was recognized for loans related to Kajaria UKP Limited, currently under liquidation.
The company’s proactive compliance and legal oversight demonstrate a commitment to corporate governance and risk mitigation.
Competitive Analysis and Credit Ratings
Kajaria retains a dominant position in the Indian ceramic and vitrified tiles market, leveraging scale, distribution, and a diversified product portfolio. While competition from Morbi-based tile manufacturers remains intense, Kajaria’s premium offerings, bathware, and adhesives provide differentiation.
Information on current credit ratings was not disclosed, but the company operates with a net cash balance sheet, supporting investments, expansions, and operational flexibility without significant debt reliance.
Strategic Outlook
Kajaria 2.0 emphasizes:
- Premiumization of core products (tiles, adhesives, bathware)
- Operational consolidation and subsidiary integration
- Selective geographical expansion, especially in tier-2 and tier-3 domestic markets
- Prudent financial governance and risk management
The company is positioned to navigate soft market demand, competitive pressures, and regulatory changes, while sustaining margin expansion and long-term value creation.