Kajaria Ceramics Limited (NSE: KAJARIACER) Q4 2025 Earnings Call dated May. 06, 2025
Corporate Participants:
Unidentified Speaker
Ashok Kajaria — Chairman & Managing Director
Rishi Kajaria — Joint Managing Director
Kartik Kajaria — Finance team
Sanjeev Agarwal — Chief Financial Officer
Parveen Gupta — DVP Finance
Analysts:
Unidentified Participant
Pranav Meheta — Analyst
Rahul Agarwal — Analyst
Sonali Salgaonkar — Analyst
Sejal Gupta — Analyst
Sneha Talreja — Analyst
Hrishikesh Bhagat — Analyst
Keshav Lahoti — Analyst
Praveen Sahay — Analyst
Ritesh Shah — Analyst
Nitin Shakdher — Analyst
Amar Maurya — Analyst
Nitesh Dutt — Analyst
Udit Gajiwala — Analyst
Utkarsh Nopany — Analyst
Ashwath Rajan — Analyst
Arun Baid — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Kajaria Ceramics Limited hosted by Aquarius Securities 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pranav Mehta from ICVIRA Securities Private Limited. Thank you. And over to you sir.
Pranav Meheta — Analyst
Thanks Pooja. Good afternoon everyone. On behalf of ICIRA Securities I welcome you to this post result conference call with the management of Kajaria Ceramics. From the promoter side we have Mr. Ashok Kajaria, Chairman and Managing Director Mr. Joint Managing Director Mr. Rishi Kajaria, Joint Managing Director and Mr. Karthik Kajaria. From the Finance team we have Mr. Sanjeev Agarwal, CFO and Mr. Parvin Gupta, DVP Finance. I will straightaway hand over the call to Ashok sir for his opening remarks post which will open up the floor for questions. Over to you Ashok Sir.
Ashok Kajaria — Chairman & Managing Director
Thank you Punar. Good evening everyone. It gives me great pleasure to welcome you to the quarter four F25 earnings conference call of Kagaria Ceramics Limited. Joining me on this conference call is the senior management team of Kagaria Ceramics. Our consolidated revenue for the quarter stood at rupees 1,227 crores including plywood indicating a 1% year to year decrease compared to the corresponding period last year due to low tile volume growth and decline in plywood shape. In quarter four F25 we witnessed very soft demand in domestic as well as export market. We grew our tile volume by 2% in quarter 4 25.
In the full financial year we have attained a 6% volume growth reaching 115 million square meters. The EBITDA margin for the quarter 425 stood at 10%. The regions for decline in margin are not the muted quarter of the Marchway division. Some loss in UK operations and provision of doubtful debts in Klaiwood division. As we have decided to close this division, we had set up Clybal Division in 2017 hoping that due to implementation of GST there will be shift from unorganized products to branded one. But this thesis didn’t work. Hence we have decided to close this division.
Our Nepal project which commissioned on September 24 has operated at 50% utilization in quarter four. India’s style exports have experienced a 20% fall in value in financial year 25 to rupees 16,000 crores versus 20,000 crores last year. This was largely attributed to increased freight rates due to the Red Sea crisis and other ongoing geopolitical disturbances. The industry scenario is a bit challenging. We have initiated certain measures to optimize our sales and marketing sources. We have started this in four states and shall take it further as we go along. Due to competitive reasons, we shall not discuss this in detail till the successful execution of the same.
We are also exploring certain other measures including customer optimization, strengthening the brand, enhancing the reach and repositioning our value proposition to the end customers. We hope that these measures should make us more competitive and grow much better than the industry and result in improving margins going forward. Now for this quarter segment wise financial performance tile segment remained flattish at Rupees 1,088 crores compared to Rupees 10. 92 crores in Quarter 4. F24 market segment registered a 8% year to grow year to year growth in revenue reaching 111 crores compared to Rupees 92 crores in Quarter 4.
The Plywood revenue decreased to Rupees 5 crores as compared to Rupees 33 crores in Quarter 4. 24 revenue from addition grew to Rupees 23 crores in Quarter 4 as compared to Rupees 14 crores in Quarter 4. 24 back for the quarter these grew by 58% to Rupees 43 crores in Quarter 4. 25 as compared to 102 crores in Quarter 4. 24 as of 31st March 25th, the working capital days decreased by 7 days to 51 days compared to 31st of March 24th. The low number of days in March 25th is due to reduction in private business.
With this I take this opportunity of thanking you for joining us today. Over to moderator for a few minutes.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Agarwal from Ikegai Assets. Please go ahead.
Rahul Agarwal
Hi sir. Good evening. Thank you for the opportunity and good to see the balance sheet discipline in a very tough environment. So congratulations on that. Sir. Two questions I had. Firstly to start up with an industry growth versus what Qadari has done full year Kagaria grew 6% on volumes. I just wanted to know how did the industry pan out overall on domestic side? And your outlook on domestic and export sales for the next year? That’s the first question.
Ashok Kajaria
Should have grown by about 2,3% in the financial year which ended in March 25 domestically and as I said exports have degrown by 20% in financial year 25.
Rahul Agarwal
What do you think about the next year in terms of outlook? Any comments? Qualitative also will
Ashok Kajaria
help you see two things. The market has been muted but at Kajeria with all these things what we are planning we should do much better than the industry.
Rahul Agarwal
And do you see revival in exports next year?
