First Read: Kajaria Ceramics "Well positioned to regain market share" (Buy)

Research evidence excerpt

First Read: Kajaria Ceramics "Well positioned to regain market share" (Buy)

from ~Rs21 pre-war level to From To % ch Cons.

Rs31–32. Despite gas price normalization, management expects prices to remain 03/27E 38.67 40.54 5 37.24

elevated due to reduced production and dealer inventory adjustments. Unorganized 03/28E 45.44 48.18 6 41.41

players, who gained market share in recent years, may lose ground as the price gap with 03/29E 53.81 57.36 7 46.43

branded players narrows.

Shaleen Kumar

Analyst

What that implies for Kajaria?

shaleen.kumar@ubs.com

Kajaria leveraged Morbi disruptions during the war, with its north and south plants +91-22-6155 6065

running at full capacity, leading to market share gains. The historical price gap with

Angad Saluja

Morbi players narrowed due to sharp price hikes by Morbi manufacturers, driving

Associate Analyst

customer uptrading to branded products. Kajaria raised prices to balance the increased angad.saluja@ubs.com

cost outsourced tiles. It has taken price increases of 10-12% to absorb in-house +91-22-6155 6174

manufacturing cost increase of 5-6%, leaving some room for margins. Management

Raksha Saraf

noted subdued April demand but reported recovery in May to double-digit growth, Associate Analyst

projecting ~8–10% YoY volume growth for rest of FY27. Pre-war volume growth raksha.saraf@ubs.com

(~11%) in 4QFY26, aided by sales unification, supports this outlook. Additionally, the +91-22-6155 6041

company is intensifying its focus on the projects segment and enhancing its go-to-

market strategy, including dealer optimization, to drive incremental market share gains.

Valuation: Maintain Buy with an increased PT of Rs1,700 (earlier Rs1,600)

We increase our realisation estimates leading to 5/6% increase in our earning estimates.