Kajaria Ceramics Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Kajaria Ceramics Ltd trades at ₹1,226, in a confirmed uptrend and 16 weeks into that stage. That is +8.0% against its own 200-day average. It sits at 93% of a 52-week range of ₹885 to ₹1,253. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 13 straight weeks.

Today the stock is in a confirmed uptrend — week 16 of stage 2, confirmed. At ₹1,226 it trades +8.0% versus its 200-day average and sits at 93% of its 52-week range (₹885–₹1,253).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +164% while the NIFTY 500 moved +267% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 13 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Kajaria Ceramics Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: Not stated in the research file. Our fortnightly research layers last read it on 22 August 2026.

Our read, 22 August 2026. Kajaria recovered from a low-margin correction year and now carries India's largest tiles brand into a capacity expansion phase — but the current margins are near a 10-year peak and any Morbi recovery will test whether the earnings growth is real or borrowed from competitors.

What is proven. Kajaria recovered from a low-margin correction year and now carries India's largest tiles brand into a capacity expansion phase — but the current margins are near a 10-year peak and any Morbi recovery will test whether the earnings growth is real or borrowed from competitors.

What is not proven yet. Morbi operational plant count rising above 250 plants by the Q2 FY27 results call — that would confirm the supply shock is reversing faster than management's estimate and would compress Kajaria's pricing advantage, likely pulling OPM back toward 16-17% and pushing the effective PE to the 40th-plus percentile at current price.

🚨 What would change our mind. Morbi operational plant count rising above 250 plants by the Q2 FY27 results call — that would confirm the supply shock is reversing faster than management's estimate and would compress Kajaria's pricing advantage, likely pulling OPM back toward 16-17% and pushing the effective PE to the 40th-plus percentile at current price.

Layer 1 read, 22 August 2026 — KEEP. Margin bottomed at 11% and has doubled to 20%, yet the share price is lower than a year ago. Kajaria's profit per share went from Rs 2.67 in the March 2025 quarter to Rs 10.64 in the June 2026 quarter as operating margin recovered from a decade-low 11% to 20%, with revenue up 20% and volumes up 6%. The market has not paid for it: the shares are down 5% over twelve months and the multiple sits at 33.4x against a ten-year median of 42.8x. The cause is nameable and specific — a gas-price crisis shut roughly 70% of the small unbranded tile makers in Morbi, letting Kajaria raise prices 12-17% while they were forced to raise 35-40% — and it is also the thing that can be taken away, which is why I treat only part of the margin as permanent. Note the valuation number honestly: 33.4x is a…

What would change Layer 1’s mind. Morbi's operational plant count climbing back above 250 by the Q2 FY27 call, or operating margin printing below 17% in any single quarter before the Rajasthan plant starts — either would show the pricing window shut before the new capacity arrived to occupy it, and would put Rs 400 Cr of capex into a falling-margin market.

Layer 2 read, 22 August 2026 — ADVANCE. Supply spending is retreating while Kajaria's earnings turn, but Morbi's restart keeps the pass conditional. Kajaria's revenue, operating margin and profit rose together in the June quarter, while the external capital block shows falling sector capex and construction-in-progress [sector_capital_flows:Ceramics/Tiles/Sanitaryware]. A live fallback reports broad Morbi restart and therefore challenges the old low-plant-count claim, but the later July call still described Morbi sourcing as unavoidable, so the external test narrows conviction without killing the thesis.

What would change Layer 2’s mind. Flip ADVANCE to DROP if Morbi's broad restart is accompanied by lower fuel costs and Kajaria reports operating margin below 17% before owned capacity removes its Morbi dependence.

Layer 3 read, 22 August 2026 — DEPLOY. Morbi has restarted, but high gas costs and weak orders keep Kajaria's advantage alive for now. Stream 5 ALIGNS with Timeline R1 because 250-300 Morbi units restarted, but only on costly gas and with thin orders. July management still said Morbi outsourcing was unavoidable, so this is not yet a full thesis break. The old subsidiary fraud remains a LOW control risk, while two guidance reversals keep management on WATCHLIST.

