Kajaria earnings for the second quarter of fiscal 2027 showed 10% year-on-year volume growth and a higher EBITDA margin despite elevated gas costs. In its October 26, 2026 earnings discussion, management attributed growth to stronger demand and market-share gains, while forecasting double-digit volume growth over the next two quarters.

Key Takeaways

  • Consolidated revenue grew 24% year on year, outpacing volume growth following price increases.
  • The EBITDA margin rose to 19.5%, but management emphasized volume gains rather than substantial further margin expansion.
  • The enlarged Srikalahasti expansion is scheduled for commissioning by June 2027.

Kajaria earnings benefit from higher volumes and prices

Kajaria’s EBITDA margin increased to 19.5% in Q2 FY27 from 17.94% in Q2 FY26. EBITDA measures earnings before interest, taxes, depreciation and amortization.

Management said volume growth extended across regions and end-user segments, including retail and project sales. The company implemented price increases of roughly 12%–13% at its North and South plants across ceramic, polished vitrified and glazed vitrified tiles.

Revenue growth therefore reflected both higher quantities sold and stronger pricing, rather than volume expansion alone. Bathware revenue increased 22% year on year, while adhesives revenue grew 69%.

Kajaria’s financial-results archive lists second-quarter materials for FY 2026–27 alongside earlier reporting periods; the index itself does not provide the detailed figures discussed in the earnings call.

Morbi disruption creates opportunity and sourcing risk

Management estimated that 40%–50% of the 400–500 plants in the Morbi manufacturing cluster were not operating because of weak exports and difficulty passing on higher gas costs. It said the disruption was benefiting organized producers such as Kajaria.

Higher price increases by Morbi producers had narrowed their price gap with Kajaria from about 40% to 20%–25%, management said. That could support Kajaria’s competitive position, but Morbi is also an important supplier of outsourced tiles.

Kajaria expects to sell approximately 130 million square meters in FY27, including about 42 million square meters sourced from Morbi. Disruption in the cluster consequently presents a supply and cost risk as well as an opportunity to win business.

Management also cited elevated freight rates and limited container availability as constraints on export demand.

Growth outlook prioritizes market share over wider margins

Management expects double-digit volume growth to continue through the next two quarters, supported by deeper penetration in Tier 2 and Tier 3 cities, additional exclusive showrooms and a stronger dealer network. These are expectations, not completed results.

The company does not plan further near-term price increases. Management indicated that exit margins should remain around 19.5%, with potential savings from gas sourcing, production efficiencies and logistics likely to be passed on to customers to support volume growth rather than materially expand margins.

The planned Srikalahasti expansion has been enlarged from 10 million to 12.5 million square meters and is expected to be commissioned by the end of June 2027. Across its expansion program, Kajaria expects additional in-house capacity to reduce its reliance on outsourcing.

Next milestone

The next scheduled capacity milestone is commissioning of the enlarged Srikalahasti expansion by the end of June 2027.

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