Asian Granito India Limited (AGL), a prominent player in the building materials industry, has announced a strategic move to diversify its portfolio. The company's board has approved the acquisition of a 26% equity stake in the newly incorporated Allomex Steel Private Limited (ASPL) for a cash consideration of Rs. 26,000.

Strategic Expansion

This acquisition marks AGL's entry into the steel manufacturing sector, a move aimed at complementing its existing building materials business. The company sees this as an opportunity to leverage synergies between its current operations and ASPL's steel manufacturing activities.

Transaction Details

The key details of the acquisition are as follows:

Rationale Behind the Acquisition

AGL's decision to invest in ASPL is driven by several strategic considerations:

1. Product Diversification: The move allows AGL to enter related building material products, expanding its offerings in the construction sector.
2. Growth Support: The acquisition is expected to support AGL's overall growth plans by integrating steel manufacturing capabilities.
3. Synergy with Existing Operations: ASPL's steel manufacturing activities are anticipated to complement AGL's existing project customer base.
4. Supply Chain Enhancement: The company aims to boost its operations by leveraging its existing supply chain network.

Financial Context

To put this acquisition in perspective, let's look at some key financial metrics of Asian Granito India Limited:

The company's growing asset base and stable shareholder capital indicate a strong financial position, providing a solid foundation for this strategic expansion.

Outlook

While the immediate financial impact of this acquisition may be limited due to ASPL's recent incorporation, AGL views this as a long-term strategic move. The company expects this investment to strengthen its position in the building materials sector and create opportunities for long-term growth acceleration.

As the steel manufacturing activities of ASPL mature and integrate with AGL's existing operations, stakeholders will be keen to observe how this diversification strategy unfolds and contributes to the company's overall performance in the coming years.

Asian Granito India Limited (AGL), a leading manufacturer of tiles and bathware solutions, has reported a robust financial performance for the second quarter ended September 30.

Financial Highlights

Q2 Performance

• Consolidated revenue: ₹406.92 crore, up 8.2% year-over-year
• EBITDA: ₹36.64 crore, a 148% increase year-over-year
• EBITDA margin: 9%, up from 3.93% in the previous year
• Consolidated net profit: ₹16.71 crore

H1 Performance

• Consolidated revenue: ₹795.17 crore, up 8% year-over-year
• Consolidated net profit: ₹23.95 crore

Operational Performance

• Q2 export sales: ₹64 crore, down 17% year-on-year
• H1 export sales: ₹127 crore

Strategic Developments

• Board approved disposal of 25% shareholding in AGL Proteins Private Limited
  • Reduces AGL's stake from 51% to 26%
  • Converts AGL Proteins from a subsidiary to an associate company
  • Shares to be acquired by existing shareholder Mr. Prince Patel (non-promoter group)
• Approved increased capital contribution in Harmony Surfaces Thailand Limited
  • Wholly owned subsidiary incorporated in June 2024
  • Aims to support business operations and international expansion
• Launched Enhanced Strategic Integration Programme (ESIP)
  • Long-term vision of achieving ₹6,000 crore in total revenue
• Appointed Bollywood actor Ranbir Kapoor for "Premium ka Pappa" campaign

Management Commentary

Kamlesh Patel, Chairman and Managing Director of Asian Granito India Limited, stated: "We are delighted that the composite scheme of arrangement approved by the NCLT has now become effective — a significant milestone for the company. Our Q2 performance reflects our strength — driven by operational discipline and a clear focus on sustainable growth. With expansion of our retail and global footprint, launch of powerful brand campaigns we aim to become a truly global brand and achieve revenue target of Rs. 6,000 crore over the next 4-6 years."

Future Outlook

Asian Granito India Limited continues to focus on:

• Operational efficiency
• Brand strengthening
• Strategic expansion

The company aims to position itself as a leading player in the luxury surfaces and bathware solutions market, with a presence in over 100 countries and an extensive distribution network across India.

The company has authorized key managerial personnel for determining materiality and making stock exchange disclosures. Asian Granito operates in tiles, marble, quartz, and bathware segments.

Investors should note that the implementation of some projects, including the setting up of a display center in Ahmedabad, has faced delays due to various factors.