What would change Layer 3’s mind. A Q2 FY27 source confirming more than 250 Morbi plants remain economically viable with normal order books would flip DEPLOY to BENCH.

CIO read, 22 August 2026 — BENCH. NOT ADMITTED (incoming, benched) · forward-asymmetry 74/100 · CONTESTED. Judged EPS growth of 20.0% narrowly covers the model-implied 19.7%, leaving a derived +0.3-point gap. The 33rd-percentile rating leaves room, but two guidance-policy reversals and the live Morbi restart risk require a slot fight.

The test written in advance. Morbi recovery compresses the pricing window — Morbi recovery compresses the pricing window by the next result.

The test written in advance. Peak-margin value trap — normalised PE is 42nd percentile, not 17th — Peak-margin value trap — normalised PE is 42nd percentile, not 17th OPM below 17% in any of the next three quarters signals margin reversion starting ahead of volume-led EPS growth. by the next result.

🚨 What the surface reading misses. The surface reading is: OPM at 19.6% and expanding is near the peak of a 10-year range — a high score on margin quality The research reads it further: OPM at the 83rd percentile is near-peak, not mid-cycle. The mid-cycle normalised rate is 15.9%. The current level is sustained by the Morbi pricing asymmetry — a structural disruption, but one that will partially normalise as Morbi restarts. The 23% gap between current and mid-cycle OPM is the embedded margin risk.

🚨 What the surface reading misses. The surface reading is: Trailing PE at 17th percentile of 10-year history = historically cheap The research reads it further: The cheapness is conditional. OPM at 83rd percentile inflates the earnings denominator by ~13% versus mid-cycle. At normalised OPM of 15.9%, EPS falls from Rs 34.28 to Rs 29.79 and the effective PE rises from 33.4x to 40.6x — at the 42nd percentile. The 25-point percentile gap between how cheap this appears (17th) and how cheap it truly is (42nd) at normalised margins is the single most important arithmetic feature of this stock right now.

Lever 1 · Operating leverage — BUILDING. Post-unification efficiencies delivered Rs 150 Cr per year in savings, and revenue growth of 18-20% now drops incrementally to margin at a much higher rate than the correction years. What proves it keeps working: Operating leverage off the post-unification base. It stops working if Volume growth stalls below 8% for two consecutive quarters, removing the incremental fixed-cost leverage that explains the margin expansion beyond Operation Manthan savings.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Kajaria Ceramics Ltd reported ₹1,328 Cr of revenue in the Jun 26 quarter, +20.4% year on year. That is the 12th straight quarter of year-on-year growth. Over 10 years it has compounded at 7.2% a year. The last full year, FY26, came in at ₹4,830 Cr. The last four reported quarters add to ₹5,055 Cr.

FY26 revenue came in at ₹4,830 Cr (+4.2% on the year), capping 10 years at 7.2% compound. The latest quarter (Jun 26) printed ₹1,328 Cr, +20.4% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +8.6% growth against the decade's 7.2% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +8.5% over the last 4 quarters against +5.1%/yr over the last 8 — accelerating; TTM profit +72.3% vs +14.9%/yr — accelerating.

FY26-Q4. revenue ₹1,373 Cr and profit ₹157 Cr as reported.

FY27-Q1. revenue ₹1,328 Cr and profit ₹171 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Kajaria Ceramics Ltd's operating margin is 20.0% in the Jun 26 quarter, +3.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 14.0% to 20.0%. The current quarter sits inside that band.

Why this happened. The operating-leverage catapult is active: fixed costs (plant depreciation Rs 169 Cr FY26, administrative headcount already rationalized) are installed; each incremental revenue rupee flows at the variable margin rate. Q1 FY27 OPM of 19.6% on Rs 1,328 Cr revenue versus Q1 FY26 OPM of 17% on Rs 1,103 Cr revenue confirms the fixed-cost leverage is working. The unification removed three parallel sales teams that were approaching the same dealer set with different product categories — that inefficiency is gone and the dealer addition rate is now net-positive.

