Kajaria Ceramics Limited (KAJARIACER) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Kazaria Ceramics Ltd. Q1F27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is recorded. I now hand the conference over to Mr. Pranav Mehta from Equius Securities Pvt Ltd. Thank you and over to you, sir.

Yeah, thank you so much. Good evening, everyone, and thank you for joining this call. From the management side, we have Mr. Ashok Hajariya, Chairman, Mr. Chetan Hajariya, Vice Chairman, Mr. Rishi Hajariya, MD, and Mr. Sadio Adarwal, CFO. I'll hand over the call to Ashok sir for his initial report, which will have a question and answer. Yes, sir. Over to you.

Thank you, Pranav. Good evening, everyone. It gives me great pleasure to welcome you to the quarter one to FY27 running conference call of Kajaria Ceramics Limited. Joining me on this conference call is the senior management team of Kajaria Ceramics. In spite of the recent geopolitical disruption in the Middle East, coupled with a more favorable demand supply environment for the ceramic tile industry in Morbi, We remain optimistic about our business outlook for the year F527. The performance in quarter one F27 has broadly well indicated our expectations and provides a strong foundation for the year ahead. In quarter one F27, we achieved a 6% year to year volume growth in spite of soft effort. However, consolidated revenue grew by 20%. to Rs. 1,628 crores compared to the corresponding quarter last year, mainly due to increase in selling prices because of fuel impact. EBITDA margin for the quarter stood at 19.60%. Apart from a brownfield expansion of 10 million square meters, the Kalahatsi manufacturing facility announced last quarter. We have also decided to put up a further 11 million square meters line at our Gelpur Rajasthan facility that will deliver cost-effective, high-quality products. Beyond tiles, two verticals are evolving from adjacent scenes into pillars. Karovit, our bathware brand, is scaling with purpose. The decision to acquire the remaining 15% stake from Raveli Investment Holdings is an unambiguous statement of long-term commitment to building a market-leading bathroom solutions brand. Our adjacent business is on track to grow at a much faster pace. As a price differential between national branded players, As their informal counterparts are narrow, a consumer preference is expected to shift decisively towards branded products. A circular tailwind that positions Tegariya in February going forward. Looking ahead, we remain confident that the company is well positioned to sustain quality growth and create long-term value for all stakeholders. Let me review this quarter segment-wise financial performance. Tile segment revenue grew by 18% year to year. At Rs. 1,162 crores in Q1-27 compared to Rs. 986 crores in Q1-26. March 12th segment registered a 33% growth in revenue, reaching Rs. 123 crores in Q1-27 compared to Rs. 91 crores in Q1-26. Revenue from the adjacent grew to 45 crores in Q1 F27 as compared to Rs. 25 crores in Q1 F26. EBITDA improved in Q1 F27 to 19.60% as compared to 16.72% in Q1 F26. Profit before, share of profit lost from JB, exceptional items and tax grew to rupees, 230 crores, and quarter one F-27 as compared to rupees. And we will continue to focus on a lean working capital cycle going forward. With this, I take this opportunity, thanking you for joining us today. Over to Monday, please.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the customer's telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Praveen from PL Capital. Please go ahead.

Thank you for the opportunity and many congratulations for a very good set of numbers. My first question is related to the pricing. As you also highlighted, there is the price hike and the overall 11% of increase in the realization. So can you give us some more color on that? How much is the, you know, actually in the segment, why is the price hike you have taken and the way forward also where you are seeing this price hike to continue it?

