Kajaria Ceramics Q2 FY27 Results Analysis: PAT Surges 42%, EBITDA Margin Beats Guidance (KAJARIACER)

Kajaria Ceramics Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 1,468.26 Cr (+23.80% YoY) and PAT growth of +42.35% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Kajaria delivered 23.80% revenue growth and 42.35% PAT growth with operating EBITDA margin of 19.52%, above the top of management's own 18-19% guidance band despite a 215 bps YoY power & fuel cost ratio deterioration. Morbi-disruption share gains (outsourced purchases +39.81% YoY), 1.03x CFO/PAT conversion, and on-plan capacity expansions of ~23.5 MSM tiles landing Apr-Jun 2027 support the Rs.1,000 Cr+ FY27 EBITDA target, which requires only flat H2 YoY. Watch items are gas price volatility, the sub-scale Others segment margin, and the 2.34 pp promoter stake sale.

Key Investment Insights

Key Positives

• Consolidated revenue grew 23.80% YoY to Rs.1,468.26 Cr and 10.56% QoQ
• Operating EBITDA of Rs.286.61 Cr grew 34.28% YoY with margin at 19.52%, above the top of management's 18-19% guidance band
• PAT grew 42.35% YoY to Rs.190.72 Cr; EPS grew 43.95% YoY to Rs.12.02
• Tiles segment result grew 39.49% YoY with margin up 217 bps to 17.53%; Others segment result grew 81.21% YoY
• H1 CFO of Rs.371.03 Cr grew 68.05% YoY with CFO/PAT at 1.03x; FCF of Rs.271.09 Cr
• Outsourced purchases grew 39.81% YoY, consistent with the Morbi-disruption share-gain thesis
• Capacity expansions on plan: Gailpur 11 MSM by Apr 2027 (Rs.180 Cr), Srikalahasti 12.5 MSM by Jun 2027 (Rs.340 Cr, upsized), Durgapur adhesives by Dec 2027 (Rs.34 Cr)

Risk Factors

• Power and fuel cost rose 38.45% YoY, the only cost line whose ratio deteriorated YoY (+215 bps to 20.28% of revenue)
• Others segment margin of 9.94% fell 234 bps QoQ and remains roughly half the Tiles margin; bathware/Kerovit restructuring not yet resolved
• First impairment provision of Rs.1.55 Cr (consolidated; Rs.5.09 Cr standalone) booked on the Nepal JV / FZCO loan exposure
• Current borrowings rose Rs.178.72 Cr to Rs.259.90 Cr funding working capital and capex
• Promoter sold 2.34 percentage points of stake in late September with no further disclosure in the filing