Kajaria Ceramics expects double-digit volume growth in FY27 as it brings new brownfield projects online. While export demand faces pressure from geopolitical issues and rising freight costs, the company maintains a stable margin guidance of 18-19%.
Kajaria Ceramics is working to increase its production capacity through two brownfield expansions, which aim to add a combined 21 million square meters (MSM) of manufacturing space. The projects are located at Srikalahasti, adding 10 MSM, and Gailpur, contributing an additional 11 MSM. These investments represent a significant focus on growing the company's domestic footprint, even as broader sector conditions remain mixed.
Operational Outlook and Margins
For the current fiscal year ending in 2027, the company has projected double-digit volume growth for the first nine months. Despite fluctuations in input costs, it expects to maintain operating profit margins—a measure of profitability from core business activities—in the range of 18% to 19% for the full year. This guidance comes at a time when the building materials sector is managing varying levels of demand and logistics challenges.
Export Pressure and Market Context
While the company is building for domestic growth, its export segment faced headwinds in the first quarter of FY27. Geopolitical tensions in the Middle East, a key market, combined with elevated freight costs, have tempered export performance. This has led to a reduced monthly export revenue run-rate of approximately ₹1.0 billion. Investors tracking the company often monitor these international metrics closely, as they directly impact the overall revenue mix and operational efficiency.
Financial Projections and Monitoring
Looking ahead, market estimates suggest a steady growth path for the company through FY28, with expectations for earnings, revenue, and operating profit to grow. However, the realization of these projections depends on the successful execution of current capacity expansions and the company's ability to navigate external pressures like shipping costs and international demand volatility.
The primary monitorables for shareholders in upcoming quarters will be the commissioning timelines for the Srikalahasti and Gailpur plants, as well as any recovery in export volumes. Changes in raw material pricing and the company's ability to maintain its margin targets amid competitive pricing in the tiles industry will also remain key focus areas for those following the stock.