Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Kajaria Ceramics Limited (NSE: KAJARIACER) Q4 2026 Earnings Call dated Apr. 30, 2026
Corporate Participants:
Ashok Kajaria — Chairman & Managing Director
Chetan Kajaria — Joint Managing Director
Analysts:
Girish Chaudhary — Analyst
Keshav Lahoti — Analyst
Sneha Talreja — Analyst
Unidentified Participant
Utkarsh Nopany — Analyst
Sonali Salgaonkar — Analyst
Unidentified Participant
Unidentified Participant
Ritesh Shah — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Kajaria Ceramics Q4FY26 earnings conference call hosted by Spark Institutional Equities Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on a touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Girish Chaudhary from Spark Institutional Equities Private Limited. Thank you. And over to you sir.
Girish Chaudhary — Analyst
Yeah. Thanks Yusuf. Good evening everyone. Thanks for joining. We have with us the senior management team of Kajaria Ceramics including Mr. Ashokajaria Chairman, Mr. Chetan Kajaria, Vice Chairman, Mr. Rishi Kajaria, Managing Director, Mr. Karthik Kajaria, VP and Head Adhesive Division, Mr. Sanjeev Agarwal, CFO and Mr. Parveen Guptas, VP Finance. I would request Mr. Kajaria to start with the initial remarks post which we will have a Q and A session. Over to you Ashokji.
Ashok Kajaria — Chairman & Managing Director
Thank you, Girish. Good evening everyone. It gives me great pleasure to welcome you to the quarter four F26 earnings conference call of Kajaria Ceramics Limited. And as already said, joining me on this conference call is a senior management team of Kajaria Ceramics. I am pleased to inform that this quarter we achieved a volume growth of 11%. This is the result of several efforts made towards unification of sales during the first nine months. This unification meant realignment of inventory across channels, manpower alignment and AS resulted into flattish growth after which we experienced good momentum in demand.
Since January 26th which was a result of efforts made by us in the first nine months, the production has fallen by 7% during the quarter due to shutdown of our Broadway plants in March which have since started. From 16th of this month in quarter 4 26, our consolidated revenue increased by 12% to rupees 1373 crores. Compared to the corresponding quarter last year. EBITDA Margin for quarter four stood at 19.19%. Margin improvement is a result of cost optimization and some improvement in sales realization over quarter three.
Along with all round efficiencies in production, sales and supply chain management. I would also like to mention here that there has been a huge destruction at module players in terms of costly uphold labor and cash flow. As a result, Kajal and other players who have multi locational plants will have a great advantage as you go forward and their volumes for the year 2627. For us the journey has just begun and we remain optimistic about the current year’s performance and beyond. Let me share with you some data for the quarter segment 5’s financial performance tile segment grew by 11% year to year at 1 to 12 crores in quarter 4F 26 compared to rupees 188 crores in quarter 4 of 25.
Bar segment registered a 6% growth in revenue reaching 117 crores in quarter 4 compared to 111 crores in quarter 4 25. Revenue from the district grew to 44 crores in quarter 426 as compared to rupees 21 crores in Q4.25. EBITDA improved in quarter 4F 26 to 19.19% as compared to 10.01% in quarter 4.26. PBT the profit before share of profit from JV, external items and tax for the quarter grew to 228 crores in quarter 426 as Compared to rupees 85 crores in quarter 4 25. Pack for the quarter grew by 136 crores in Q4.26 as compared to rupees 43 crores in quarter 425 due to higher volumes and improved realization as of 31st of March 2026 the working capital cycle improved by 14 days to 51 days as compared to 65 days on 31st of December 25th mainly due to decrease in inventory and receivables and we’ll continue to focus on reduction of our working capital cycle as we move forward.
Hello. Hello. Hi, this is Sanjeev Agarwal. I would just like to say that in our presentation in slide number nine the inventory figure has been interchanged to dental independently. We have uploaded the revised presentation to the stock chain and to our website also. So please read Inventory figure as debtors and Debtors figure as inventory. With this I take this opportunity of thanking you all for joining us today. Over to moderator for Q and A updates. Thank you.
Operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead
Questions and Answers:
Keshav Lahoti
Thank you for the opportunity. Congratulation on strong set of numbers. So wanted to get a sense on Q4 growth. One is because of unification and secondly we believe because of this Iran think the MURBI has taken a shutdown possible to bifurcate how much volume growth could be coming because of the Murbi shutdown. And secondly how are the things looking on Q1 side?
Ashok Kajaria
So this volume growth is not because of only the MURBI shutdown in January and February. Also we had a volume growth it was consistently clawed for the four in Jan, Fet and March. And what was your second question please?
Keshav Lahoti
How are the things looking in Q1? Q1 should be stronger than Q4.