See, two things have happened after the war on 28th of February. The prices of gas at Morbi went up drastically because DSPC is the only supplier. In, as far as Kajaria is concerned, we have three plants in Morbi. We have three plants in North and two plants in South. In North, we are taking the gas from them. In South, we are taking gas from two CGT companies. One is thin gas and the other is another CGT company. What has happened in Morbi, the gas prices went up from literally about 48 rupees to 86 to 88 rupees per SEM, whereas in Norbi price hike was approximately about 10 percent, 10 to 12 percent. As a result, the cost increase in Morbi was much more than what has happened in Norbi. In Morbi, they have increased prices by almost 40 to 45 percent. In north and south from our plants, which we are manufacturing, we have raised prices by anywhere between 10 to 11 percent. As a result, the gap has come down drastically. So that's the current situation. As we all know, gas market is very volatile with the war still on. One day there is no war, second day the war is on. And the situation is very, very volatile. Looking at that, we'll keep watching and see what happens. But the situation as of today is very positive as far as Kahari is concerned because of the multi-locational plans that we have.

Perfect. Second question related to that is the volume, 6% of the growth in the volume we are seeing, and still there is a lot of volatility in terms of the gas supply and all we are seeing. So where you are seeing this volume growth to be in the next nine months?

You see, if you recall, last two quarters we have not given any volume guidance, but this year with a lot of confidence we are saying that next nine months we will have a double-digit growth, double-digit volume growth.

Okay. Okay. That's good to hear, sir. Last question is related to the CAPEX because two CAPEX announcements happened for a 210 crore and 165 crore. And also there is a renewable acquisition of a 12 crore. So can you give a 27 and 28 CAPEX how much is going to be out of a 387 crore of a total CAPEX of all these and also the maintenance papers?

This year we are looking at a capex of roughly 400 crores, because part of the capex which we are doing in two plans, partly will come here, partly will come next year. This year the capex plan is roughly about 400 crores.

Okay, okay. So there is some maintenance capex included in this?

All included, all included, all included.

Thank you, sir, and all the best for future. I'll fall in the queue.

Thank you. Thank you.

Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.

Thank you for the opportunity. Sir, it's heartening to see you giving double-digit volume growth guidance after a long given sum guidance. Just want to firstly understand from where this confidence is coming, what are you, you know, what insights you are getting it from throughout. And secondly, July also we have seen a similar trend.

Hi, this is Rishi Kizaria. So, as we said, our April was a little soft, but May and June, we did have a good volume growth, and the same trend continues in July. So, at one side, we are strengthening our complete distribution strength, and also another lever for growth, which we have now really started working on, is projects, which will give us that additional volume. Like, I will not... Just to give you the information that we have just had a major breakthrough with two of the very, very big builders of India, where we are getting a lion's share. So looking at the distribution strength of ours and this additional labor of projects, we feel that we are bound to do a double-digit growth this year. That gives us a confidence.

Understood. And secondly, how are the margins looking this year? And this quarter year, we'll get to, you know, set the 250 crore EBITDA mark. Possibly, can we hit a 1,000 crore mark this year? And by then, the promoter will be taking the, you know, promoter demineration, which you, a few quarters, you take a call. We don't want to take it.

So, this, so we are looking at EBITDA margin about 18 to 19% for the entire year. In the first quarter, we already got a 19.6%. So we are quite confident that we will look at those numbers for the entire year. We are looking at a 1000 crore plus EBITDA overall.

Just a small clarification by EBITDA, you include other income or not? And secondly, as you will hit a 1000 crore mark, possibly next year, the promoter will start withdrawing the remuneration?

We have a little safe. Our direct other income is not part of EBITRETA, it's operating EBITRETA, and promoters in the last phone call have already clarified that they are not going to take salary for this financial year.

That is helpful. Thank you, sir.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on the touchstone telephone. Reminder, anyone who wishes to ask a question may press star and one on the touchstone telephone. The next question is from the line of Sneha from Nuwama. Please go ahead.

So, good evening, team, and thanks a lot for the opportunity. A couple of questions from my end. First, you wanted to gauge how was the demand on grants, and you said that April was weak, and, you know, May and June recovered. Could you help us with the understanding where was it, you know, maybe region-wide breakup, Tier 1, Tier 2, Tier 3, or was it a broader slowdown, and what are the reasons according to you, and are we seeing, you know, pickup back again in the current month?

