Kajaria Ceramics' net profit falls 59 pc in Q4 due to weak demand, plywood losses

IANS May 6, 2025 225 views

Kajaria Ceramics, India's largest tile manufacturer, experienced a substantial 59% decline in net profit during Q4 FY25. The company's performance was impacted by weak domestic demand in the real estate sector and losses from its discontinued plywood operations. Despite challenging market conditions, Kajaria saw a modest 2% increase in tile volumes and continues to expand its manufacturing capabilities. The company is strategically repositioning itself by launching a new adhesive subsidiary and focusing on core tile manufacturing operations.

"Both export and domestic markets were soft during the quarter" - Kajaria Ceramics Chairman
Mumbai, May 6: Kajaria Ceramics Limited on Tuesday reported a sharp 59 per cent drop in its consolidated net profit for the January-March quarter (Q4 FY25), as sluggish domestic demand and losses from discontinued plywood operations weighed on its performance.

Key Points

1

Tile volumes increased 2% despite challenging market conditions

2

Net profit falls to Rs 43 crore from Rs 104 crore

3

Company launches new adhesive subsidiary

4

Exiting UK joint venture operations

India's largest tile manufacturer posted a net profit of Rs 43 crore for the fourth quarter, down from Rs 104 crore in the same period last fiscal, according to its stock exchange filing.

The company attributed the decline mainly to Rs 30.79 crore loss from its now discontinued plywood business.

While overall revenue from operations grew slightly by 1.1 per cent year-on-year (YoY) to Rs 1,222 crore, the company said domestic tile demand remained muted due to a slowdown in the real estate sector.

The earnings before interest, taxes, depreciation, and Amortisation (EBITDA) also fell by 20 per cent to Rs 138.4 crore, with operating margins narrowing to 11.3 per cent, compared to 14.3 per cent a year earlier.

Despite the weak demand, Kajaria saw tile volumes increase by 2 per cent in the quarter and 6 per cent over the financial year, reaching 114.7 million square metres in annual sales.

The company's chairman noted that both export and domestic markets were soft during the quarter.

The company has exited its joint venture operations in the UK due to high costs and will not proceed with a planned Rs 30 crore tile facility under Kajaria Ultima Private Limited.

However, it is moving forward with a Rs 15 crore tile adhesives plant in Rajasthan, which is expected to begin operations in June 2025.

Kajaria has also launched a new subsidiary, Kajaria Adhesive Private Limited, and now operates nine manufacturing units across India and Nepal, with a total production capacity of 90.5 million square metres.

Shares of Kajaria Ceramics closed the trading session at Rs 798.20 on the Bombay Stock Exchange (BSE) on Tuesday, down 2.9 per cent or Rs 23.85 following the earnings announcement.

Reader Comments

R
Rahul K.
This shows how the real estate slowdown is affecting related industries. Kajaria is a strong brand but even they couldn't escape the market conditions. Hope the new adhesives plant brings better results 🤞
P
Priya M.
Used Kajaria tiles in my new home last year - excellent quality but quite expensive. Maybe they should focus more on affordable range to boost sales in current market.
S
Sanjay T.
The plywood business exit was necessary but came too late. Management should have acted sooner to cut losses. Good they're focusing on core tile business now.
A
Ananya R.
Interesting that they're expanding in Nepal while pulling back from UK. Smart move to focus on markets closer to home where they understand the demand better 🇮🇳
V
Vikram J.
The 2% volume growth despite weak demand shows brand strength. Long-term investors shouldn't panic - construction sector will bounce back after elections.
N
Neha P.
Their margins are concerning. Maybe they need to optimize manufacturing costs or introduce more premium products. The adhesives business could be a game changer if done right.

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Kajaria Ceramics Tile Manufacturing Q4 Earnings Real Estate Slowdown Indian Stock Market