Kajaria Ceramics Ltd. (KAJR.BO): 1QFY27 Preview: Benefit of brand and diversified manufacturing footprint to continue for sometime, remain Buy

研报英文原文证据摘录

Kajaria Ceramics Ltd. (KAJR.BO): 1QFY27 Preview: Benefit of brand and diversified manufacturing footprint to continue for sometime, remain Buy

Goldman Sachs Kajaria Ceramics Ltd. (KAJR.BO)

resuming operations.

n Brand vs commodity shift: Consumer preference is visibly shifting towards

branded, quality-certified tiles. Kajaria has been actively converting its multi-brand

dealers to exclusive dealerships through co-branded showrooms. This structural

shift in distribution deepens the competitive moat. Post crisis, the price differential

between Morbi players and Kajaria has reduced to 15% from earlier 35-40% (Morbi

players underselling relative to branded players). This is because costs in Morbi have

gone up much higher resulting in higher price increases vs Kajaria’s for whom cost

increases have been lower.

Kajaria 2.0 - Internal transformation aiding external tailwinds:

n GVT mix shift - Higher realisations, better margins: Kajaria has completed the

conversion of approximately 9.1msm of capacity from lower-value ceramic to

high-value Glazed Vitrified Tiles (GVT). This is material because GVT commands

premium of 25-35% over ceramics - a structural margin driver.

n Southern expansion: The board approved Rs 2.1bn investment to add 10msm of

GVT capacity at Srikalahasti, AP by Mar-27 - focusing on the fastest growing and

highest margin tile sub-segment. Southern region where currently Kajaria is under

penetrated vs. North is a key growth geography given faster urbanisation, younger

demographics and rising income levels. The investment is funded via internal

accruals and hence carries no balance sheet risk.

n Salesforce unification: Historically, Kajaria operated three separate tile divisions

with separate sales teams, discount structures and dealer engagement protocols.