See, April was soft for three reasons, and we all are aware why it was soft. One, there was the total shutdown of Morbi in the month of April, number one. The Morbi manufacturing closed on 5th of March and was literally closed till 15th of April. Some plants started only. 10% of the plan started in the month of April, mid-April, 16th of April. So maybe there was a total stock, number one. Number two, in the month of March, all the dealers across India lifted something more quantities for a simple reason that they knew that the prices will go up from 1st of April. And third, there was a labor shortage across the country for two reasons. One, was elections around in the country, and secondly, there was an LPG shortage. So they all went back to their destination and said, let this problem ease out and we'll come back again. So these are the reasons. Already in the month of May and June, things have started positively, and so is in the month of July, which is just about to close. So demand at the local, at the normal level in the domestic market is very, very looking, very optimistic.

That's great to hear. Second question is regarding CAPEX. We've seen you renewed CAPEX, you know, you all are, you know, putting up additional CAPEX in your own facilities. Where is optimism coming up from? Because earlier the thought was largely, you know, to take it from JV root, from worthy or even, you know, outsourcing. What is the kind of, you know, margin differential, let's say, between your own plans and JV and, you know, which model is working better and why?

Hi, Chetan here. So, we have two capexes coming up, which we announced. First is the Shrikalastri expansion in south at a cost of 210 crore, which we announced at the last board meeting. And second is the expansion at our Bivadi factory in Rajasthan at a cost of 165 crore, which will happen in this financial year and this will be over to by April 27th to be completed. So, these are the two major capexes we are looking at for increasing our sales. What was your second question, sir?

Sir, we just wanted to understand why Saturn's new APEX interest? What sort of margin difference do we make between the Moribh manufacturing as well as the South or the North manufacturing?

The thing is that at this time, this is a new technology, this is the latest front we are putting both at Shrikala Asti and Gailpur, where the capex is much lower than what we used to do earlier. So the turnover which we will be getting from both the capex will be more than two times. And the OPEX, and it will be not only the CAPEX efficient, but also the OPEX efficient, the cost of production will also be lower. So incrementally, there will be highly ROC accretive, and we will get much more margin what we are getting even in our existing manufacturing facility.

Understood. So this was quite helpful. Thanks. Thanks, Nothra.

And one more thing that, see, the decision of putting up the plant and outsourcing is also based on the geography. So we are finding good demand in north, so catered to the northern demand, we have to put up, we are putting up the plant, and this plant, we are putting up 10, 11 million plants for 165 crore, which will give us a turnover of more than 400 to 450 crore, which is a better margin. Outsourcing we will use to utilize our full capacity, but going forward, as we have to grow, we aim to grow in double digits, so it will help in meeting the sourcing requirement from these two plants.

Thank you. Thank you so much. All the best.

Thank you. The next question is from the line of Disha from Trinitra Asset Managers. Please go ahead.

Thank you for the opportunity. Just a couple of questions from my side. How is the demand tracking across the retail channels versus the institutional sales? And is there any real estate link demand that you are seeing is currently a key growth driver? And is there any sign, acceleration or softness in this current quarter?

So, as I mentioned before, the demand is coming from both retail as well as institutional. Our focus was less on institutional earlier, but now we are focusing on both the segments together to get a better growth volume. So, we are strengthening our distribution and dealer network as well as we are being aggressive in projects to gather more market share.

Thank you, sir. And one more question that what's the current export contribution to revenues and is there any change in the strategy given that there is a global trade uncertainty and tariff uncertainty this year? So is there any going to be shift to the...

We are a domestic consumption story. We don't want to go to exports. Our exports is less than a percent of our overall turnover, and we are very bullish on the Indian market, and we want to focus all our energy and effort here. So, we are not looking at the export market at all.

Okay, sir. Got you. Got you. Thank you.

Thank you. The next question is from the line of Sagar from Marine Research. Please go ahead.

