Kajaria Ceramics , India's leading tile manufacturer, has reported a significant improvement in its EBITDA margins for the first quarter, despite a slight decline in revenue. The company's strategic restructuring efforts and cost optimization initiatives have begun to yield positive results, even as it navigates through a challenging demand environment.

Financial Performance

Kajaria Ceramics posted a consolidated revenue of INR 1,104.00 crores for Q1, marking a 1% year-on-year decline. The company attributed this decrease to low tiles volume growth and the closure of its plywood division. However, the EBITDA margins saw a substantial improvement, rising to 16.72% from 15.00% in the same quarter of the previous year.

Strategic Restructuring

The company is implementing a major organizational restructuring by unifying its three separate tile divisions - ceramic, polished vitrified tiles (PVT), and glazed vitrified tiles (GVT) - into one integrated operation. This consolidation involves combining sales teams and distribution networks that previously operated independently.

Chetan Kajaria, Joint Managing Director, explained, "We are combining the teams together under a common head state-wise and getting more cost efficiency out there. A single representative will now go to a dealer and sell all three products in that basket."

Cost Optimization Initiatives

In a bold move to demonstrate commitment to cost reduction, the company announced that the promoters have foregone their salaries, which previously amounted to INR 17.00 crores annually. This sacrifice will continue until the company achieves a run rate of INR 1,000.00 crores EBITDA.

Sanjeev Agarwal, Chief Financial Officer, stated, "We are working on many issues like reducing the cost of our packing material, renegotiating our outsourcing material, and revisiting our raw material prices. All cost areas are being reviewed."

Growth in Other Segments

Despite challenges in the tile segment, Kajaria Ceramics is seeing growth opportunities in other divisions:

• The adhesives division is expected to grow from INR 75.00 crores to INR 120.00 crores this year.
• The Bathware division is targeting revenue of INR 480.00 crores, up from INR 400.00 crores previously.

Outlook and Strategy

The company expects minimal capex of INR 100.00-150.00 crores this year with no new capacity additions planned. The focus will be on optimizing existing resources and improving efficiency.

Rishi Kajaria, Joint Managing Director, commented on the market strategy: "We might need to reinvest back in the market to gain volume share. Our vision is to take market share as far as volume is concerned."

Conclusion

While Kajaria Ceramics faces a muted demand environment, its strategic restructuring and cost optimization efforts are showing promising results. The company's focus on unification, consolidation, and market share growth positions it well for when market conditions improve.

As the industry leader navigates through these challenging times, investors and market watchers will be keenly observing how these strategic initiatives translate into sustained financial performance in the coming quarters.

Kajaria Ceramics Limited , India's largest manufacturer of ceramic and vitrified tiles, has reported a mixed bag of financial results for the first quarter of fiscal year 2026. The company saw a slight decline in revenue but managed to significantly improve its profitability.

Financial Highlights

• Consolidated revenue stood at ₹1,104.00 crores, marking a 1% year-on-year decline from ₹1,114.00 crores in Q1 FY25.
• EBITDA margins improved significantly to 16.72% from 15.00% in the previous year's quarter.
• Profit after tax increased by 21% to ₹109.00 crores from ₹90.00 crores in Q1 FY25.

Operational Performance

The company attributed the revenue decline to low growth in tiles volume and reduced plywood sales due to the closure of its plywood division. However, Kajaria Ceramics maintained its position as India's largest ceramic/vitrified tiles manufacturer with an annual tile capacity of 90.50 million square meters across nine plants.

Cost Optimization Drives Profitability

Despite the slight dip in revenue, Kajaria Ceramics managed to improve its profitability through various initiatives:

• Focus on cost reduction
• Optimization of human resources
• Other corrective measures undertaken by the company

These efforts resulted in the significant improvement in EBITDA margins, rising from 15.00% to 16.72% year-on-year.

Financial Position

The company's net debt position improved to ₹515.00 crores as of June 2025, indicating a stronger financial footing.

Market Conditions

According to the company, overall market demand continued to remain soft during Q1 FY26. However, Kajaria Ceramics' focus on operational efficiency helped offset the impact of challenging market conditions.

Corporate Actions

The company reopened its trading window 48 hours after announcing the quarterly results on July 22, 2025. Additionally, Kajaria Ceramics granted 1,35,000 stock options to eligible employees under its Employee Stock Option Scheme 2015, with an exercise price of ₹800.00 per option.

Looking Ahead

While the company faces challenges in terms of market demand, its focus on margin improvement and cost optimization strategies appears to be yielding positive results. Kajaria Ceramics remains confident that its efforts will continue to drive efficiency as it moves forward in the fiscal year.

As India's leading tile manufacturer, Kajaria Ceramics' performance serves as an important indicator for the broader construction and home improvement sectors. The company's ability to improve profitability despite revenue pressures demonstrates its resilience and strategic adaptability in a challenging market environment.