Founded 30 years ago, Kajaria Ceramics is today the largest manufacturer of ceramic and vitrified tiles in the country, with an annual aggregate capacity of 68 million square metres. The company’s manufacturing facilities are spread across seven different locations at Sikandrabad in Uttar Pradesh, Gailpur and Malootana in Rajasthan, three plants in Gujarat and one at Vijayawada in Andhra Pradesh. The manufacturing units are equipped with cutting edge modern technology, intense automation, robotic car application, with zero chance of human error. The Indian consumer’s taste has changed over the years with rapidly growing appetite for style and aesthetics and hence the inspiration behind every design of Kajaria is to keep pace with the customer and market demand and make its products synonymous with quality, service and innovation, not only in the domestic market, but also in the international market.

As of last year, Indian tile industry’s production was pegged at 1,080 MSM, while the consumption was 760 MSM, with the balance constituting exports. The tile industry has been generally growing at 8-9% CAGR over the last few years, with an estimated size of around Rs 27,000 crore. From a global scenario, the per capita consumption of tile per square metre in our country is a minuscule 0.59, while other countries like China (3.95), Brazil (3.39) and Vietnam (4.40) have substantial much better figures.

The company has many joint ventures and subsidiaries across different geographies in the country such as Jaxx Vitrified, which is based in Gujarat, where Kajaria has an 82% stake in it. Jaxx has a combined annual capacity of 10.20 MSM of polished vitrified tiles across two plants operating at full capacity. Vennar Ceramics is based in Andhra Pradesh, with Kajaria having a 51% stake in it. Vennar has an annual capacity of 2.90 MSM of high end ceramic wall tiles and working at full capacity. Kajaria Bathware is a subsidiary of Kajaria Ceramics, where the latter owns 85%, while the balance 15% stake is with Westbridge Crossover LLC. The sanitaryware factory in Gujarat is undergoing expansion to be completed in the next few months, while the faucet facility in Rajasthan should attain 85% capacity utilisation by the end of next year. It has increased its capacity from 1 MSM to 68 MSM in the last three decades and currently offers more than 2,800 options in ceramic wall and floor tiles, vitrified and designer tiles.

Kajaria Ceramics displayed a decent quarter of operational performance for Q4FY19 with double digit volume growth in the tile business. Despite a sharp increase in gas prices the company has been able to maintain its operating margins in the broad range of 15-16%. With the new government firmly in place, the real estate and infrastructure sector has a lot of expectations. Smart cities and affordable housing being the focus of the government, throws a lot of opportunities for the company to leverage its two invaluable assets—the Kajaria brand and unparalleled, multi-layer distribution network to expand the product bouquet to cater to the growing aspirations of discerning Indian customers. The Kajaria stock has been seeing some bit of accumulation by overseas investors in the recent past and the stock currently quoting at Rs 610 can be bought, with an expected 35% price appreciation in the next 18 months.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.


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