Thank you for the opportunity management. My first question is, the board has approved additional 11 MSM capacity expansion at Guelph. Could you help us understand the key drivers behind this investment? Is this expansion based on the strong demand visibility the next few years or is the company positioning itself ahead of the next housing and real estate of cyber?

So, the driver is the market demand from the north and eastern markets, which Gelpur plant caters to. Due to the price increase of gas prices in Morbi, which is a cluster, the price difference between Kajarya and the Morbi prices have decreased. So, this has given to an increased demand for our products in the northern and eastern markets. Seeing that demand scenario, we have decided to put up an expansion in a Rajasthan plant.

Okay, the next. Could you share the number of dealers added during the quarter?

Pardon? No, no, it's confidential. It is not number of dealers added in the quarter. Yeah, because overall, we have 1,800 dealers approximately, out of which 450 dealers are exclusive. As we go along in the year, with this change, We are expecting another 100 dealers to buy, after which this time 50 will be exclusive. We are focusing more on exclusive Kajariya dealers.

Yes. And how should you think about the dealer productivity over the next 3-4 years? Do you expect growth to come primarily from adding a dealer or increasing still for existing dealers?

See, automatically, with the addition of their demand, see, one thing you are not able to get right now, the difference between Kajaria and Morbi has minimized. What was being sold from Morbi to a Morbi dealer and Kajaria dealer has minimized. If the gap earlier was 40%, today it has come down to 20%, number one. Number two, there are three kinds of customers in the country. One is a guy who is going for Branded Holy. He will buy Tajariya, Somani or Johnson. There is a guy who says, I want Sasta cheap. He will buy a Morbi product. There was another set of people who were saying, where do I go? Where do I go to Branded or I go to Morbi? Thank you. We prefer a branded because you make a house once in 5 years, 10 years, 20 years. So they will go for branded. As a result, our sales have started going up, which we are seeing as a result, which is resulting in what we are talking about. And as a result, we felt it is the right time to go for such a massive expansion, number one. Number two, as you might have heard just now, in Gailpur, we are talking about an increase of 11 million square meters at 165 crores. If I take you back two years back, 5 million square meters used to cost 150 crores. So this is a big change which is happening with the latest technology that we are putting up the plant.

In the Nepal side, IELTS market estimated around 200-500 peru, historical Indian times around 6% peru. What is the expectation for the next 5 years market share is Kajariya targeting in Nepal?

Please come in the queue again. Let other people ask the question. You have already asked the question.

Oh. Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press the N1 on the touchstone telephone. Reminder, anyone who wishes to ask a question, may press the N1 on the touchstone telephone. The next question is from the line of Pankaj from Ikagai Asset Manager. Please go ahead.

Yeah, good evening, and congratulations on both set of results. My first question is that, you know, when I look at the last three years, The sales growth for us has been uninspiring 3-4%. I see a really renewed confidence in the commentary of growth. Before to visualize the size and scale of the company, I showed you it would be great if you can give a slightly medium-term outlook where you see the size and scale. And my second question is, you know, when I was looking at social media a few weeks back, I think you guys had a sales meet and where you could see 6,000 crore number on the top line for this year or I don't know, next year. So some granularity on what is giving the confidence of growth and how the size and scale of the company will look like in the next three years, last three years has not been great. What are the big changes internally, externally you are seeing, which is giving us the growth confidence. It will be really helpful. Thank you.

Thank you very much. I take you back to April 25, when the big change happened at Kajaria, what happened? We did the job of unification. We had three different verticals, ceramics, poly-55 and lace-55, and we combined it to one. So what happened last financial year was, there was a lot of cost cutting at various heads, but volume didn't come because there was a lot of correction needs to be made. The volume, real volume growth came in the quarter four, when we grew at about 11%. As a result, what happened? Two things happened. One, the organization became much leaner than it was. A lot of people went because there were three verticals operating. So instead of three verticals, now there is only one vertical, that is Tides. And it is now started in Israel. So that is the confidence which we got, number one. And the confidence is not that what we got. The confidence we got is the sales. Resulting in larger sales. As I said just now, in the month of April, it was so because of three reasons. In the month of May, June, and now July, which is also just in the fact in last year of July, things have started improving. We are seeing a double-digit growth. So looking at that, we see that next three years is going to be very, very positive for Kajaria, and it is why these expansions are coming.

