Kajaria Ceramics posts strong Q2 margins, profit jumps 58%

Kajaria Ceramics Limited reported a consolidated revenue of INR1,186 crores for Q2 FY26, a marginal 1% year-on-year growth primarily due to low tile volumes and the cessation of supply sales from a closed division. Despite a soft market, the company achieved a good operating margin of 17.94%, reflecting a 122 basis point sequential improvement and a 447 basis point year-on-year increase. Profit After Tax (PAT) surged by 58% to INR133 crores compared to INR84 crores in Q2 FY25.

The company's cost optimization included reengineering packing boxes for INR30-35 crores in annual savings and reducing headcount by approximately 250 people. While the tile segment remained flat at INR1,051 crores, the Bathware segment grew by 14% to INR102 crores, and Adhesives revenue increased to INR32 crores. Kajaria Ceramics 2.0, under new leadership, aims for above-industry growth rates, superior operating margins, and higher free cash flow generation. Working capital days reduced by 2 days to 56 days as of September 30, 2025.

Management expects volume growth in Q3 and Q4, driven by market improvements, unified sales and marketing policies, and new white space penetration. The company is not adding new manufacturing capacity but is focused on running existing plants at 100% capacity and leveraging outsourcing from Gujarat to meet increased demand.