Kajaria Ceramics (KJC IN) – Q2FY27 Result Update – Demand Recovery and Capacity Expansion Drive Growth – BUY
Published on 26 Oct 2026
KJC reported 10.2% YoY volume growth in Q2FY27, outperforming the domestic tile industry’s estimated 5–6% growth, and has guided for double-digit volume growth in H2FY27 with EBITDA margins of 18–19%. The company has implemented price hikes of 12–13% across its North and South regions amid elevated fuel costs, narrowing the pricing differential with Morbi tiles to 20–25% from ~40%. Capacity expansions at Srikalahasti and Gailpur remain on track for commissioning around June’27, while management expects gas cost savings from Jan’27 onwards. Adverse conditions in Morbi, including elevated gas costs, weak exports and container shortages, continue to constrain production. Meanwhile, Kajaria is strengthening distribution and expanding its adhesives and bathware businesses to support incremental growth. We have considered 5.0% CAGR in tiles volume over FY26-29E with cons. EBITDA margin of 18% in FY29. We expect Revenue/EBITDA/PAT CAGR of 10.3%/10.4%/14.6% over FY26-29E. We had upward revised our earnings estimates for FY28/FY29 by 4.3%/4.6%. We value the stock at 30x Sep’28E EPS to arrive at revised TP of INR 1,325 (earlier INR 1,458). Maintained ‘BUY.’