And on the external front, you know, Modi was very competitive all throughout with what is happening around in terms of pricing. Do you see a structural change there where the shift from unorganized to organized has started to happen? Anything which is also happening as a tailwind there? Can you help us on that front as well?

We will wait and see. You see, the gas market is very, very volatile today. One day there is a war, next day there is no war. You have to understand this thing that in Mohamed Ali there is only one gas supplier, that is GSBC, which is partly importing on spot and partly taking gas from Gale and Indian Oil. Here we are getting gas from Gale, which is a much, much bigger player as far as gas is concerned, and then CGT companies is out. So right now that situation, how it will come, who will, how they will become more organized and all that, it's too early to say, because right now they are in a trouble as it is. Because they do not know whether gas, what gas prices will be tomorrow, whereas there is some certainty from Gale's side and the gas.

And last question was that when I look at the market feedback at the ground level, the demand for, you know, slabs has been going up at a much faster pace. In the initial time, we had missed that opportunity. How do you see that going forward for us in terms of our capacity, capturing market share there, where somewhere Sempolo has done a great job. So from a SLAP perspective, how do you see our opportunity and that becoming a large portion of our product mix? That will be my last question.

I fully agree. I fully agree with you. That is why we are putting up these two large capacities. Your question is a very valid question that Kajaria missed out. We do agree. But this is why we are putting up these last two capacities to meet the requirement of bigger sizes. And a state-of-the-art, state-of-the-art plant, both are state-of-the-art plants.

Wish you all the best and looking forward for optimism turning into execution. Thank you.

Thank you. The next question is from the line of Ritesh from Investec India. Please go ahead.

Hi, sir. Thanks for the opportunity. Sir, my first question is just wanted to understand why is the difference in CAPEX intensity between the two plants that we have indicated?

The difference is because in Gaelpur, the shed is already there. So that's why the cost is less. It is exactly the same plants which we are putting in both the factories. But in Shrikala Hasti, we are putting up a brand new shed. We have to make an 8.5 lakh square feet new shed. Whereas in Gaelpur, it is an extension of the existing shed. So that is the difference of the capex.

That would be almost like 45 crores?

Yeah, yeah. So, so in Shikala, we'll be spending almost about 80 crores on the shed, 80 to 90 crores, and in Gelpur, we'll be spending about 40 to 50 crores on the shed.

Okay. My second question is just a continuation of what Fankar sir was asking you. If you could highlight basically what is the technology or any different type of styles or sizes that we are looking at this particular?

So, the biggest differentiating factor is the volume. Earlier, as we just mentioned, a 5 to 6 million square meter plant used to cost about 150-160 crores. Now, in 370 crores, we will get almost… 22 million square meters. So we are focusing on capacity as the number one point. And with that, we'll have the flexibility, whatever machinery we buy, whether it is SACME, whether it is Chinese, we'll have a mix or combination of both. We'll produce the best quality tiles, where we have an option of all the sizes.

But is there anything different from a printer or a kiln standpoint, which will differentiate our products versus what we have currently? Or is it just scale, basically, that we are referring to over here?

So what's happened is the kill size has increased. Earlier we used to put a 200 meter kill. This time we are putting a 340 meter kill. That's one. With either a continual press press or a hydraulic press, number press, that doesn't make a difference. So based on that, our technical team is working on all those things. But our first priority is to go for a higher volume capacity. And that is the way we get a very good cost where we can get a much better share in the market.

Sure. And my last question is, would it be possible for you to quantify rupees per SEM for North, West, and South? I think for Q1, we have given numbers of 55, 47, and 49.6. Please correct me if I'm wrong. If you could help us with the numbers for Q1 and likewise what it is on a spot basis.

