Kajaria Ceramics Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : So two questions I had. Firstly, to start with on industry growth versus, what Kajaria has done. For full year, Kajaria 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.

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : But what do you think about the next year in terms of outlook? Any comments qualitative also will help.

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : And do you see revival in exports next year?

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : Got it, sir. And so second question was on fuel price. Both gas and propane, I think, what are the trends you're seeing currently? Because I think the cheaper crude should help going forward. So any outlook on fuel pricing?

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : So would you say that we'll have a cheaper fuel price going forward like next year versus this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 10:30AM, KAJR.NS - Q4 2025 Kajaria Ceramics Ltd Earnings Call

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : Got it, sir. All right. That's all from my side. I'll get back in the queue. All the best.

Question: Sonali Salgaonkar - Jefferies - Analyst : So my first question is a little broad based. So how do you see the real estate cycle pattern right now? And even in the past two to three years when the real estate cycle was steady, on the tile industry, and this is more of an industry level question. I know we have room for answer in the industry. What are you still seeing as an industry a single digit volume growth in Tiles?

Question: Sonali Salgaonkar - Jefferies - Analyst : Understood. Now, the real estate cycle is broadly steady, right? Not any rather (multiple speakers) --

Question: Sonali Salgaonkar - Jefferies - Analyst : Understood. So my second question is in terms of any pricing actions you have taken in Q4 or you're planning to take in Q1, especially given other challenging environment?

Question: Sonali Salgaonkar - Jefferies - Analyst : Is there any pricing action that you have taken in Q4 or do you feel free to take in Q1, considering that the market is bit challenging right now as in any price cuts in bathware or tiles? Yeah.

Question: Sonali Salgaonkar - Jefferies - Analyst : Okay, and that would be?

Question: Sonali Salgaonkar - Jefferies - Analyst : Quantum of pricing increases.

Question: Sonali Salgaonkar - Jefferies - Analyst : Understood. And this will be across bathware and tiles?

Question: Sonali Salgaonkar - Jefferies - Analyst : Understood. Sir, and just one last question, any guidance for FY26 because you know this is the fourth quarter, so just to understand any volume or margin guidance you would like to give at this point in time for FY26?

Question: Sonali Salgaonkar - Jefferies - Analyst : Of course, no problem at all. Thank you and all the best to the team.

Question: Sejal Gupta - Standard Chartered Securities - Analyst : So my question is, sir, you have been giving -- you have been guiding and forecasting an X growth for your company and which you have not been able to achieve. So when the management does something to the investors, we really rely on that. And then obviously you're 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 your end.

Question: Sejal Gupta - Standard Chartered Securities - Analyst : Okay.

Question: Sejal Gupta - Standard Chartered Securities - Analyst : Okay, I just hope that this year we should perform well because 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 or loss are we making in that plant?

Question: Sejal Gupta - Standard Chartered Securities - Analyst : So as of now, are we making any loss at that plant or is it a profitable plant? (multiple speakers)

Question: Sejal Gupta - Standard Chartered Securities - Analyst : 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.

Question: Sejal Gupta - Standard Chartered Securities - Analyst : Yeah, because like what I'm seeing in the company is 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 business and rather than going outside India? In case you're 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 now?

Question: Sejal Gupta - Standard Chartered Securities - Analyst : Fine. Thank you so much for your answers.

Question: Hrishikesh Bhagat - Kotak Mahindra Asset Management Companies Limited - Analyst : So on plywood, fair to assume that most of this impairment or water is done now. There's nothing pending. So to it (multiple speakers) --

Question: Hrishikesh Bhagat - Kotak Mahindra Asset Management Companies Limited - Analyst : And just earlier participant's 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 smart rack because of new plant will gradually reduce as the utilization improve.

Question: Hrishikesh Bhagat - Kotak Mahindra Asset Management Companies Limited - Analyst : Okay. And just, lastly, whatever you spoke about provision regarding this plywood. Those are taken above EBITDA, right, in terms of the -- this is over and above the impairment and that's how we should look at it?

Question: Hrishikesh Bhagat - Kotak Mahindra Asset Management Companies Limited - Analyst : Okay, 49 lakh. Okay, thanks.

Question: Praveen Sahay - Prabhudas Lilladher Private Limited - Analyst : 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 the utilization. So if any growth will come the way forward, how you are looking at the volume number to save up, especially from the own manufacturing and the subsidiaries?

Question: Praveen Sahay - Prabhudas Lilladher Private Limited - Analyst : And related to that, sir, one just a clarification, because last year, the growth number if I look at is of around 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 quite a higher as compared to the sales numbers. So, why you are actually this production number is on the higher side inventory building or so?

Question: Praveen Sahay - Prabhudas Lilladher Private Limited - Analyst : Okay. The 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 are given a INR38 not pricing. How about the Morbi pricing, south pricing and (multiple speakers) --

Question: Praveen Sahay - Prabhudas Lilladher Private Limited - Analyst : Okay. And any bifurcation, which you used to give like south west and north?

Question: Praveen Sahay - Prabhudas Lilladher Private Limited - Analyst : Okay, thank you, sir. That's it from my side.

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : (technical difficulty) 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 just where we are on that number and how do we see this number going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 10:30AM, KAJR.NS - Q4 2025 Kajaria Ceramics Ltd Earnings Call

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Sure. Sir, 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 Grace Universe? Is it a different type of showroom targeting the economy segment that we are looking at? How should we understand that?

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Okay. So we have Prima Plus. We have Galaxy, and we have World. Nothing else has changed, right?