Ashok Kajaria
Exports should definitely go up with the things easing out worldwide. And also the freight rates are the lowest today. So with this export should start picking up. And I think I personally feel that export should touch 20,000 crores again this year.
Rahul Agarwal
Got it sir. And sir, second question was on fuel price, both gas and propane. I think what are the trends you are seeing currently? Because I think the cheaper crude should help going forward. So any outlook on fuel prices will help sir.
Ashok Kajaria
See currently we are paying about 38 rupees cumulative for all the plants. Right now gas is at par with propane. Like in our south plant just now one of the plants at Kalasi, gas has become slightly cheaper than propane so they are shifted to gas. So in north plant we are only using gas. As you know in Morbi the flexibility is there whether to use propane or gas depending on the prices prevailing in that particular month.
Rahul Agarwal
Would you say that we will have a cheaper fuel price going forward like next year versus this year?
Ashok Kajaria
It’s too early to say. It’s too early to say because prices are related to Brent. As you know, bread is slightly low right now. But it’s difficult to make a commitment for next year. It will all depend on how things shape up as far as oil and gas is concerned.
Rahul Agarwal
Go ahead sir. All right, that’s all from my sir. I’ll get back in the queue. All the best.
operator
Thank you. The next question is from the line of Sonali from Jeffreys Group. Please go ahead.
Sonali Salgaonkar
So thank you for this opportunity. So my first question is a little broad based. So how do you see the real estate cycle right now? And even in the past two to three years when the real estate cycle was sort of steady on the tight industry and this is more of an industry level question, I know we have grown faster than the industry. Why are we still seeing as an industry a single digit volume growth in tiles.
Ashok Kajaria
See, as far as Kagaria is concerned, as I said, we are now unifying our entire operations over a period of next six months to nine months. And with this I think things will be much better as far as we are concerned and we should do better than the industry real estate market. So as we said earlier, our turn comes to be at P2. So hopefully now this year I think things should be much better. If the industry grows in the real estate, if there’s a boom in the market, if things are all good, I think we should definitely get a good share of the market.
Sonali Salgaonkar
Understood. Now the real estate cycle is broadly steady, right? Not rather. Are you seeing any.
Ashok Kajaria
It is stable. So yeah, we should get good. We should. As the demand increases in the market, we should get a good share.
Sonali Salgaonkar
Understood. Question. In terms of any pricing actions you have taken in Q4 or you’re planning to take in Q1, especially given the challenging environment.
Ashok Kajaria
Your voice was not clear. Can you repeat your question?
Sonali Salgaonkar
Yes, yes, yes, apologies for that. Is there any pricing action that you have taken in Q4 or do you foresee to take in Q1 considering that the market is bit challenging right now, as in any price cuts in batware or tiles. Yeah.
Ashok Kajaria
Oh. So pricing, we are not touched till now. But now we are increasing our pricing. We are increasing our pricing little bit to see how it goes.
Sonali Salgaonkar
Okay. And that would be.
Ashok Kajaria
Sorry,
Sonali Salgaonkar
Quantum. Quantum of price increases. Understood. And this will be across bathware and.
Ashok Kajaria
No, it is not across all the division. It is a select type of. Type of product and we will take it as we move forward.
Sonali Salgaonkar
Understood, sir. And just one last question. Any guidance for FY26? Because you know this is the fourth quarter. So understand any volume or margin guidance you would like to give at this point in time for F26.
Ashok Kajaria
So Mary, at this stage we are not giving any guidance and best possible scenario in the current environment. So I think you have to wait for a quarter or so before we come out with some numbers and then we’ll talk about it. If you permit us.
Sonali Salgaonkar
Of course. No problem at all. Thank you. And all the best to this.
Ashok Kajaria
Thank you. Thank you.
operator
Thank you. Ladies and gentlemen, in order to ask a question, you may press star and 1. The next question is from the line of Sejal Gupta from SC Securities. Please go ahead.
Sejal Gupta
Yes, good evening everyone. So my question is. So you have been giving a guiding and forecasting and X growth for your company and which you have not been able to achieve. So you Know when the management guides something to the investors we really rely on that and when obviously you are not being able to achieve those numbers brings a lot of disappointment. I just wanted to understand what is the reason of this forecast failure at Rand.
Ashok Kajaria
No, you are absolutely correct. We have been guiding for the last three years. We have not been able to perform. I agree on behalf of the management and as I said just now to Sonali that this year we are not guiding and will perform. Okay, Mr. Ker, one thing is there. The leader is promoter is always optimistic. So by giving guidance he is always bullish. That and it happens or not, it’s not in our hands. Sometime in. In this, this time this has been a. We will agree for three, four years what we’ve been guiding we have not been able to do.
So that is why we are refraining ourselves giving any guidance. Rather we will perform and then say anything. Because some of the things we forget that most some things sometime are not in our hand. We try our best, we will do our best. We’ll do the right thing. Whatever things in past we have done anything not correct. We are correcting everything. So you will see a much better picture.
Sejal Gupta
Okay. I just hope that this year we should perform well because you know it has been quite some time that we need to see some good performance coming out of the company. My second question is we have a plant in Nepal. Could you just make me understand what is the reason of having opening up a plant in Nepal and what kind of profit and loss are we making in that plant?
Ashok Kajaria
Here in Nepal we put a 5 million square meter capacity plant which makes ceramics and GVT. The total market size is roughly 2500 crore. And the basic thought process behind it was there’s a huge customs duty from India to nepal which is 50 to 55%. By putting a domestic facility we have become more competitive and want to gain more market share in the Nepal market. So we operate 49% capacity in quarter four with a EBITDA margin of 12.5% currently. And going forward the volumes out there should improve.