The average fuel price is around 71 in this quarter, and the west was the costliest Morbi, as our plant was Morbi, that was around 85, and west south and north are much lower than the west.

Sir, would it be possible for you to quantify, corresponding to 55 rupees in North in Q4, how much was it in Q1?

Okay, it's 64, around 64, and for South, it is around 72, 75 rupees.

And, sir, on spot basis, how much would it be?

I mean, this is too much detail, I mean, I mean, spot. Spot is about 85.

Spot on a blended basis, corresponding to 71, it is 85. Is that right?

Spot is 85. You see, gas is not very simple. Gas is a combination when you talk about gas in North. It's a combination of various gas that we get from jail, number one. In Morbi, it's still GSBC. In Kalasi, again, it is a combination of various gases listing gas kits. So it's not that simple that just give you the price. It's a combination of various gases will go into the final number.

Sir, what I was trying to understand is, if we look at the indicated increase, basically, what is the price increase required after Q1, given the gas prices, if they are higher versus Q1?

See, first of all, please understand, gas prices are very volatile. I cannot give you that what will happen tomorrow, nobody knows. Even jail people do not know what will happen tomorrow, because now the entire parameters are decided by Ministry of Petroleum, depending on how the work takes place. So, whatever it is today, we are ready to share. What will happen tomorrow, nobody knows. So, we should leave it at that, as correct.

Sure, sir. That's helpful. Yeah. Thank you.

Thank you. The next question is from the line of Dhananjay from Centre and Broking. Please go ahead.

Yeah, thanks for the opportunity. So, what is the status of Moribi export as of now on monthly basis?

See, exports have come down in the first three months of the year for, due to this war, Gulf War, a lot of exports have been going to America, to Russia, to UK, to Gulf, all these days where the face rates have gone up by almost one and a half to two times. As the drug exports have come down, average exports in the first three months is about 3,000 crores, 1,000 crores each month. So this year instead of 16,000 crores of 25-26, as of today the run rate is lower, the run rate is 1,000 crores per month.

In terms of outsourcing, we are going to achieve 35-40% numbers for us. You talked about exports just now, right? Yeah, I'm talking about outsourcing for us, Kajariya.

Yeah.

So we were at 29-30% number in terms of outsourcing, and we were targeting to reach close to 40% in the next 12 months or so.

Yeah, this year, see, last year we sold about 118 billion square meters of price. This year, we are looking at about 130 million square meters of tiles. That's why I said the growth plus this, as I said, the growth will be double unit plus for the next nine months. In the first quarter, which we shared just now, we have grown at 6% volume growth. So, if you look at those numbers, overall, our manufacturing capacity this year is not going up. Whatever we are doing, we are doing for next financial year. So, looking at that, we have to do more outsourcing to meet that requirement of

That is for this year, next year the percentage will go down, when the beneficiary facility will come.

And thirdly, one, I mean, one understanding I wanted to share, I mean, if you look at real estate launches data, 19 and 20, there was a huge jump in terms of launches, and I think our numbers got impacted because of that. In 2023, we had a big sharp jump in revenue in 22 and 23. And likewise, if I see, we have seen 24, 25, there is a 50-70% jump in launches in real estate. So can we assume that those launches is going to, I mean, in terms of time demand is now coming up and that is why you are seeing good demand from the system side?

Let us not confuse ourselves with all this data. I have already shared a lot of data that why our demand is going up. The first part is unification, which I said very strongly. Secondly, the price difference between Morby and Kajaria, or let's say Morby and Sumani, or Morby and Johnson, which is because they have multi-location plants, just like Kajaria. So with that, we are looking at the positive scenario. What real estate launches and all that, you will confuse the issue. So there is no use of talking about that.

Also, just to clarify a point, when a project is launched, to the point the tile gets used, it's a four to five year cycle. So, even if the real estate project got launched in 24, 25, 25, 26, this is not the time that the tile will get used in those launches. So, those positions are nothing you do with those launches. Those are independent of those real estate launches.

