Kotak Securities has identified Kajaria Ceramics and Vedanta Aluminium as key picks, citing operational efficiency and capacity expansion. The brokerage projects volume growth for the ceramic maker and cost reductions through backward integration for the aluminium giant. These outlooks depend on successful project execution and market demand.
Kotak Securities has released its latest equity research outlook, highlighting Kajaria Ceramics and Vedanta Aluminium as companies with potential for sustained performance. For investors, these brokerage reports serve as a starting point to understand the strategic direction and financial drivers of these businesses, though actual results will depend on market conditions and management execution.
Kajaria Ceramics Focuses on Volume and Margin
Kajaria Ceramics, a major player in the Indian tile industry, is navigating a strategy to boost its performance through internal restructuring. Following a softer start to the current fiscal year in April, the company has indicated confidence in achieving double-digit volume growth throughout FY27. This optimism is supported by a unified sales and marketing strategy implemented in the previous fiscal year, which aims to improve operational efficiency and lower costs related to employee expenses and raw material sourcing.
From a financial perspective, the company is looking to improve its profit margins. Historically, Kajaria saw its EBITDA margin move from 13.5% in FY25 to 17.9% in FY26, and projections suggest it could hold between 18% and 19% in the current year. To support long-term growth, the company is actively expanding its production capacity across North and South India. Investors should monitor whether these new facilities meet demand expectations and if the company can maintain its net-debt-free balance sheet as it continues its capital spending projects.
Vedanta Aluminium Strategy and Cost Management
Vedanta Aluminium, one of the largest producers in the sector, is currently focused on scaling its operations and managing costs through backward integration. As an entity with a significant domestic market share, the company is working to enhance its self-sufficiency. A core part of this strategy involves the commissioning of a 9 mtpa bauxite mine and several coal mines with a combined capacity of 35 mtpa. This is designed to reduce the company's reliance on external raw material sourcing.
If successfully executed, these moves could lower production costs by approximately $150 per ton. The company is positioning itself to benefit from a volume growth strategy over the next three years, supported by the recent expansion of its alumina refinery. For investors, the primary monitorable for Vedanta Aluminium will be the pace of this backward integration and the resulting impact on its earnings as it seeks to become a lower-cost global producer. Changes in global aluminium prices and domestic demand levels remain essential factors that could influence the company’s profitability.