Sejal Gupta
So as of now are we making any loss in that plant or is it a profitable plant?
Ashok Kajaria
As of now the numbers are not very important because this is just two months operation. So we will be able to give right picture after, let’s say after first half or so then we’ll know because what had happened that in when we put up a plant in Nepal then the situation was different. Now the situation is a bit tough. That is why we have not been able to Utilize our plant at full capacity. That’s fine. But just for your information, we are not losing money, we are making money. I will continue to improve as we.
Sejal Gupta
Go there because as I understand because once any. So this is my thought process, when any management goes outside India, that means either the demand in the country is slowing down or you think that you have already fulfilled the demand in the country and then you go out of the country to set up the plants because you see your plant in London or that you’ve already started in London. That is also bleeding.
Ashok Kajaria
Nepal is like India and looking at the demand, we have a local partner there and we just started the operation six months back. This year should be much better.
Sejal Gupta
So yeah, because like you know what I’m seeing in the company, your plywood business which you have obviously taken a call to shut down and your London, this UK business is not doing well. So why not concentrate on India, India business And rather than going outside India in case you are bleeding, I don’t know if in case do you plan to wind up this business at some point of time or you want to continue with Nepal.
Ashok Kajaria
Now this is not relevant at this point of time because we are not bleeding. And Mr. Sehal, I will request you to please allow the other participants to ask the question. Please.
Sejal Gupta
Right. Thank you. Thank you so much for your answer.
operator
Thank you. Seju. The next question is from the line of Sneha Talreja from Nuama. Please go ahead.
Sneha Talreja
Good evening team and thanks a lot for the opportunity. Just couple of questions from mine just extended to one of the previous parts and question. In terms of real estate cycle, I would rather want to know where exactly was the weakness? Was it across tier 1, tier 2, tier 3 markets or was it related to project and retail segment? In case we can get some color on that along with liquidity situation now on ground.
Ashok Kajaria
See the whole the industry didn’t grow at all. Industry literally grew about 2, 3%. We still did better than the industry going forward we hope that the industry grows and we perform much better than them.
Sneha Talreja
Yes, this is an industry level question only that the demand you are saying was across the BE tier 1, tier 2, tier 3 and even in projects or retail market. I mean that’s the color that I wanted.
Ashok Kajaria
Correct? Correct.
Sneha Talreja
Okay. And now we are expecting improvement. Any specific areas? Tier 1, Tier 2 projects, retail, any specification that you would want to add here.
Ashok Kajaria
So going forward see India is going to grow and we expect the demand to increase from get be better from all sides, all fronts. Whether it’s tier one Tier two, Tier three or better projects. Projects are also doing now started a lot of projects are happening. So hopefully things should get better. If things get better, we’ll also do a much better job.
Sneha Talreja
Last quarter you had also mentioned that there was certain amount of pressure on realization because that project share had increased as an FL25. What does our share look like for project versus retail?
Ashok Kajaria
Yeah, the project share is approximately 30 and it is more or less maintained like that. So there’s no. Not much difference as far as that is concerned. Share of projects and retail is 70 to the dealer network.
Sneha Talreja
Understood sir. Thanks. Thanks for that sir. Lastly on the margin front we have mentioned couple of one offs. Could we quantify that? You know what were the losses in UK operations or what were the provisions that we have taken for plywood division that could help us just understand the normalized level of margins attained this quarter.
Ashok Kajaria
We have clearly mentioned the plywood. We have taken a 14 and a half crore one off. That is for some compensation we paid to our JV partner for which we agreed to enter into JV. And then later when we decided not to go further in this supply business. So we paid some compensation to them. And 6 crore is also to a vendor. So in fly we have taken around 14 and a half crore one off. And in London we have taken around 7 crore loan right off this year. Apart from the loss we have already been reporting in the earlier quarters.
So this is additional in this quarter.
Sneha Talreja
Understood. And Bath Fair was narrow in terms of margins here.
Ashok Kajaria
Oh there is no one off in Buzbl.
Sneha Talreja
And then one last one if at all I may you have also mentioned. You will see look at the cost structure. While I understand the staff aspect, I’m. Not getting into that. But what are the other measures the company is taking? You know in terms of cost cutting and what’s the eventual target EBITDA margin if at all. You know we are looking at something.
Ashok Kajaria
It is not one area. All the. All the area. We will be looking. We will be looking all the area. Will not split any area. So we know the cost is very important. And we are cognizant of the fact that cost unless we reduce the cost it will reduce our competitiveness in the market. So we we will focus on cost this year.
Sneha Talreja
Understood sir. But any target margins here.
Ashok Kajaria
Oh no, we cannot give quantify.
Sneha Talreja
Thanks. Thanks a lot for the team and all the best.
operator
Thank you. We’ll take our next question from the line of Rishikesh Bhagat from Kotak Mutual funds. Please go ahead.
Hrishikesh Bhagat
Hi, Good Evening. So on plywood fair to assume that most of this impairment or water is done now there’s nothing pending. So in subsequent quarter it will.
Ashok Kajaria
Yeah. Sorry sorry. Most. No it’s 98 we have done so only 2.3crore 2 will come in the first half. That is the sale. That will be the salary of the people who are remaining with the company. And so apart from that we have taken everything in in this financial year. So you are not going to see any surprise in the next quarter or year as far as flying is concerned. Except 2.3crore rupees expenses. Or maybe some under provision or over provision of debt. Small for small.