And as already said in the meeting, we are also breaking on projects, which earlier Kajariya was leaving due to various reasons. Now we are also embarking on retail as well as projects. So with these breakthroughs, definitely we are looking at the very positives that we are going forward.

What will be the share of Insti and retail? Any rough idea?

It's too early to talk. There are two few things, it's too early to talk. Everything can't be replied in one day, no?

Okay, sir. Okay, thank you, and all of it.

Thank you. The next question is from the line of Anupayek from Anandrati Investments. Please go ahead.

Yeah, hi, sir. The first question is, we said that the incremental demand in S&P 7 will be met from outsourcing, and is the price between the Kajaya and Kajaya? Am I audible now?

Yeah, yeah, you are okay now.

Yeah, so we said that the incremental demand will be made through outsourcing for FF27, and with the price gap between the company and Morbi players having narrowed down, so is it still lucrative for us to outsource?

We have no choice. We have no choice.

See, this year, because of the production constraint, we will outsource from Morbi because that is the only option. And once the plants come online, on stream in the next financial year, in the first quarter, then our dependence on mobile will be drastically reduced and we will have 22 million of our capacity in-house.

Okay, understood. And the last question, what would be the share of ceramic PVT and GVT in terms of both volume and value for Q1 FY27?

You know, now it's a very irrelevant question because you are making everything, you are selling everything, right? So we honestly don't calculate how much ceramic we sold or how much PVT we sold or how much GBT we sold. We are selling our complete volume of tiles and whatever the market demands, we make that himself. But overall, just for your information, GVT tiles are sold more in the country now, PVT is sold less, and ceramic tiles are mostly used for wall tiles.

Thank you so much.

Thank you.

Thank you. The next question is from the line of Ashish from Motila Loswal. Please go ahead.

Yeah, thank you for taking my questions. I have two questions. One is on the pricing side. So, you mentioned that the price hike was more driven by the increase in fuel cost, which we saw during April, May month. And there was a big difference in the cost increase in the Morbi region and the rest of India. So, my question is that the 11% kind of realization growth which we are seeing on a QOQ and YOI basis, was this uniform across country? My assumption is that we have a unified price on a pan-India basis, but just for a clarification, and if that is the case, then what is the price gap narrowed vis-a-vis Norby as on today? The second question is, is it safe to assume that in FY27, we will have a 20% plus kind of revenue growth driven by about 10% growth in volume and 10% value?

Correct. Your first question, the price is not unified and uniform. It varies from geography to geography. As was said earlier, we have three plants in north, two and south. Then the price increase was roughly 12 to 13 percent. And more in our plants, the price was much higher due to the price of gas. There was increased by much more. So the price is not uniform. It varies from geography to geography. Again, earlier as was said, the price differential between Kajaria and Moorby was 40 percent, which has come below 20 percent as of now.

I hope that answers your first two questions, and also that...

Yeah, yeah, yes.

What is your confidence of achieving a double-digit growth with a 20% value growth?

Okay, sir. Thank you so much, and all the best.

Thank you. Then, reminder, anyone who wishes to ask a question will start and one on the touchstone telephone. The next question is from the line of Anubha from Cosmo Ventures. Please go ahead.

Yeah, hi, sir. Sir, I just had one question, just to follow up on the previous question. Sir, the blended price highs we would have taken since the war broke out. So, sir, is it today sustaining at that level? What is that number and where would it stand for players and Morbi? I understand the situation is quite volatile. Just the update as of today.

So, yes, the price is sustaining as of now, because the situation is quite volatile as of now also, the oil and gas prices, and it was average 13 to 14 percent, the price height, height, which we took.

