Kajaria Ceramics Q1 FY27 Results (NSE: KAJARIACER)
Signal: Margin expansion
The read
Q1FY27 saw a sharp inflection: consolidated OPM expanded 500bps YoY to 17.3%, marking the 4th consecutive quarter of margin expansion (from 11% in Q4FY25 to 18% in Q2FY26, 17% in Q3FY26, 19% in Q4FY26). Revenue growth of 20.4% YoY was led by volume recovery in tiles (+17.5%) and strong traction in 'others' (adhesives/bathware). The input cost tailwind (raw materials % down 440bps) and operating leverage (employee cost % down 190bps) combined to drive PAT growth of 55%. The board also approved a ₹165 Cr capacity expansion (11 MSM glazed vitrified tiles at Gailpur), signaling demand confidence. The post-period ₹296.7 Cr buyback is EPS-accretive.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,328.08 Cr | 20.4% | -3.3% |
| EBIT | ₹230.28 Cr | 42.8% | |
| Net profit | ₹171.03 Cr | 55.0% | |
| EPS | ₹10.64 | 55.6% | |
| EBIT margin | 17.3% |
P&L walk
Revenue grew 20.4% YoY led by volume recovery in tiles (+17.5% segment revenue growth) and strong performance in 'others' segment (+45%). Operating margin expanded 500bps YoY to 17.3% — driven by lower raw material costs (cost of materials as % of sales fell 440bps to 19.0%) and operating leverage (employee cost % fell 190bps, power & fuel % flat). Finance cost fell 3.7% YoY despite higher capex. PAT grew 55% YoY, tracking EBIT growth. EPS of ₹10.64 grew in line with PAT.
Key positives
- Consolidated revenue ₹1,328 Cr, +20.4% YoY — strongest growth in six quarters, led by tiles (+17.5%) and others segment (+45%).
- OPM expanded 500bps YoY to 17.3%, driven by lower raw material costs (cost of materials % down 440bps to 19.0%) and operating leverage.
- PAT ₹171 Cr, +55% YoY; EPS ₹10.64, +55.6% YoY — earnings growth outpaced revenue on margin expansion.
- Board approved ₹165 Cr capex for 11 MSM expansion at Gailpur (GVT capacity), funded via internal accruals — demand confidence.
- Buyback of 21.5L shares at ₹1,380 completed post-quarter — reduces equity base and is EPS-accretive.
Key concerns
- Sequential revenue declined 3.3% QoQ — seasonality typical in Q1 (post-Q4 construction peak).
- Power & fuel cost as % of revenue rose 410bps QoQ to 20.4% — may reflect higher gas costs; YoY was flat.
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