Hrishikesh Bhagat
And just earlier participants question on bathware. I know you spoke there’s no one off. But broadly what will be the PBT margin or EBITDA margin for? Because I believe incrementally there was thought that this mudrag because of new plant will gradually reduce as utilization improve.
Ashok Kajaria
So this year because the margin was 8% last in 2324 this year we could do the 4% because of the late implementation of the new plant. So the expenses have gone up and we have not the sale was less. So this year the base margin was low. And we hope the margin will improve next year better.
Hrishikesh Bhagat
Okay. Okay. And just lastly whatever you spoke about provision regarding this plywood. Those are taken above EBITDA right? In terms of this is over and above the impairment. And that’s how we should look at it.
Ashok Kajaria
If you see my our investor release it’s very clear. We employee everything is a business loss except 14 and a half.
Hrishikesh Bhagat
Okay. 14 and. Okay. Thanks. Thanks.
operator
Thank you. We will take our next question from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
Hi. Thank you for the opportunity. So we can see JV has turned in profit table. We can see some. You know 17 profitability. Is it due to Nepal JV?
Ashok Kajaria
Sorry.
Keshav Lahoti
So your daily earlier used to record loss. But this time it is 70 million profit for this quarter. Is it due to Nepal JV?
Ashok Kajaria
No, no, no. Nothing to do with the Japan Nepal number is very very small.
Keshav Lahoti
So what is that 70 million pertaining to for this quarter profit?
Ashok Kajaria
17 million means 1 and 1.7 crore. Sorry. 7 crore. 70 million 7 crore.
Keshav Lahoti
In consolidated. We can say 7 crore profit from baby.
Ashok Kajaria
That I think there was some entry diversal of some earlier. Earlier period this year. So this is this profit belongs not to this quarter for some until the by auditor in this quarter.
Keshav Lahoti
Understood. Got it. So as Nepal you. You know mentioned that Nepal is operating at 50% utilization. So it would be fair to assume whether the sales would also be 50% or sales would be lower. And what sort of utilization you’re looking for Nepal.
Ashok Kajaria
So sales about 50 in graduate will grow from here. And as I said earlier that we are not making losses in Nepal. We are still profitable. But the profit is very very marginal. And as the volume increases if the profits will also increase.
Keshav Lahoti
By profit you mean profit after tax, not ebitda, right?
Ashok Kajaria
It is meaningless to talk about profit. As I said, we have just started the operation. So any figure whether it is profit or loss. Even if I say I’ve made a profit. But that’s not. Or. Or whatever. So I will request you to wait for some time. Let. We will let us perform for six months. That will be the real number. We will be able to give you to what we have achieved in Nepal.
Keshav Lahoti
Understood. But. But just last clarification. I need the profit. You mean operating profit. Right? Now you’re talking, right?
Ashok Kajaria
Is operating profit in Nepal. Yes,
Keshav Lahoti
understood. That is helpful. Thank you.
operator
Thank you. The next question is from the line of Praveen Sahai from Prabhu Das Liladar Capital. Please go ahead.
Praveen Sahay
Yes. Thank you for opportunity. So my first question is related to the capacity. And if I look at your production number with the capacity you are at some 97% of a utilization. So if any, you know growth will come the way forward. How you are looking at you know the volume number to shape up especially from the wound manufacturing and the subsidiaries.
Ashok Kajaria
So our own manufacturing and subsidiaries are operating at almost 97% 98%. But plenty of material is available in Modi. So as we go along, whatever material we require we can always outsource from there. So that is not an issue.
Praveen Sahay
And related to that sir, one just a clarification. Because last year the growth number if I look at is of around a 6%. But the production number is quite a higher comparatively. So and quarter on quarter from the last four quarter we are continuously seeing your production number is a quite a higher as compared of the sales numbers. So why you are actually this production number isn’t the higher side inventory building or so?
Ashok Kajaria
No, there’s no inventory building. We have in fact reduced our inventory.
Praveen Sahay
Okay. Second thing that. Because see if I look at your production number versus sales number there is a quite a difference. So that’s why I asked this question. I’ll clarify offline if so. Next question. Sir is related to the fuel pricing. Fuel you had given a 38 rupees north pricing. How. How about the. You know The Morbi pricing, South pricing. And overall
Ashok Kajaria
Average price is 38 rupees for Pizaria.
Praveen Sahay
Okay. And any bifurcation which you used to give like south, west and north,
Ashok Kajaria
I. Can give you straight. North is 38, 39 is south and west is 37. Average is 38.
Praveen Sahay
Okay, thank you, sir. That’s it from my side.
operator
Thank you. The next question is from the line of Ritesh Shah from Investech. Please go ahead.
Ritesh Shah
Hi sir. Thanks for the opportunity. So one is earlier we had indicated that we were creating specific teams for the government projects. And last year we had done around 10% of the volumes. The number indicated for this year was around 12 to 13%. So just wanted to get a gist where we are on that number and how do we see this number going forward?
Ashok Kajaria
Last year the number was close to about 4% out of 108 million we sold the government projects was about 4% roughly. And this will be a targeting for about 8 to 10%. I think roughly we have done about 6% as far as government projects are concerned. Last year the theme was only for North. Now we have penetrated to east, west and south. So we have an additional 2% more. As we go along, we’ll focus on that and try to reach to a level of 8 to 10%.