The latest quarter's operating margin is 20.0%, +3.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 14.0%–20.0%.

Why the margin moved: operating margin went +2.7 pp year on year while gross margin went +0.0 pp — the gain came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

FY26-Q4. revenue ₹1,373 Cr and profit ₹157 Cr as reported.

FY27-Q1. revenue ₹1,328 Cr and profit ₹171 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Kajaria Ceramics Ltd earned ₹171 Cr of net profit in the Jun 26 quarter, +55.5% year on year. It is the 5th consecutive quarter of growth. Full-year FY26 profit was ₹487 Cr. The 10-year compound rate is 7.5%. That is 12.9% of the quarter's revenue. The same quarter a year earlier earned ₹110 Cr.

Jun 26 profit was ₹171 Cr, +55.5% year on year — the 5th consecutive quarter of growth. On the full year, FY26 printed ₹487 Cr (+62.3%), and the 10-year compound rate is 7.5%.

Why profit moved: revenue contributed +20.4% and the margin +3.0 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +96.3% vs revenue +8.6%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q4. revenue ₹1,373 Cr and profit ₹157 Cr as reported.

FY27-Q1. revenue ₹1,328 Cr and profit ₹171 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 145% of Kajaria Ceramics Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹664 Cr of operating cash against ₹487 Cr of profit. After ₹137 Cr of capital spending, ₹527 Cr was left as free cash.

FY26: operating cash of ₹664 Cr against reported profit of ₹487 Cr, leaving free cash of ₹527 Cr after ₹137 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 145% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 145%: the cash cycle tightened 18 days between FY21 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: the bigger cash user is investment — capital spending ran 1.5× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Kajaria Ceramics Ltd's cash conversion cycle runs 92 days in FY26, down from 110 days in FY21. Capital spending ran ₹747 Cr over the last 3 years. At FY26 sales of ₹4,830 Cr each day of that cycle holds about ₹13.2 Cr, so roughly ₹1,217 Cr sits inside the business at any moment.

Why this happened. The Morbi gas crisis is the dominant near-term catalyst. At the Q4 FY26 call, management said 150-160 plants would be operational versus 500-600 pre-crisis — a 70% reduction. At Q1 FY27, Morbi outsourcing is still necessary because Kajaria's own capacity is at full utilisation. The narrowing of the price gap from 40% to below 20% versus Morbi players is a structural shift in customer perception — once brand loyalty is established during a supply shortage, it does not fully reverse when supply normalises.

FY26: debtors at 47 days, inventory at 105 days — roughly 3.5 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 92 days, tighter than FY21's 110.

The full loop: cash goes out to suppliers and production on day 0; stock waits 105 days to sell; customers pay about 47 days after that; and suppliers themselves are paid at 61 days — netting out to the 92-day cycle.

In money terms: at FY26 sales of ₹4,830 Cr, each day of the cycle holds about ₹13.2 Cr — so the 92-day loop keeps roughly ₹1,217 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹747 Cr over the last 3 fiscal years against ₹482 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹119 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Kajaria Ceramics Ltd earns a ROCE of 23% in FY26. That is up from a trough of 17% in FY25. Return on invested capital clears the cost of that capital by +8.6 percentage points, so growth here adds value rather than only size. The wiring behind it is 10.1% net margin on 1.20× asset turns.

FY26 ROCE is 23%, recovered from a FY25 trough of 17% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 10.1% net margin × 1.20× asset turns × 1.31× balance-sheet leverage ≈ 15.9% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 20.6% − 12.0% = a +8.6 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Kajaria Ceramics Ltd carries total debt of ₹229 Cr against shareholder equity of ₹3,130 Cr as of Mar 26, a debt-to-equity of 0.07 — effectively unlevered. On the annual view that ratio went from 0.08 in FY22 to 0.07 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹229 Cr against shareholder equity of ₹3,130 Cr — a debt-to-equity of 0.07. On the annual view, debt-to-equity went from 0.08 (FY22) to 0.07 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Foreign institutions cut 4.6 points of Kajaria Ceramics Ltd over 8 quarters, the biggest move on the register. That takes foreign institutions to 11.6% of the company. Domestic institutions moved −1.6 points over the same window, to 26.2%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: −4.6 points over 8 quarters to 11.6%; Domestic institutions: −1.6 points over 8 quarters to 26.2%; Promoters: +0.2 points over 8 quarters to 47.7%.