Ashok Kajaria
The momentum has started now and you’re looking at a good 26, 27 going forward. So we cannot break it on quarter wise but the good momentum has started now. I would say in general Q1 historically is low in the industry and Kajaria so Q4 cannot be compared with Q1 but the whole year is going to be much better.
Keshav Lahoti
You know I got it. I was asking more on year on year April on April basis. But of the momentum, whatever the double digit volume growth that might be continuing, April also possibly might be at an accelerated pace was my question and my first question was that I understand it’s because of both unification and more B. So I was just trying to ask possible to bifurcate this growth. Just let’s say for example what has been your growth in let’s say Jan and Feb the first two months when we are not seeing the MODI restriction
Ashok Kajaria
As the vice chairman said that this is not the growth is not just because of more B because we have started getting the growth from the month of January itself
Keshav Lahoti
It
Ashok Kajaria
Was Jan 8% 8 to 9% and then it continued March also
Keshav Lahoti
Understood, got it. That is helpful. So what sort of prices you have taken in the market because of inflation in gas prices and how are the gas prices now and in last quarter Q4?
Ashok Kajaria
Can you repeat the question please?
Keshav Lahoti
So my question is what sort of price hike you have taken because of increasing gas prices? What will the gas prices region wise in Q4? And
Ashok Kajaria
So we have taken a price increase of roughly 12 to 13% in our north plants and Murthy has been slightly higher around 16 to 17% because the gas price has gone up much higher there that’s been the region wide price increase and south is also in the similar lines and more or less we have covered the cost of increase of gas and with some added margin but more or Less covered the costs which have gone up.
Keshav Lahoti
The reason why gas prices for Q4 and currently how it shines.
Ashok Kajaria
See there is a varied combination. You see what has happened in the month of March all the plants in Morbi were shut down. So almost there’s no calculation as far as Modi is concerned. Now we have started the Modi plants on 16th of April. As far as the gas prices in north are concerned the government of India made a restriction that you will get for the first few days 80 and 65%. It’s a varied price as you might be aware. So given exact number is difficult to say. But calculated by the prices have gone up quite a bit.
And we have different type of gases. It’s not in in our non moving plants.
Keshav Lahoti
Understood. Thank you so much.
Ashok Kajaria
Thank you. Thank
Operator
You. Next question is from the line of Sneha from Nuama. Please proceed.
Sneha Talreja
Thank you for opportunity and congratulations on great set of numbers. Just continuing with the last participants question. You generally used to give breakup of north, south and west average gas prices. Could you give that to us for Q4?
Ashok Kajaria
So north is actually 55.54 rupees per ATM for quarter four. South was 49.6 and west was 46.57.
Sneha Talreja
And could we have current prices too if possible?
Ashok Kajaria
Yes. April, the price in north is up to 62.5. South is around 81 rupees and west is 79.
Sneha Talreja
Sure. Like the chairman. And you know you have. These are gas prices. Yeah,
Ashok Kajaria
Gas prices, not the complete fuel. Gas prices. Yeah.
Sneha Talreja
Understood. So you. You’re saying that you also have biofuel because of which the average fuel prices must be on the lower side. Is my understanding correct?
Ashok Kajaria
Yeah, correct. Yeah. So average fuel price would be lower than the gas price.
Sneha Talreja
Understood. This is where we would have some advantage versus more B. And what would be the current mix of biofuels? 20, 25 if I’m not wrong.
Ashok Kajaria
You know 15. Not. No, not plant is about 30% for the biofuel. The whole. Yeah, yeah. It has hot plant. Yeah. In there. They are using CO data in south also 25%.
Sneha Talreja
Understood. And secondly sir, in extension to this given there is a steep increase in grass prices and the way we have taken price increases through to manage the margins, any end user demand impact that we are seeing on ground, not just because of the tile size increases. I think we are seeing it across the construction space that we’ve seen sharp increases let’s say in wood, in you know, hrc. I mean across the board. Are you seeing any amount of hit taking Place on the construction sector?
Ashok Kajaria
Not really. I think the demand is there and that is a very small segment in the entire real estate project. So just for that price increase they will not stop their construction. So we are looking at a good demand for the year.
Sneha Talreja
Any guidance that you want to give,
Ashok Kajaria
See guidance. As you are aware I have always given, right. It didn’t work out. So after I give the guidance. So my request would be. My request would be going forward not to give any guidance and be performing and prove to you people that we are doing a good job as a team.
Sneha Talreja
Perfect, sir. Got that on the volume front, anything on the margin front, that margin could stabilize your
Ashok Kajaria
Confidence that with the current scenario we should be maintaining between 18 to 19%.
Sneha Talreja
Perfect, sir. Thanks. Thanks a lot. So I’ll get back in the queue.
Ashok Kajaria
Thank you.
Operator
Thank you. Next question is from the line of Praveen Sahai from PL Capital. Please go ahead.