We differentiate the Morbi products and our non-Morbi products, because Morbi products, the inflation is more. We are just adding our similar margin and selling in the market. So, Morbi, we cannot give you any average realization. Our own non-Morbi plant, we have taken a price increase of around 10%. So, that seems to be sustainable as of now. MoreV price may fluctuate if the prices may go down. Our prices will also go down. If their prices go up, then our prices may also go up. So there is no weighted average price we can tell you now because situation is dynamic. We will be having the same margin for the Morbi product, whatever, even when we were buying at 20 rupees and selling at, or now we are buying at 30 rupees, we are having the same margin. But on revenue, it looks high, but the margin percentage will remain the same. So our margin will not impact, should not change with the increase or decrease of Morbi price.

Hello, Mr. Varu, your voice is not audible.

Hello?

Yes, yes, please.

Yes, sir, I just wanted to get a sense on the geographical mix, like, you know, how is the split life for Tier 1, Tier 2, Tier 3, and which particular geographies are you seeing?

So, the split is like this. North says 35%, south is 30%, east is 20%, west is 15%. Tier 1 says 15%, metro says 15%. Tier 1 and Tier 3 is roughly 15%. That's our geographical spread.

See, the good part what is happening is the entire India is growing. You know, so the work, there's so much work everywhere to be done. We were in Maharashtra recently, you know, we are opening showrooms there, all dealer showrooms. Wherever you go in India, there is so much work to be done. So we are very, very bullish about the entire situation. And if we keep on doing our job well, where on one side we keep on strengthening our retail network. What I mean by that is opening the dealer showrooms in the remotest parts of India. And on the other side, the additional lever which we are talking about where we are being aggressive in projects. With a combination of both of them. We are very confident of achieving our numbers, both in terms of volume and value.

Okay, and sir, just like you mentioned about adding dealers, just on the design part, what's our strategy? Because, you know, that is also one USP which we can develop. And so any particular thought there, like how we can expand our SKU and the designs and stand out in the market?

So, what we do is, when the dealer, say, let's say, for example, a place like Amer Nagar, a place like Kolapur, Amrabati, right? All these places, when the dealer wants to make a showroom, so we work with the dealer, give them all the design. Our person goes there, makes the showroom, helps them in designing the showroom. See, in a person's life, the guy makes, you know, buys tiles two or three times in a time. So our design philosophy is to make the showroom so good for our dealers that when our customer comes, he's completely bored over and he doesn't look at anything else.

Any strategy, like how many experience centers we have currently and want to expand? I've personally visited and obviously it's great, but I mean...

We have our experience centers in all the major towns, about 24-25 of them. We put about one or two experience centers every year, but our project is on strengthening our dealer network and giving them the best product designs, right? We do a lot of R&D in our factories to make sure that we are always keeping up.

Okay. And, sir, next on the sanitary wear and profit, sir, I mean, we had around 33% grow this. So, how much, could you just quantify, like, how much was volume driven and how much was because of the price I think there?

It was a mix of both. I think we increased the price about 15-16% and the rest was volume growth. But looking for this entire year, we are definitely looking at about 35-40% value growth. Which will be a combination of both price increase and volume growth.

And any color on the margins, because now that we have crossed the critical scale, and I think we will draw 500k mark here.

For Kherovic, the Bathway division, this will still be a little tough here. Tyres will have good margin, but Bathway will still be a little tough, because we are still correcting a lot of things. We just hired a new chief business officer also in April, and we're still restructuring a lot of our areas. So I would say this is a year where, yes, we'll do our growth, but we'll also have to do a lot of corrections. Next year, we'll look at a much better number, both in terms of value and in terms of profits.

Okay, okay. But any color on the margin, so it's just close to break-even or something?

I would not like to give up any margin guidance on sanitary when faucets drive this year.

Okay, thank you, sir.

I just say, I have blended. For the company, we're talking around 80-19%.

Yeah, that's great. Thank you.

Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments.

Thank you, Pram. I think a good set of questions have come. And on behalf of our entire management and myself, I thank you all of them for being with us in this investor conference. And thank you once again. Thanks a lot.

On behalf of Kajaria Ceramics Limited that concludes this conference, thank you for joining us and you may now disconnect your lines.