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Okay but will the SKU placement in each of the category be also very different to what we had in the past? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 10:30AM, KAJR.NS - Q4 2025 Kajaria Ceramics Ltd Earnings Call

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Okay, would it be possible to give some broader thoughts over here?

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : 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?

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Right. And on the pricing discounting among the larger players in the industry, how should one read into that?

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : 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 PSL is approaching? So how should one read into the marketplace?

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Right. Sir, if I just refine the question a little, if one looks at a few brands out of Morbi, 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?

Question: Amar Maurya - Lucky Investments - Analyst : Firstly, sir, what would be our revenue between Tier 1, Tier 2, and Tier 3?

Question: Amar Maurya - Lucky Investments - Analyst : Okay. So sir, like to know in terms of the competitive intensity, majorly, we would have seen the pressure in which part of this segment?

Question: Amar Maurya - Lucky Investments - Analyst : Okay. 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?

Question: Amar Maurya - Lucky Investments - Analyst : Okay. And, sir, now normally in the real estate cycle, so normally you would have seen a significant pre-sale 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 year?

Question: Amar Maurya - Lucky Investments - Analyst : Okay. Perfect, sir. Perfect. Thank you, sir.

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : Sanjeev, just wanted to clarify one thing. You said the INR14.5 crores provision and about INR7 crores of UK, That's INR21.5 crores this is included in the other expenses line item in the console account. Is this correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 10:30AM, KAJR.NS - Q4 2025 Kajaria Ceramics Ltd Earnings Call

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : Okay, but when I look at console accounts, there is no exceptional which is reported in the financials. I'm looking at consolidated accounts.

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : No problem, sir. And just one more clarification on bathware you said full year EBITDA was 4%. So when you say bathware loss, it was EBITDA loss in 4Q only. Is that what you referred?

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : Yeah, I saw only for the new plan, not on a console but for basis, right?

Question: Rahul Agarwal - Ikigai Asset Manager Holdings Pvt. Ltd. - Analyst : All right. Got it. That helps. All right, sir, I'll connect later. Thank you so much.

Question: Udit Gajiwala - Yes Securities - Analyst : 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 using tile specific? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 10:30AM, KAJR.NS - Q4 2025 Kajaria Ceramics Ltd Earnings Call

Question: Udit Gajiwala - Yes Securities - Analyst : Understood. And so lastly, what will be the case that you income for the coming fest? That's it.

Question: Udit Gajiwala - Yes Securities - Analyst : Okay, INR250 crore. All right. Thank you, sir. All the best.

Question: Utkarsh Nopany - BOB Capital Markets Ltd. - Analyst : So my first question is on your CapEx plan. So like we have a pretty strong 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 GBD tile plant in Morbi? Can you please throw some light?

Question: Utkarsh Nopany - BOB Capital Markets Ltd. - Analyst : But even for the large slab GBT tile plant, you are of the view that there's an excess capacity in the market. So we are not intending to come up with a new plan? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 10:30AM, KAJR.NS - Q4 2025 Kajaria Ceramics Ltd Earnings Call

Question: Utkarsh Nopany - BOB Capital Markets Ltd. - Analyst : The second question is on your Tile, the margins in the March quarter. So even if we adjust the INR7 crore write-off related to the UK operation. Then also our Tilles EBITDA margin has come down to multi-year low level. So can you please explain the reason for sharp margin pressure in the

Question: Utkarsh Nopany - BOB Capital Markets Ltd. - Analyst : No, sir, what I'm asking is that your plywood losses you have shown it as part of discontinued operation. Now, if we adjust the INR7 crore right of related to UK also, then also your margin has come down. So what is the reason for that?

Question: Utkarsh Nopany - BOB Capital Markets Ltd. - Analyst : Sir, I'm talking about the Tile segment margin. It doesn't include the private segment.

Question: Utkarsh Nopany - BOB Capital Markets Ltd. - Analyst : All right. And lastly, on the Tiles export front, so like whether our understanding is correct that the Trump tariff issue is likely to weaken the global tiles demand, which in turn may further impact our tiles export from India. So can you please throw some light over there whether our understanding is correct or not?

Question: Udit Gajiwala - Yes Securities - Analyst : Okay. Thanks a lot, sir.

Question: Arun Baid - ICICI securities Limited - Analyst : So, while I understand you mentioned in near-term, you don't want to give a guidance. But sir, from a media kind of perspective, do we believe we go back to that doubled volume growth with our historical margins are about 15%, 16%? Do you believe that is something which we can, as investors, try to look at?

Question: Arun Baid - ICICI securities Limited - Analyst : No, I'm asking for guidance for FY26. I'm saying with the measures you are taking right now and --

Question: Arun Baid - ICICI securities Limited - Analyst : Okay, sir. Thank you.

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Sir, 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 you already reaping the benefits or incrementally do we expect something out of it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 10:30AM, KAJR.NS - Q4 2025 Kajaria Ceramics Ltd Earnings Call

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : And has this been implemented on a Pan-India basis or is it a certain pockets that we have implemented?

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Okay. 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 that we are looking at, or is it technology implementation, or is it the distribution widening thing that we're working on? What would be the single most important variable that --

Question: Ritesh Shah - Investec Bank (UK) PLC - Analyst : Sure, sir. Thank you so much for the answer. Wish you all the very best.

Question: Praveen Sahay - Prabhudas Lilladher Private Limited - Analyst : Just, if you can give any clarification on your INR250 crore-odd of a CapEx you are planning for '26. Is it only for maintenance or something else as well?

Question: Praveen Sahay - Prabhudas Lilladher Private Limited - Analyst : Okay, that's really helpful. Thank you, sir.