Ritesh Shah
Sure. So second question is, I understand we have launched a few brands in the retail network. I was just trying to understand what is the thought process, including, I think specifically Kajaria Crest Universe. Is it a different type of showroom targeting the economy segment that we are looking at? How should we understand that?
Ashok Kajaria
So earlier we had showrooms called Prima plus in the ceramics vertical which we just rebranded to Grass Universe. That’s the only change. Nothing else has changed. It’s a normal product. Nature has changed. Everything else stays the same.
Ritesh Shah
Okay, so we have Prima plus, we have Galaxy and we have World. Nothing else has changed. Right.
Ashok Kajaria
Currently from a distribution division, Ceramic PVT and GBT Star includes two divisions out of three. And we are in the process of rebranding our entire. So going forward, before six months, you see a lot of changes. We are rebranding a lot of things to make it much easier for the customer.
Ritesh Shah
Okay, but will the SKU placement in each of the category be also very different to what we had in the past?
Ashok Kajaria
Yes, it will be. It will be. We are consolidating our sqs as well to make it easier for the customer.
Ritesh Shah
Okay. Would it be possible to give some broader thoughts over here?
Ashok Kajaria
This is truly. We are working on it. Let us do it and then we all said that give us three to four months. You will see much more changes as we go along. It’s too early to comment. The process.
Ritesh Shah
Perfect. Sir, would you like to comment on the channel inventory? Demand isn’t great, but how is the channel inventory and how do you look at the competitive intensity in the marketplace?
Ashok Kajaria
Channel is when over a period of time has come down for a simple reason. Because of gst, the transit time is reduced. I think normally a dealer now keeps stocks of about 30 to 45 days because of the range. Otherwise the transit period has reduced drastically after gst. So I think more or less that remains the same because of the nitrogen range of products. This is the inventory level at various 20 to 45 days. Also because of multi location factories. It has helped, you know now since your factories everywhere that has really reduced their inventory at a dealer level.
Ritesh Shah
Right. And on the pricing discounting among the larger players in the industry, how should one read into that?
Ashok Kajaria
Sorry, come again.
Ritesh Shah
Basically I wanted to understand on the competitive intensity in the marketplace, given the demand is weak, how is Kajaria approaching the marketplace? How do you see our peer cell is approaching? So how should one read into the marketplace?
Ashok Kajaria
Demand is not weak, it’s normal. Demand is not weak. Demand is normal. We are looking for a scenario, as Rishi said earlier, that the real estate projects, some demand have started emerging. So my demand is normal. And as far as the competitive intensity is concerned, the organized players have no such thing that they are undercutting the prices. It is basically the competition is Murbi versus the organized players, right?
Ritesh Shah
Sir, if I just refine the question a little. If one looks at a few brands out of Murbi, obviously they have a low base but they have grown at a significantly higher pace versus what we have reported. So how should we understand this and how would we look to tackle this going forward?
Ashok Kajaria
First of all, there are two brands which have emerged. One is Simpulo, one is Vagora. By and large they are doing a good job because they are operating from Morbi. As we all know, the moment they diversify to rest of India, there’ll be lot of the things, lot of other expenses go up, a lot of branding has to be done. But basically right now two major brands have emerged which we value and which we understand. And at the same time, the moment they get out of Morvi, it’s a different scenario. Right now we are all Kanjaria Somali, we are located all over.
But the moment they get out, a lot of other expenses happen. As you know. So we’ll see that performance when they get out.
operator
Thank you. Sir, we request you to rejoin the queue for follow up questions. So the next question is from the line of Nitin Shagder from Green Capital Family office. Please go ahead.
Nitin Shakdher
Hi, good afternoon to the management. This is Nitin Shakto from the Green Capital single family office. My question pertains to Qadaria International gncc. While I understand that UAE has a robust real estate demand, any learnings as to what really went wrong in UK and how are the company taking it a step further and getting aggressive in the real estate markets? It’s not an analyst question, but more from an investor point of view.
Ashok Kajaria
No, it’s a good question. So Kajaria DLCC invested earlier in Dubai and then in uk. So we honestly got tempted by the good retail prices in the UK market. That is why we entered into a JV with a local partner there. And while during the operation we realized the costs are very high of running it. So looking at the management bandwidth and looking at the domestic growth in domestic future demand in India, we said it is better that we give that showroom to the local partner only getting our equity back and let them run it.
And we continue to export. See, export will always be 11 2% of our business. Our main focus is domestic, domestic and domestic. That’s why the brand is very, very strong and that’s where we make the margin. So Dubai said okay, uk we didn’t have a very good experience. So rather than prolonging it, we still continue to export that but we have continued to discontinue our retail venture. Correct.
Nitin Shakdher
So I’m assuming that Dubai would be continuous long term investments considering it’s a. Very robust real estate market,
Ashok Kajaria
small investment and it is breaking even because of the showroom. We are at least getting some orders from the Gulf market.
Nitin Shakdher
Okay, okay. And my second question is, I know. Before that there is an offset on the plywood business and some N operations are shutting down and B is also muted. Now just sort of understand as an investor, you know when the quarter four seems like a cleanup where the books are cleaned up and you then go back on your trajectory of growth, is that understanding care and you should not. Expect any further larger offsets apart from. The barring 2, 3 crore minor offsets.
Ashok Kajaria
Absolutely correct. Absolutely correct. As Sanjeev has already said. But in as far as fly is concerned, we have written off everything. There will be an impairment of about 2, 2 and a half, 3 crores because of the manpower which is there which will go by end of May. But other than that everything has been taken care.
