Kajaria Ceramics (KJC IN) – Q4FY26 Result Update – Margin expansion led by price hikes & cost optimization – Downgrade to ‘ACCUMULATE’
Published on 01 May 2026
Management has refrained from providing volume guidance for FY27 and beyond due to past deviations and external uncertainties but expects to maintain EBITDA margins to ~18-19% range. Margins expanded sharply to ~19.2% (+790bps YoY), supported by a combination of cost optimisation measures, improved operating efficiencies across production and supply chain, better price realisations led by calibrated price hikes taken during the quarter and low-cost inventory. Realisations improved QoQ as the company passed on higher gas costs while maintaining pricing discipline. Price hikes of ~12–13% in North and similar levels in South, along with ~16-17% in Morbi, were implemented to offset higher gas costs, supporting realization improvement. working capital days improved by ~14 days to 51 days from Dec-25, driven by reduction in inventory and receivables. We have considered 5.0% CAGR in tiles volume over FY26-28E with cons. EBITDA margin of 17.4% in FY28. We expect Revenue/EBITDA/PAT CAGR of 8.4%/6.8%/13.6% over FY26-28E. We revised upwards our earnings estimates for FY27/FY28 by 5.8%/4.9%, while downgrading our rating to ‘Accumulate’ from ‘BUY’ as stock has given ~30% return post our Kajaria Management Meet update. We value the stock at 33x Mar’28E EPS to arrive at revised TP of INR1,323 (earlier INR 1,147). Downgrade to ‘Accumulate.’
