Margin beat, volume growth nascent, capex-heavy pivot underway

Confirmed: Q1 delivered ₹1328.1 Cr (20.4% YoY). Management attributed to 6% volume + 11% pricing, with April soft due to Morbi shutdown.

Delivered 19.6% OPM vs 16.72% prior year—390 bps expansion. Guidance range 18–19% for full year already exceeded in Q1.

Management cited gas supply shocks in Morbi (GSPC-dependent, prices ₹48→₹86/SCM). Kajaria's North/South plants (GAIL/CGD-fed) insulated; only 10–11% price increase needed vs Morbi's 40–45%. Gap compression credible.

Q1 was 6% volume growth. Management cited April softness, May/June/July recovery, and 'breakthrough with two very big builders' providing new projects lever. Not yet proven at annual scale.

Q1 EBITDA: ₹260 Cr (19.6% × ₹1328). Run-rate ~₹1,040 Cr annualized. Credible if margins hold; contingent on volume delivery and gas stability.

Prior: No numeric volume target. Now: 'Double-digit growth for next 9 months.' Implies 10%+ from ₹118M sqm baseline vs prior quarter's 6% Q1.

Announced ₹375 Cr in two major tile plants (Srikalahasti ₹210 Cr, Gailpur ₹165 Cr) + ₹12 Cr renewable. Prior Q4 call mentioned brownfield expansion; now concrete capex phasing into FY27–FY28.

Prior: Disruptions from Morbi (vague). Now: Price gap 40%→20%, Kajaria can now compete on price without margin compression. Added 'project' lever alongside retail to capture institutional volumes.

Prior: EBITDA 18–19%. Delivered: 19.6% in Q1, beating range. Guidance for full year stays 18–19%, implying upside expectation for remaining quarters or conservatism.

Prior (implied): Scaling Kerovit. Now: Candid that FY27 'tough' for Bathware margins due to restructuring; expects better in FY28. Not a cut but realistic reset.

Prior: Not explicitly discussed. Now: Management targeting 40% outsourcing this year (from 30%) to hit 130M sqm sales; will reduce when capex comes online next year. Tactical transparency.

Gas prices in Morbi (GSPC-fed) spiked 48→86–88/SCM post-war; Kajaria raised prices 40–45% in Morbi plants. North/South plants (GAIL/CGD) raised 10–11%. Gap narrowed; situation volatile with war.

April soft, May–July strong. Distribution network strengthening. Breakthrough with two 'very big builders' getting lion's share. Projects are new growth lever alongside retail.

Srikalahasti: new shed (₹80–90 Cr). Gailpur: existing shed extended (₹40–50 Cr). Same latest plant technology. Kiln size increase (200m → 340m). Capex-efficient vs prior 5–6 MSM for ₹150–160 Cr.

Blended ₹71/SCM Q1. North ₹64, South ₹72–73, West (Morbi) ₹85. Spot at ₹85. Complex mix; cannot predict tomorrow (war dependent).

Exports down to ₹1,000 Cr/month (vs ₹16,000 Cr FY26) due to freight cost shock. Kajaria targeting 40% outsourcing for 130M sqm sales; will drop when capex online.

Unrelated. Project launch to tile usage is 4–5-year cycle. Growth is unification, Morbi price convergence, distribution strength, project wins—not RE cycle.

Irrelevant; company makes & sells complete volume. GVT dominant in market now. Company doesn't track mix.

Not uniform. North/South: 12–13% increase. Morbi plants: much higher due to gas shock. Price differential Kajaria/Morbi was 40%, now 20%.

Correct. Confident of double-digit growth + 20% value growth for full year.

Bathware 'tough year' due to restructuring, new CBO. Tiles good margin. No sanitaryware margin guidance given. Blended 18–19% for company.

Based on May–June–July momentum, project pipeline, distribution expansion. Full-year revenue growth ~20% implied (10% vol + 10% value).

Supports double-digit growth thesis; capex (21 MSM new plants) will absorb higher volumes in FY28. Outsourcing 40% this year.

Q1 already at 19.6%, exceeding range. Guided range implies some margin pressure in remaining quarters (gas volatility, outsourcing cost) or conservatism.

Tiles carrying blended margins. Bathware restructuring headwind; no specific guidance given. Improvement expected FY28.

₹210 Cr + ₹165 Cr announced; spillover into FY28. Renewable energy ₹12 Cr. Higher capex intensity expected this year vs prior.

Capex to be fully commissioned by April 2027. Will reduce outsourcing dependency from 40% to lower levels and drive margin accretion.

Morbi cluster (GSPC-fed) gas spiked 48→88/SCM post-28 Feb 2026 war. Kajaria exposed to mix of GAIL, CGD pricing. If sustained, pricing power erodes and customers defect to cheaper Morbi peers.

Q1 volume +6% (soft April; May–July recovery unspecified in numbers). Management gave 'double-digit' guidance for 9M based on May–July trend and project pipeline. No binding customer contracts cited. If April weakness recurs or project deals fall through, volume growth stalls and ₹1,000 Cr EBITDA target missed.

₹375 Cr capex announced (Srikalahasti ₹210 Cr, Gailpur ₹165 Cr) to add 21 MSM by Q1 FY28. Part of capex spills into FY28. Kajaria targeting 130M sqm sales (from 118M) via these plants, but execution risk is material. If volume growth disappoints, new plants will run under-utilized, dragging ROI and margins. Additionally, outsourcing dependency at 40% FY27 will incur lower-margin outsourced volumes.

Kerovit (Bathware) grew ₹122 Cr (+33% YoY) in Q1 but management flagged 'tough year' on margins due to restructuring. New CBO hired April. Acquisition of 15% stake from Aravali (full control) adds integration headwind. Blended company guidance (18–19% EBITDA) is propped up by Tiles; if Bathware margin deteriorates further or ramp-up stalls, blended profitability will suffer.

April FY27 was soft due to Morbi manufacturing shutdown (5 Mar–15 Apr), dealer pre-lifting before price hike, and labor shortage (elections + LPG shortage). May–July recovery attributed to normalized supply and seasonal construction pickup. If macro cools (rate hikes, construction slowdown, RBI tightening) or supply disruptions recur, April-like softness may re-emerge and derail full-year volume guidance.