Unidentified Participant
Yeah. Thank you for opportunity and many conversations on good set of numbers. My first question is related to the fuel. As the you had given that the fuel prices has increased in all the three locations. But if I look at your fuel expenditures as a percentage of sales has been down. So is that the impact has not reflected in the Q4 or the price hike which you had highlighted Already taken. You know that’s the impact as well.
Ashok Kajaria
So we took a price hike in early March.
Unidentified Participant
Okay. So
Ashok Kajaria
That is resulted in the. Like your question was fuel prices down in the Q4?
Unidentified Participant
Yeah. Fuel prices as a percentage of sales has been down. So it
Ashok Kajaria
Is because of the lower production. We produce less.7%. We sold more and we are comparing the percentage on sales. So sale is higher and production is less. Sale is higher by 10, 11%, 12% and production is down by 7%. So as a percentage the fuel price have gone down. In fact actually the price per square meter has gone up.
Unidentified Participant
Right, Got it. Because you are seeing
Ashok Kajaria
Absolute number
Unidentified Participant
Correct sir. Second thing, on the price hike, as you said that early March you had taken the price hike. So in the coming quarters of this quarter Q1 we will see the entire benefit of a 12 to 15% of increase in the prices in our realization.
Ashok Kajaria
We should. We should. We should see that there is some increase in the price realization.
Utkarsh Nopany
We cannot quantify any number because it’s a very dynamic situation. So we have taken the price. We might have to give some discount as well. Absolutely.
Ashok Kajaria
Like in project we might be a little more flexible in terms of our pricing. So.
Utkarsh Nopany
But one thing is that the prices will be much higher than
Ashok Kajaria
The what realization Will be much better.
Unidentified Participant
Right? Right. And last question sir. Because were we yet to fully resume or you know, come to the force so such benefit what he had received in the Q4 in terms of the volume growth we can see in the coming like this quarter and the coming quarter till the MURBI is not coming back with the fully production.
Ashok Kajaria
No, from 1st of May now Murray is also starting their production. GRPC is giving gas to whoever wants to take it in Murray. So that quarter four scenario is not there anymore. Now gas available to anyone who can take it and produce and sell. That is the current scenario going forward from May 1st onwards. You see, two things are happening. One minute, one minute. Let me explain to you two things are happening. For the first time in last five years the gas prices are going up like this. The gas prices which was 47 or 48 rupees landed is as of today is 84 rupees and 50 PASA landed for the model players which includes the tax which includes the calorific value equalization Point number one point number two for the extra price you have to give a bender into uspc.
Third point when it comes to pricing, you have to select these prices. Morbi has, as we are all aware, Morbi has always reduced the prices. Reduce the prices. First time they have to take a 35 to 40% hike. A product like 4ft by 2ft which are selling at 20 rupees square feet has to be sold at anywhere between 27 to 28 because that is the impact of gas. So how can they sell cheaper? Now they are not sure whether they can sell at these prices. So as of today nobody knows how many plants will run how many plants should be able to run properly.
The plants which will run properly are one who has created a brand in Morbi There are a few players, I would say 10, 12 players who have created a brand for themselves. Yes. And secondly, who are outsourcing for organized players or some other players who have backup demand. Yes, I will produce and they will buy. Besides that there is a lot of question. Lot of questions should be answered on Monday 4 because first, second, third is a holiday from people are expecting to start. But Monday you will know how many players started the plant.
So that would be my answer to that.
Unidentified Participant
Thank you so much sir. And that’s really helpful to understand the current situation. All the best,
Operator
Thank you. Before we move to the next question, a reminder to the participants to ask a question. You may press star and one next question is from the line of Sonali Salgaonkar From Jefferies, India. Please proceed.
Sonali Salgaonkar
So thank you for the opportunity and congratulations on a good set of numbers. So my first question is your production. I was just trying to align the numbers. The production is done by about 70%. Sales is up by 12%. Is it fair to assume and interpret that there was a lot of finished good inventory lying with you earlier, which was ready, which you sold off in March and going forward with that inventory liquidation behind us, our sales would be more in line with our production. Is that the right way to look at it?
Ashok Kajaria
You’re right. First, inventory has gone down. Because of this, the shutdown of Modi, our inventory has gone down. Secondly, going forward, currently all our plants are running at full production. So with a combination of our own plants running at full production and our stocks, we will service all the sales orders.
Keshav Lahoti
And outsourcing.
Ashok Kajaria
And outsourcing as well. Outsourcing still is a little problem because as we just said that a lot of plants are still shut down. But we have enough stocks and
Unidentified Participant
Our plants are at full capacity to service the market. To do our numbers,
Sonali Salgaonkar
What is the current capacity utilization of our plant? If you could please dissect that at the outsourcing in Murbi and in the other regions. And how much percent of our supply is coming from
Ashok Kajaria
Production will be as Rishi said just now, from 16th of April, all the plants are in full capacity. But today, as Kajaria, we’re outsourcing to the extent of almost 27, 28% of the materials from Modi. Now there is a question mark. Get in the month of April. And April was of course tough, but how much we get in May, things could get normal as we go forward. But right now that’s a question mark. Because many plants, as I just said, even as before, are not running because they are not running for a simple reason.