🚨 Why the register moved: foreign institutions drove it (−4.6 points), alongside domestic institutions (−1.6 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Kajaria Ceramics Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Kajaria Ceramics Ltd trades at 33.4× P/E, near the bottom of its own range — cheaper only 17% of the time. Its long-run median P/E is 42.6×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 33.4× is near the bottom of its own range — cheaper only 17% of the time, against a long-run median of 42.6× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +64.9% against a +0.1% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +0.6%/yr price move, ~+8.8%/yr came from earnings growth and ~−8.2 pp from the multiple (compressing); over 10y, of the +6.1%/yr price move, ~+8.7%/yr came from earnings growth and ~−2.6 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is low against its own past, so the story rests on the earnings line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 23 August 2026 price, Kajaria Ceramics Ltd was paying for profit growth of about 19.7% a year. Profit itself has compounded 7.5% a year over the past 10 years. Today the market pays 33.4× P/E, the 17th percentile of its own 11-year range.

What the two numbers say together. The multiple is low against its own past, and the growth the price is paying for is far above what this company has actually delivered. A multiple that looks low because earnings fell is not the same thing as a low bar to clear.

How to hold this number: it is a reading of one day's price, taken on 23 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 11 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Improving Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Kajaria Ceramics Ltd reads as improving on its fundamental arc. Improving — profit growth bottomed 4 quarters ago at −23.4% and has held its recovery at +72.3%, ROCE lifting at 21.9%. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: a sustained climb off the trough is the setup this page is built to catch — the question moves to what you pay for it.

4-Factor Sector Score

76.3/100 — rank 1 of 6 in Ceramics/Tiles/Sanitaryware · 97% evidence confidence

Kajaria Ceramics Ltd scores 76.3 out of 100 against the 6 companies it is compared with in Ceramics/Tiles/Sanitaryware, ranking 1. Confirmed research leader: earnings, capital efficiency and relative strength agree. Move to management, catalyst and risk diligence.

The four contributions add to the total exactly: 23.1 + 22.7 + 11.1 + 19.4 = 76.3. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Kajaria Ceramics Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Guidance Policy Reversal · 31 July 2026. In Apr 2026, management explicitly asked investors not to expect guidance, but in Jul 2026 it issued a specific double-digit volume outlook for the next 9 months. This is a material change in the company's stated communication and confidence posture, with no reconciliation of the earlier no-guidance position.

Major Capex Strategy Reversal · 31 July 2026. In Jan 2026, management said it did not expect major capex for the next one to two years. In Jul 2026, it announced an FY27 capex plan of roughly Rs.400 crores for two capacity projects, representing a sharp change in capital allocation and capacity strategy that management did not reconcile with its prior position.

Kerovit Stake Status Changed · 31 July 2026. In Apr 2026, management stated that the remaining 15% Kerovit stake had already been bought for INR50 crores. In Jul 2026, management described the same stake as a decision to acquire, making the transaction status and associated cash outflow unclear without an explanation.

EBITDA Margin Guidance Band Revised Upward Without Explicit Acknowledgment · 30 April 2026. In Jan 2026, management guided to a 17-18% EBITDA margin band as the explicit forward-looking steady-state range. The Apr 2026 call stated a new guidance range of 18-19% without acknowledging that the prior band had been revised or explaining what structural change warranted the upward shift. A 100 basis point move in the floor of the guidance range is material for valuation models, and the absence of any reconciliation with prior guidance prevents analysts from understanding whether this reflects a durable structural improvement or is contingent on the temporary Morbi disruption environment.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions