Kajaria Ceramics saw a 10.2% volume increase in the second quarter, outpacing the broader domestic tile industry. The company is managing rising fuel costs through price hikes while advancing its expansion projects at Srikalahasti and Gailpur. Investors may monitor the progress of these plants, which are scheduled for commissioning in mid-2027, as well as the company's ability to maintain margins.
Kajaria Ceramics recently reported a 10.2% increase in sales volume for the second quarter of the current fiscal year. This growth rate is notably higher than the broader domestic tile industry, which has been growing at an estimated 5% to 6%. The performance suggests that the company is successfully gaining market share, even as the industry deals with general demand fluctuations.
To handle rising fuel costs, the company implemented price increases of 12% to 13% in North and South India. These hikes were strategic, aimed at reducing the price difference with tile manufacturers based in Morbi, who generally operate on lower cost structures. By narrowing this gap to approximately 20% to 25%, Kajaria is working to improve its competitiveness in price-sensitive segments of the market.
A key part of the company’s future strategy involves expanding its manufacturing capacity. New facilities at Srikalahasti and Gailpur are currently under development and are expected to be operational by June 2027. This expansion is designed to support long-term volume growth. In addition to tiles, the company is focusing on growing its bathware and adhesives segments, which helps in diversifying revenue streams beyond just tiles.
Despite these plans, investors often track specific risks related to the ceramic industry. The business is heavily linked to the real estate sector, meaning any slowdown in construction activity can impact demand. Additionally, manufacturing tiles requires significant energy, making the company sensitive to changes in gas and fuel prices. While management expects some relief in gas costs early next year, profitability will remain dependent on how well the company can manage these input costs alongside its expansion projects.
Brokerage firm Prabhudas Lilladher has recently updated its outlook on the stock, noting the company’s operational resilience and planned capacity additions. For shareholders, the most important updates to monitor in the coming quarters will be the progress of the Srikalahasti and Gailpur projects and any changes in the competitive pricing dynamic with the Morbi cluster.