The gas they got started getting gas is only from 16th of April and then again from 1st of May for the people who have not started the plants yet. So as we go forward, we know, but our plants are running full. And as rightly said by Rishi, our stocks have come down by almost 1 1/2 million square meters in the month of March itself because the Morbi plants were shut down and we sold more. So that’s how we have stocks have come down. And we also realized better cash flow because of tightening up the notes.
Sonali Salgaonkar
Very clear. And just one last question from my end experts definitely Gulf accounts for about 25. Your line
Ashok Kajaria
Is not clear. Sorry,
Sonali Salgaonkar
Sorry. Is this better now, sir? Apologies. Is this better?
Ashok Kajaria
Yes,
Sonali Salgaonkar
So on the exports we understand Kadaria doesn’t export but Murby used to export about 25 of its. So with that getting impacted do you foresee more competition once the Modi starts producing from the 1st of May? And also we understand that they have taken price hikes. But with us taking about 15% price hike do you think that the competition could be more from more B in the domestic market?
Ashok Kajaria
I think you did hear sonaliji. I said two things. One, they have taken a price hike of 35 to 40% for a simple reason. That’s an impact of gas only. I am not talking about other inputs like packing and all that. But just the impact of gas is roughly about 35 to 40%. Number one. Number two, as the plants were closed the question of export doesn’t even arise. Because in the month of April the exports has hardly been 4 to 500 crores. Why? I give you two reasons. One, the plants didn’t run. Secondly, lot of exports to Gulf are a give you a small example.
Before the war on 28th of February that the freight was $300 for UAE. Today the freight for UAE is almost $4,000. So how can they export and how will they the buyer will get. So these are the chart which are helping the industry.
Sonali Salgaonkar
Sorry, my question was that once more B starts producing from 1st of May. And I agree with you that the exports are definitely impacted. Would that increase the competitive intensity in the domestic market? That was my question.
Ashok Kajaria
That is what I said earlier. Out of 500, 600 plants which people say in the investing community, which I agree, not more than 150 as of today there are only about 70, 80, 90 plants which are running. And as I said earlier a few minutes back that on 4th of May you will know that how many plants are running. Our estimate is not more than 150 to 160 plants ultimately will run from 1st of May. If they run there is a big shortage as it is in the domestic market. And why will they export and have this headache?
They will rather feed the domestic market. Because domestic market is important. Coming to competition there is already a big vacuum. If you go to Morbi today we will find many plants don’t even have a single box. Everything has been sold. And that’s a. That’s a scenario which has been told to us by people. Sir, we have no material because what the dealer said them during the month of March who were buying from Orbi. They told them yeah, I give you money of the past. I give you money of the Present.
Give me whatever you have at gold prices. So they have cleared their stocks in totality. So it’s a very very positive scenario for the so called organized players who have multi locational plants going forward for the whole of 2016.
Sonali Salgaonkar
Got it? Very clear. Thank you and all the best.
Ashok Kajaria
Thank you.
Operator
Thank you. Next question is from the line of Rahul Agarwal from ikea. Sh. Please go ahead.
Unidentified Participant
Hi sir. Gary. Good evening and congratulations for a very good number. Firstly, on the part where side this 50 crore buyout of the PE investor, is it for the entire 15% stake or is it lower?
Ashok Kajaria
It’s for the entire 15% stake. They invested. They invested $10 million eight years back. So we bought the entire stake for 50 crore by mutual discussion and negotiation.
Unidentified Participant
Got it? Sanjuji, the second question on the cost side, you obviously mentioned that 18 19% EBITDA margin is achievable next year.
Keshav Lahoti
But
Unidentified Participant
When I look at, you know, this year there’ve been a lot of cost saving efforts which you have made the staff cost of 550 crores. For fiscal 26, the number looks like stabilized at 130 crores per quarter. How should we look at this cost going forward for the other expenditure and staff cost?
Utkarsh Nopany
Sorry, what was your question?
Unidentified Participant
I’ll just repeat myself. My question was that this year it was a restructuring year for Kajaria. You’ve done a lot of effort on the cost side. For fiscal 26. The staff cost is now stabilized at 530 crores which is 130 crores a quarter. And other operating expenditure also come down substantially to 480 crores. Right? If this is the base for fourth quarter run rate, how should we look at fiscal 27 on expenditure side
Ashok Kajaria
In the similar grounds? We are not looking at. See similar. You see, you have not calculated one thing for the year 2526 in volume way. Overall volume we grew at 3%. We are talking about a much positive growth going forward. As we have seen in the quarter four at 11, we are saying that it will be much better growth as we do it. Because we are not giving any numbers numbers as I said. But will do much, much better as we go forward. Number one. Number two, some cost increase will be there of course.