Nitin Shakdher
Okay, thank you. Thank you Chetan. Thank you Rishi and hope we can get back to the.
Ashok Kajaria
Thank you. Thank you.
operator
Thank you. We will take our next question from the line of Amar Moria from Lucky Investments. Please go ahead.
Amar Maurya
Thanks for the opportunity. Firstly sir, what would be our revenue. Mix between Tier 1, Tier 2 and Tier 3?
Ashok Kajaria
See we have earlier said there is also Tier 4, Tier 1, Tier 2, Tier 3, Tier 4. Roughly Tier 1 is about 15 to 18%. Tier 2 is about 30%. Tier 3 is again about 15, 30% and the balance will be from TFO roughly plus minus 60% here and there could be.
Amar Maurya
Okay, so sir, like you know, in terms of the competitive intensity majorly we would have seen the pressure in which part of this segment.
Parveen Gupta
See pressure is everywhere. See project is everywhere. But basically you know the dealer, I would like to repeat that word and the entrepreneur is behind it. He’s successful whether he’s sitting in tier 1, tier 2, tier 3 or tier 4. Because earlier dealer used to be a retailer, come a wholesaler. Now after GST the wholesaler concept is more or less out is either he’s a retailer or supplying to projects. So keeping that in mind, wherever good showrooms have been created, good displays there and the good promoter is behind that showroom, he’s successful. Okay.
Amar Maurya
And sir, like you know everybody, I mean we are of the view that the competition from Morbi has terrified and that is the reason majority of the organized players are basically having a volume decline or volume slowdown. So how far do you believe this story?
Ashok Kajaria
No, no, you have to understand that overall industry has grown by 2 to 3% which I already said in my earlier remarks, domestic market has grown by 2 to 3%. So when you say 2 to 3% as we all know 75% production of the cross country is in lobby. So that means they have not grown, they organized players. Whether it’s grown by 6% or 5% or 10% or 8% I do not know. Nigeria has grown by 6% volume. So even then we have taken some volume from somewhere from somebody. So looking at that is the as said earlier than the industry that’s a commitment we’ll make.
Amar Maurya
Okay. Okay. And sir, now normally in the real. Estate cycle, normally we would have seen a significant presale in all listed real estate companies. So normally, I mean in which year. This real estate cycle comes to actual revenue for us in third year, fourth.
Ashok Kajaria
Year T plus three. This is the year where you should this is a three years of completed since the real estate cycle started. As you have already have been telling, this is the year where things should start looking around better as you go.
Amar Maurya
Okay. Okay. Perfect. Perfect. Thank you sir.
Ashok Kajaria
Thank you.
operator
Thank you. The next question is from the line of Nitesh Dut. But before that we would like to remind participants that you may press star and one to ask a question. Please go ahead. Nitish.
Nitesh Dutt
Hi. Thank you for this opportunity. Sir, my question is on real estate cycle which a couple of participants and you have touched upon earlier. So I believe there were a lot of launches around FY22 and 23 which. As you just mentioned should get reflected. In an upcycle for tiles companies and. Other building material players in FY26 and milliseconds. So that is largely on the Tier. 1 side where you highlighted that 15, 18% of your sales come from. Do you also believe that things are. Picking up in tier 2 and to an extent in tier 3 as well? And if yes, are there already some signals, et cetera that you are seeing on the ground or any hard data on projects etc. That you are tracking?
Ashok Kajaria
So for Tier 2 and Tier 3 we are strengthening our distribution network. We are trying to make our dealers more exclusive. So right now we have 1850 dealers. Out of about that 440 dealers should be about 430, 450 should be exclusive who sell only Kajaria. So our strategy going forward is more and more people to come in the fold of selling only exclusively Kajaria times.
So with this we definitely see a certain sales
Nitesh Dutt
request of the demand like tier one. We are expecting the demand to revive a lot at an industry level. Right. Because of all of these new launch completions that were started in FY22 and 3.
Ashok Kajaria
We expect the demand to be there all India. We can’t separate only tier tier 1. Tier 1, tier 2, tier 3, entire India which the projects are happening everywhere. So that result will come from everywhere, all parts of India. And tier one is comparatively less. More action is happening in tier two and tier three.
Nitesh Dutt
Any, any thoughts on what kind of industry growth should one expect for the next couple of years? FY26, maybe 27?
Ashok Kajaria
It’s difficult to say, difficult to predict. But as we committing that whatever the industry growth is, Kajala will be better than the industry, we can guarantee that. How the industry will grow, it’s very difficult to predict.
Nitesh Dutt
Sure. Thank you. I’ll get back in the kitchen.
operator
Thank you. The next question is from the line of Rahul Agarwal. From Ikigai assets. Please go ahead.
Rahul Agarwal
Yeah. Hi. Thank you for the follow up. Sanjeev, you just wanted to clarify one thing. You said the 14 and a half crore provision and about 7 crore of UK that’s 21 and a half crore. This is included in the other expenses line item in the console accounts. Is this correct?
Sanjeev Agarwal
No, no, no. They are not included in. They are included. So the 14 and a half crore has been shown as separate item. As an exceptional item.
Rahul Agarwal
Okay. But when I look at console accounts there is no exceptional which is reported in the financials. I’m looking at consolidated accounts.
Sanjeev Agarwal
Just a second. I’ll clarify to you offline.
