Kajaria Ceramics reports strong Q2 FY26 margins, PAT up 58% amid strategic restructuring
Kajaria Ceramics reported Q2 FY26 consolidated revenue of ₹1,186 crores with 58% PAT growth to ₹133 crores, driven by 17.94% EBITDA margin from cost optimization. Strategic restructuring, new leadership, and market penetration efforts are underway, with volume growth expected from Q3.
The announcement covers Q2 financial results, major strategic restructuring, leadership changes, and ongoing cost optimization efforts that directly impact the company's profitability and future growth trajectory. These are significant developments for the company's operational and financial performance.
The company reported a significant 58% PAT growth and improved EBITDA margins to 17.94% despite flat revenue, indicating successful cost optimization and financial discipline. Strategic initiatives like unification of sales, new leadership, and market penetration efforts show a forward-looking positive outlook.
* Kajaria Ceramics Limited announced its Q2 FY26 consolidated revenue at ₹1,186 crores, a marginal 1% year-on-year growth, primarily due to low tiles volume and the closure of its supply sales division. * Despite minimal sales growth, the company achieved a robust operating margin and healthy cash flow, underscoring operational strength and financial discipline. * The company is undergoing a cost optimization journey, capital prudence, and a strategic sales reset dubbed "Kajaria 2.0," aimed at building a leaner, more agile, and growth-ready organization. * New leadership roles were announced with Mr. Chetan Kajaria elevated as Vice Chairman and Mr. Rishi Kajaria as Managing Director. * Segment-wise performance for Q2 FY26: * Tile segment revenue remained flattish at ₹1,051 crores. * Bathware segment revenue grew by 14% to ₹102 crores. * Adhesives segment revenue increased to ₹32 crores from ₹18 crores in Q2 FY25. * EBITDA improved to 17.94%, a gain of 122 basis points sequentially and 447 basis points year-on-year. * Profit After Tax (PAT) for the quarter surged by 58% to ₹133 crores, compared to ₹84 crores in Q2 FY25. * Working capital days reduced by 2 days to 56 days as of September 30, 2025. * Cost reduction initiatives include reengineering packing boxes, resulting in annual savings of ₹30-35 crores, reducing purchase prices, outsourcing tiles, and a reduction of approximately 250 employees. * The company expects to see some volume growth in the upcoming October-December quarter (Q3 FY26) and further cost savings across various line items. * Strategic initiatives include unifying sales, positive feedback from distributors, forming a team to engage architects and interior designers, and hiring a management consultant to identify market white spaces and strengthen the distribution network. * The company will also unify its pricing and discount structures and plans to increase its number of exclusive showrooms. * Management indicated that demand in the building materials sector has been sluggish but anticipates a revival from Q3 FY26, partly due to post-flood construction and government infrastructure focus. * Kajaria Ceramics is not adding new manufacturing capacity but focuses on utilizing existing plants at 100% and will outsource from Gujarat to meet increased demand. * Export volumes saw a marginal 9-10% increase in H1 FY26, with a full-year target of ₹18,000 crores. * Advertising expenses were lower in H1 FY26 but are intended to increase in H2.
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