Because when you start a new year, some cost increase will be very marginal. It will be very marginal and it will be much more nullified by the volume growth which will happen. And the price increase which has taken place from 1st of April. Because actual price, 2nd price increase only came from 1st of April. Absolute number. There could be some increase in. Mainly in. In case of labor and all. But in terms of as said, as a percentage of sale it will be lower cost. Administrative cost as a percentage of sale will go down.
Will go down. Will go down.
Unidentified Participant
Very clear, sir. And last question sir. When I look at the production, you know are my senses for Kadaria in house Production is about 60, 65 million square meters. And please correct me if I’m wrong and when I
Ashok Kajaria
It is 84 million square meters. 87. 87. 87. You can complete your question?
Unidentified Participant
Yeah, so I was actually breaking it down into three parts. Own capacities, joint venture and outsourcing. I was looking at own capacity and joint venture is about 89 MSM. I agree with you, 87 million. The question I’m asking is the fourth quarter when I look at production looks like the JV production obviously is declined purely because of some, you know, cash supply issues in Murbi going forward.
Ashok Kajaria
Don’t forget that happened only in the month of March. Murray has been also normal.
Unidentified Participant
Yes sir. Yes, sir. So just from 16th of April when you’re saying that gas is available for all of our plants, should I assume it is also for our outsourcing partners and joint venture plants put together? Absolutely.
Ashok Kajaria
Absolutely yes. Outsourcing still joint venture partners? Yes, outsourcing. Outsourcing partners is a question because we are not completely outsourcing 100% from each of the outsourcing partners. They are bank some percentage of our sales. So if they can’t run the plant fully on their own, then they will not produce just for us a small percentage of the sales. So that’s the question as we go forward. We will get to know more about it as the event unfolds.
Unidentified Participant
Got it sir. Because that is almost 30 million square meters we have sold from outsourcing partners last year. So that will all get compensated from your in house production from JVs and own plants. Is that correct?
Ashok Kajaria
It is not that the whole outsourcing will stop. The outsourcing will reduce that too. In initial month if the MURBY has already started and from from 1st of May more plant will open. They will have to sell. So they will have to sell to Kajeria first. So it is a. It is a one or two month disturbance in the. In the supply. It is not a permanent disturbance. Because when we are ready, when we are giving assurance, as chairman has said, if the plants are running, who have the brand and who have confirmed order if I there can be situation that we have, we are outputting from 20 plants.
So we may output let’s say from 12 plants going forward. You see, last year we sold 118 million produced at about 87, 86 million. And we outsourced about 32 million square meters of tiles. As Sanjeev was just saying, suppose A doesn’t run during time with B. The question is very simple. Material availability is not a problem for Kajali has to outsource. This year we have to outsource almost 40 million plus. Right. So we’ll outsource from a if not ABC as planned. Move on. This program is limited to probably for the month of April and May.
As things normal people will come forward to our this thing and say so why don’t you buy from us? So outsourcing will not be a problem in terms of square meters Initially yeah, initially it’s a problem. Going forward will not be a problem because we’ll be realigning our suppliers.
Unidentified Participant
Got it sir. Got it. Very clear sir. Thank you so much and wish you all the best for fiscal 27.
Operator
Thank you. Next question is from the line of Ritesh Shah from Investech. Please proceed.
Ritesh Shah
Hi sir, a couple of questions. Sir first is if you could please help clarify. Sir will meet an increase of 35%. I think you said 20 rupees and then 27 rupees. But sir, you also said initially that 16 to 17% price increase invest and ours will be in similar lines. So I just wanted to understand the timelines for both the numbers.
Ashok Kajaria
You see what you have not understood. Morbi per se was selling a product let’s say 20 rupees a square feet. That’s a 4ft by 2ft type, right? Today as far as they are concerned their costs have gone up by 35% because of increased price of gas. So. So their price have gone up from 20 to 27 or 28 depending on the customer. As far as Kajeri is concerned I was already selling at a higher price. So my price increase is only 15, 16% which covers the cost of that and this thing. So that is what the scenario is.
If somebody supplies you from he was earlier supplying you at 20 rupees. Today they supply you. You are the minimum price of 27, 20 maybe 29 rupees also square feet. So their cost Is escalation is 35 to 45%. There are two things. One, if the Modi price is cheaper so and our prices the branded pair prices are higher. So the same cost will be less. Same amount of increase will be higher percentage for more B and less percentage for Kajaria number one.
Keshav Lahoti
And going forward the difference will be minimized
Ashok Kajaria
Number. Number two. Number two. Our not not gas prices have gone up much higher than the non. You see whatever we outsource. He’s talking about that the. The. Our prices are already higher when we were selling. So the difference will minimize
Unidentified Participant
Percentage increase.