Rahul Agarwal
No problem, sir. And just one more clarification. So when you say.
Sanjeev Agarwal
This loss was basically because the new plant only for.
Rahul Agarwal
The new plant not on console. Right.
Sanjeev Agarwal
The Top one was 390. Around 390 crore.
Rahul Agarwal
That helps. Thank you so much.
operator
Thank you. We’ll take our next question from the line of Gajivala from Yes, securities. Please go ahead.
Udit Gajiwala
Yeah. Hi sir. Just a couple of questions. One on the pricing front. How do you see this year panning out in terms of your overall pricing for broad SEOs in tile specific.
Ashok Kajaria
So as we go along we’ll see. And as the market improves we keep on trying to increase prices and improve the realization. But it will be a strategic and a very strange affair as we go along. It’s difficult to tell you any numbers right now. But as the market demand improves and wherever we can get a better realization we’ll start increasing prices.
Udit Gajiwala
Understood? Understood. And so lastly what will be the cater exactly? Income for the coming fiscal. That’s it.
Ashok Kajaria
That will be around 150 to 200 crore. For this year it will be 250 crore.
Udit Gajiwala
Okay. Thank you. So all the best.
Ashok Kajaria
I wanted to clarify one point which before you Rahul has asked about the price thing. Actually what had happened was that because of some accounting is 10 standard. The auditors have shown try operation as a discontinued operation. So that is why the the exceptional item is being merged with the loss in that account. In the. In the auditor account. If you see the note from account it is shown in the notes on account which shows that this is 14 and a half crore rupees exceptional. So this is for Rahul.
operator
Okay. Thank you sir. We will take our next question from the line of Utkarsh Nupani from Bob Capital Markets. Please go ahead.
Utkarsh Nopany
Yeah. So my first question is on. On your capex plan. So. So like we have a long balance sheet with a Good cash balance. And our existing tile plant is operating at full capacity also. Then why we have deferred our investment proposal of coming up with a large slab GVD tile plant in Morbi. Can you please throw some line?
Ashok Kajaria
So basically there is enough capacity in Morbi. And if you want to we can always outsource that in the future. Instead putting our own 200 crore capex and putting up a fresh plant out there.
Utkarsh Nopany
Even for the large slab GBT tile plant. You are. You are of the view that there is an excess capacity in the market. So. So we are not intending to come up with a new plant.
Ashok Kajaria
See we already have two lines of Contigua plus. We are the only company which has a plant in north and north in south of India for Contigu plus which makes big slabs. So we already have the capacity. And as right now the demand hasn’t muted. So we don’t want to, you know invest that kind of money. And just great for the industry to improve. As the industry. As the market improves. We right now have enough capacity available Modi. Which we can outsource from later. In future if you need to do, we’ll do it. We’ll again come to the board.
But right now we didn’t want to do it. So that’s why we said we want to scrap this project. Withdraw the proposal for the time also.
Utkarsh Nopany
Second question is on your tile margin in the March quarter. So even if we adjust the 7 crore write off related to the UK operation then also our ties a bit margin has come down to multi year low level. So can you please explain the reason for sharp margin pressure in the ties segment on a Q1Q basis.
Ashok Kajaria
So this has been various reason like some write out we have taken for London. And apart from that we have also taken some the debt provision and maybe some this time. So we hope that next year onward the margin will be much superior.
Utkarsh Nopany
Sir, what I am asking is that your plywood losses you have shown it as part of discontinued operation. Now if we adjust the 7 crore write off related to UK also then also your margin has come down. So what is the reason for that?
Ashok Kajaria
The whole whole fly operation you have. We have shown the fly losses 33 plus 40. Yes. 48 crore. 49 crore. It is not 49 crore. You will add back. You will add back only 33 crore. Because 14 and half crore was an exceptional item which has been shown as a note in the audited accounts. So if you exclude. If you add the 49 crore obviously the margin will come higher.
Utkarsh Nopany
Okay. I am Talking about the tile segment margin which doesn’t include the plywood segment.
Ashok Kajaria
We don’t have the tile segment exact margin. But yes, to answer your question, it will improve. Definitely. Going ahead we have done a lot of corrective measures which you don’t want to talk about right now. We want to do our job. But yes, the margin will significantly improve. Will improve.
Utkarsh Nopany
And lastly on the ties export front. So like whether our understanding is correct that the trump tariff issue is likely to weaken the global ties demand which in turn may further impact our ties export from India. So can you please throw some light over there? Whether our understanding is correct or not.
Ashok Kajaria
We are thinking differently. See as far as the funding is concerned right now India’s debit at 10% and then we approved 26%. With all the efforts going on, it will not be more than 10%. And we’ll be happy to note this is for all of you that there’s an anti dumping investigation against India and US and the duty has come out as zero. So imports of ties to America, whatever has happened last year will be 50% more this year because of the anti compensation was the largest exporter of telescope us. So the market demand continues.
So export will not come down. Even last year in spite of it dumping trade, the exports were.
Utkarsh Nopany
Okay. Thank you.
operator
Thank you. The next question is from the line of Aswath Rajan from Arihant Capital. Please go ahead.
Ashwath Rajan
Yeah. Thank you. Since we’ve seen this oversupply in this. Industry for a while right now, what. Do you foresee in this? Do we see this supply to be diverted back into the export markets? And what is your opinion on this thing?