Ashok Kajaria
As Rishi said earlier 16 they are increasing by 35, 40. So that difference will minimize our price Cost will not go so much compared to. Because I’m already
Ritesh Shah
Correct. Another clarification sir. That 47 rupees currently somewhere at 84 rupees. And in our case you indicated Q4 was 46.57. And April you said was 79. So how should we look at the 79 and 84 like 79 was gas
Ashok Kajaria
Plants are not 79. Then you work out yourself.
Ritesh Shah
In
Ashok Kajaria
North we are getting gas from Yale India limited And we are getting three types of gas. That’s rlng then the head rehab and the JCC format of India has already described the formula that you will get 80% of normal and 20% of spot price. They started with that on 9th of March. Then they reduce it to 65. Then 50 again they brought it back to 65. As of today it is 80%. 80% is a normal. 20% is small price. As far as south is concerned for Southeast Asia we are in the same formula for Kalashi. Last year last month we paid a higher price because we had no contact of spot price.
We have from 1st of May we get a normal price. We have entered into long term contract with. So that’s a scenario. Is that clear now or you would like. Yes,
Ritesh Shah
I have some Probably I’ll call Sanjivji after the call. Sir, my second question was how much is the inventory that we have in million square meter Is it closer to 1820
Ashok Kajaria
Inventory inventory would be about 11. 11 island. 11 million square meters total
Ritesh Shah
11 million square meters. Okay. And sir, how much would the. Hello. And sir, how much would be the inventory at the JV partner levels or outsourcing partners. I’m just trying to understand that we have significant advantage not only because of size location but also that the inventory that we have at our hand which could also be low cost inventory. So
Ashok Kajaria
There is no low cost inventory. Because the prices have already gone up from March April. So there cannot be low cost inventory is a normal what is being produced is being sold. So what this you said earlier we have inventory. Whatever inventory is there it is okay. Because our plants are going with food capacity. There is a problem in what we were outsourcing. In outsourcing Last year we outsourced to the extent of 32 million square meter. This year will be outsourced to the extent of 40 million square meters.
As things normalize, we’ll get materials from the outsourcing. And as I said, if it doesn’t A doesn’t start, we will start. C will start. They will come to us simple.
Ritesh Shah
Correct. Correct.
Ashok Kajaria
It is not that we or somebody else’s inventory of one month or two months in Morbi. For your information, they have cleaned up the whole act. There is no material. They have sold everything.
Ritesh Shah
Correct. Wonderful. Wonderful. And sir, lastly, any specific reason for the buyback decision at this point in time? How should we read into it?
Ashok Kajaria
So that’s more to the buyback decision is more to give us the marketer confidence that we are very confident of good numbers going forward. We feel that we’re going to do well and it’s a better allocation of buyback was not tax efficient. So this from this time it has become more efficient. So this is a better way of returning money to the shareholder. So one, we were having enough cash on the balance sheet which is much more sufficient than our CapEx. And two, it is tax efficient to the shareholder.
Three, it will improve our roe also. This
Ritesh Shah
Is very helpful. Yeah, understood. Thank you. Thank you so much. Thank you for the answers.
Operator
Thank you. Next question is from the line of Utkarsh Nopani from Anandrati. Please proceed.
Utkarsh Nopany
Yeah. Hi sir. So my first question is regarding the tiles production. So if we see it has gone down by seven and a half percent in March quarter. But you have mentioned that all of our plants are currently operating at full capacity. So just wanted to confirm from you that whether our tiles production volume is not likely to get impacted in Q1 as we had seen in Q4.
Ashok Kajaria
So the tile production was down by 7% in March. In March quarter. But because March the plant shut in more B plants now much lower. Now as I said, From 16th April all the plants are running at full capacity. Even the Murby plants.
Utkarsh Nopany
Okay. Also so like on a y o y basis we can see some bit of a decline in our production in the current June quarter. Is it correct sir? Because we have started the plant on 16th of April.
Unidentified Participant
Correct. Correct.
Utkarsh Nopany
Okay. And the second thing sir, like you have mentioned that many plants in Morbi are still shut. So whether our understanding is correct that also sales volume for us might get impacted in in the current June quarter. But. But it will go back to the normal level as things Normalizes in Morvi.
Unidentified Participant
You’re absolutely correct. Absolutely correct.
Utkarsh Nopany
Okay. And sir, I heard things I like just wanted your sense. Like our ties sales volume has grown at only say 6% CAGR over the say last 7 year period. So what would be your guidance on the volume growth say over the next three to five years for Kajarian? Yeah.
Keshav Lahoti
I think our chairman has already said about this and we will not say overlay.
Utkarsh Nopany
I did not get you sir. Like when you have said. Can you please repeat once again.