Ashok Kajaria
I have already said that this year the export will cost 20,000 crores. So reasons one, the stability in the world markets and two, the freight rates are the lowest. The freight payer last year to the European markets was close to about $4,000 which has now come down to $1,600. Making India again very very competitive. So that 16,000 crores should go beyond 20,000 crores result. Part of these materials which were diverted to the domestic market will not be diverted here. And the pricing part should look better as we go.
Ashwath Rajan
Okay sir. And on the market share front, have you gained any market share? Given some closure in the mobi, some unorganized player have been experiencing closures. Have you gained some market share there?
Ashok Kajaria
I already said earlier the domestic market overall has grown by 22 and half percent. We at 6% in volumes. We didn’t know what we wanted our level. But definitely we Have g market share. And as already said many times in this conference now coming year will gain much better market share whatever prices. We.
operator
Thank you. We will take our next question from the line of Mokshanka from Aurum Capital. Please go ahead.
Unidentified Participant
I wanted to understand the industry scenario actually focused on some one segment for example. And then what happened is everybody started getting into everybody and that’s the whole industry thing. So is this the reason for oversupply? Could you help us understand the industry in
Ashok Kajaria
your question? You are not very clear. What are you exactly asking? Which division there is an oversupply clients or Bhakti?
Unidentified Participant
Both. Both. I wanted to ask. I want to understand both because
Ashok Kajaria
firstly. It’S a dedicated business, right? All the. All the tile comes the bigger tile company that is in Polo or a Johnson or a Somani or Kajalia. They all are into sanitary faucet because it’s a related business. Like I’ll give you an example. We just opened two, three experiences centers. Big experience centers in south like in Chennai. We opened a 14,000 sq ft Experience center with tiles and sanitary wear and faucets. We are getting very very good demand. You know the business are coming. They’re saying oh wow. I can know that Kajaji has such a good range of sanitary when faucet as well.
So when the customer is buying the tile is also buying that. So it will work in our favor rather than your point of being a over supply or it’s a wrong. It’s not like that. It is a complementary business and it is a. It is only gonna give us good returns in future.
Unidentified Participant
Okay, that. That’s it from my side. Thank you.
operator
Thank you. The next question is from the line of Arun Baird from ICICI Securities. Please go ahead.
Arun Baid
Yeah. Hi sir. I understand you mentioned in near term. You don’t want to give a guidance. But sir, from a medium term perspective. Do we believe we go back to. That double digit kind of volume growth without historical margins or about 15, 16%. Do you believe that is something which we can as investors try to look at?
Ashok Kajaria
See, this is another way of asking the guidance. We’ve already said we will not give guidance. So please,
Arun Baid
right now for FY26, I’m saying with the measures you are taking.
Ashok Kajaria
Right now and what are you doing? Our best and we will be. We will be doing very hard work. We’ll be doing and we will do. But we will refrain from giving any guidance. Because when we give guidance, when we don’t attend the guidance then you people say you have not attended the guidance. So it is better not to give the guidance and.
Arun Baid
Okay, thank you.
operator
Thank you. The next question is from the line of Ritesha from Investech. Please go ahead.
Ritesh Shah
Can you detail something on the initiatives that we have taken on the technology side including Salesforce Automation. Is it already done on a pan India basis? Are we already ripping the benefits or incrementally? Do we expect something out of it?
Sanjeev Agarwal
We’ve done started Salesforce Automation and DMS also which is dealer management system both have started now. Benefits will accrue in the coming months. We just launched it. People are getting used to it because it was not in their culture and system earlier. But definitely we see more efficiency generating out of it in the coming months as we go along.
Ritesh Shah
And has this been implemented on a pan India basis or is it certain pockets that we have implemented?
Sanjeev Agarwal
Feeding of orders in the system of dealers and the Salesforce Automation and everything.
Ritesh Shah
Okay, that’s. That’s great. Just for the sake of repetition sir, if I had to ask you one single variable which will help us drive volume growth into the next fiscal what would it be? Is it the branding reject that we are looking at or is it technology implementation or is it the distribution widening thing that we are working on? What will be the single most important variable?
Ashok Kajaria
That there is no single big thing. There will be population of management. Many tester.
Ritesh Shah
Sure sir. Thank you so much for the answers. Thank you.
Ashok Kajaria
Thank you.
operator
Thank you. The next question is from the line of Praveen Sai from PL Capital. Please go ahead.
Praveen Sahay
Thank you. For a follow up sir, just if you can give any clarification on your 250 odd crore of a capex you are planning for 26. Where is it? Only for maintenance or something else as well?
Ashok Kajaria
Mainly for maintenance and for our new office we will be making 250 was the last I said the wrongly. If I had said 250 we did last year. This year the position is around 200 plus will be. Let’s say around 100 crores should be regular maintenance capex and 75. Around 75 core will be for the corporate office and small around 25 crore will be for a deck even 1520 crore for maybe Nepal.
Praveen Sahay
Okay, that’s really helpful. Thank you sir.
Ashok Kajaria
Thank you.
operator
Thank you ladies and gentlemen. I would now like to hand the conference over to the management for closing comments.
Ashok Kajaria
Thank you on behalf of entire Kajaria team which is here. I thank you all for organizing this. It was very interesting. Lot of good questions have come and I can assure you on behalf of the Kajaria Management, which is here, that we’ll try to do the best possible this financial year with all the. All the connections which we are talking about. Thanks a lot.
Sanjeev Agarwal
Thank you.
operator
Thank you.
Parveen Gupta
Thank you.
operator
Thank you. On behalf of Aquira Securities Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.