Ashok Kajaria
I already said the earlier years it didn’t work out for various reasons because we have no control over the outside atmosphere. We have a control over what we are doing but we don’t have the control over the outside atmosphere. So keeping in line we have decided not to give any volume guidance. Number one. Number two, we will perform as we move along in a positive manner. That’s all at this stage.
Utkarsh Nopany
Okay. And sir, lastly like on the fuel side sir, you have mentioned that our gas procurement cost in north is around say 62 rupees versus say around 80 rupees for west and south. So just wanted to know what is the reason that our gas procurement cost is so low in north compared to the south and the west region.
Ashok Kajaria
I think you didn’t hear one of the earliest speakers asked this question. I answered again I repeat for the benefit of everybody. Government of India has set a certain formula. They have made Gail as a noodle agency online from N that you will you will coordinate for the entire gas pipeline because of this war. Now what they have done as per government guideline, whatever you have lifted in the last six months you will get 80. They started off with 80% and normal prices. 20% export prices got reduced to 65, then to 50, again raised to 65 and again to 80.
As of this morning we are getting a north plant gas sector. 80% at normal price and 20% at spot price. As far as South Asia is concerned we are getting in the same formula because they are the CGT company there is going by this in Kalasi. We are getting gas from Think Gas and we have no such agreement for the month of April. So we have to pay spot prices. We have just entered to an agreement two days back and we will get at normal prices in sync as from 1st of May. So that’s a scenario Morbi scenario.
You are already aware so I don’t have to talk about it. So it’s a very fluctuating, fluctuating thing. If I tell you no, I am getting this because every day the Norms are changing my government of India and according to my guest. So whatever it is, we share the formula if required. So you can let us work out and deliver
Utkarsh Nopany
If you can just throw some light. How is the supply of propane at the moment in Modi in comparison to the January
Ashok Kajaria
Propane is not allowed for the industry. Government of India has issued a circular on 5th of March that propane will not be supplied to industry. It will only be used for domestic and PV production. No industry is getting for your information.
Chetan Kajaria
Okay, thanks a lot sir.
Ashok Kajaria
Thank you.
Operator
Thank you participants. To join the question queue you may press star and one next question is from the line of Saurabh Jain from hsbc. Please proceed.
Unidentified Participant
Thank you for the opportunity and congratulations for a great set of numbers. I just wanted to continue from the previous question on propane. So why do you understand that in the recent times the propane is not allowed but when the expectations are that the Murabi is going to get back the production life, what is your sense? Is it going to be like a permanent shift to natural gas and propane not being allowed to Murbi even for the long term? Is that a circular shift that you are assuming or when things normalize then they might get that and shift back to propane.
Ashok Kajaria
See, how can we say that right now about propane. Also the propane price is 160 rupees and it depends on the what situation. So right now household cooking and fertilizer are more the priority sector for the government to give propane to. So this is a very fluid subject which we cannot comment upon because the price was a very high of propane.
Unidentified Participant
I wanted to get a sense because you are there closer to the industry. What is the inner circles indicating? Like government is serious about making a permanent shift to natural gas or things can go back to propane in the long term Point of view is what I’m asking
Ashok Kajaria
Neither for you nor for us to decide. It all depends on the what’s the situation, what is happening? Government’s first priority to give is to give LPG to domestic number one which you are also aware. We are also aware. Second priority is to give to fertilizer because that’s an area they can’t afford to this thing. I just give you a small information the fertilizer prices. There is a shortage of fertilizers in India. Shortage of fertilizer in India and the fertilizer is being sold at 100 prevail and the import of fertilizer which is coming is at double the price of Indian Production.
So that is why the priority of the government is to make sure. Third priority, as you know earlier was power. Industry was coming. Later they are not giving any gas to the power industry. They said, no, I can’t give you gas. Industry has been put on a priority number three. And when I say industry means all industry.
Unidentified Participant
Sure. My second question is on the biofuel thing that you mentioned. Is it possible to share what could be the comparable biofuel cost for you on a per SEM basis?
Ashok Kajaria
Biofuel cost varies, but I can share you the northern flags. The biofuel cost is about 20 rupees per SEM comparatively. And in south they’re using coal and Morbi, they’re using coal because in. In what do you call this, You cannot use coal. So that is why we had an option to use biogas
Unidentified Participant
Which the
Ashok Kajaria
Government didn’t allow.
Unidentified Participant
But it looks like a very good arbitrage now. You know, getting biofuel at 20.
Ashok Kajaria
Let me tell you little bit about the ceramic tile plant. Dry plant consists of two major facilities. One is called a sprayed air, One is called a kiln. Kiln can only be run on gas, natural gas or propane or lpg, which is gas as far as sprayed air is concerned. It can be run on biofuel, it can be run on coal, it can be done on gas. So we can only use biofuel in spade air. And that is why when we give you this information that 30% of the fuel today is biofuel which is used in the spray there in northern part of India.
Unidentified Participant
Okay, so you are related to the fact that it cannot be taken more than 30% as overall fuel mix. Yeah, sure. I appreciate it. And this was trying to confirm it. Secondly, a lot of other players would also be like trying to secure this biofuel because it is coming at a lower cost. And also, you know, the crop has also recently happened for mustard. Are you seeing any challenges in terms of, you know, procuring this material for
Ashok Kajaria
Only two plants? The only two plants in north are Somali and Orient. They are already using it. And as far as mustard is concerned, there is no challenge in the maximum production of mustard is in the state of Rajasthan and plenty of mustard is available.
Unidentified Participant
Got it. Second question, can you also give us some sense on how the growth trends are looking like in the month of April?
Ashok Kajaria
As we said earlier, we cannot give you month to month. First, our CFO already said that upreach in quarter is normally weak. So please try to understand two things. One, the Mormi plants are not Producing at full capacity. Rishi just said that from 16th of April all Kajeria plants are running at full capacity. Whatever we lose in production for 15 days in Mormi plants has to be taken taken into account. Mode outsourced plants are not running in full capacity. They will run as and when they are comfortable.
Chetan also said that right now say from certain plant we are buying only 20% the capacity. He cannot run 80% unless he has a source to sell. So that scenario will always be there. We cannot do tell you what is happening in quarter one and on a daily basis what we have said. We are looking at a very positive growth. And not only we at Kajaria. I also said in my Upra Jamaha organized players like Kajaria, Somani and Johnson who have plants all over the country will get get benefited by this process.
Because there is a too much damage in Modi. Please understand that and get all the information. You will have a lot of information when you go out there that there are a lot of damage. Nobody knows at this stage.
Chetan Kajaria
So
Ashok Kajaria
Thank you so much in all the way. Thank you sir.
Operator
Thank you. Next question is from the line of Arun Bed from ICICI Securities. Please go ahead.
Chetan Kajaria
Hi sir. Congratulations on a good set of numbers. So just how much was the ad spend this year in FY26?
Ashok Kajaria
It was around I think 9200 crores whole last year we did it less as compared to the previous year because we did very hard negotiation and some this year we are going to do much much higher AD spend. Our new TVC has come. So we are just in the process of making plan on many, many many channels, all regional channels and others. So this year the ad spend maybe 40 to 50% may be higher than what we spend on in the regard much to the rest of
Girish Chaudhary
That spend this year.
Chetan Kajaria
And second thing is you know the salary hikes which last year was not given to employees as you mentioned this year have we taken any decision there?
Ashok Kajaria
Some action will be taken but we are yet to take a call. But some action will definitely be taken in a positive manner. Because we are all part of the industry. We understand they also understand that you as the industry making money. So we have to take a balanced call as we go.
Chetan Kajaria
Okay. And so third thing is in last year Q1 call, Q1 FY26 we had mentioned that once we reached a run rate of 250crores a quarter on the EBITDA front with thousand crore visibility the salaries will be reinstated for the promoters. So anything there you can help us with.
Unidentified Participant
So we have decided not to take the salary this year as well.
Chetan Kajaria
Okay, so sir means it’s postponed till next year basically whatever the numbers for this year, right?
Ashok Kajaria
He did not say postpone for the next year. He said he will not take this year.
Chetan Kajaria
Okay, fair enough. Thank you very much. Thank you.
Operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for the closing comments.
Ashok Kajaria
Oh, thanks a lot. I think very good questions came out and on behalf of all of us but also I would like to add one or two statements. I think great effort has been done by Chetan and as a team after unification, I think they have done a lot of work in the last financial year along supported by Karthik and Adesef. I must say that it’s been a tremendous effort by these three people in taking the company to this heights and I am very positive that going forward the results will be even better. A lot of good questions came and we are trying to do our best to reply them in the right way.
Unidentified Participant
And also just to apply
Ashok Kajaria
To you guys, we have kept a lot of good senior people in the company. A new Chro has joined, a Chief Marketing officer joined for the entire branding of the company. A new Chief Digital officer has joined to take over the technology part of the company. Even for Kerouit Keruvit as a brand has been struggling for a while, so. But there also we’ve got a couple of very senior people. A chief business officer to look after the sales, an advisor who’s handling the factory, both veterans of the industry.
We’ve also got a senior purchase guy. So we’ve kept a lot of good people and I think that is the reason which we are so confident that going forward because ultimately the team has to work. We’re very confident that going forward we’ll achieve what we want to achieve. A good strong leadership team is in place now going forward. Thank you. Thank you.
Operator
Thank you sir. On behalf of Spark Institutional Equities Private Limited. That concludes this conference. Thank you all for joining us and you may now disconnect your lines.
Ashok Kajaria
Thank you. Thank you.