Kajaria Ceramics shares slipped over 3% in trade, even as the company posted healthy Q1 FY26 results. Interestingly, global brokerage Goldman Sachs maintained its Buy rating on the stock but set a target price of ₹1,032, implying a 17% downside from the previous closing price of ₹1,240. As of 9:37 AM, the shares were trading 2.32% lower at Rs 1,212.80.
In its report, Goldman Sachs highlighted Kajaria’s strong operational performance, with Q1 EBITDA beating estimates due to solid cost control. However, revenue growth remained muted, with tile volumes up just 1% year-on-year and average selling prices remaining flat quarter-on-quarter.
The earnings beat was largely driven by strong operational efficiency, though topline growth remained muted. Chairman Ashok Kajaria attributed the sluggish revenue performance to minimal tile volume growth and the impact of shutting down the company’s plywood division. Kajaria Plywood Pvt. Ltd., now classified as a discontinued operation, weighed on overall sales, with the board having approved its closure due to lack of profitability.
For the quarter ended June 30, 2025, the company’s net profit rose 21% year-on-year (YoY) to ₹109 crore, up from ₹90 crore in Q1 FY25. Revenue stood largely flat at ₹1,103 crore, compared to ₹1,096 crore a year earlier. EBITDA rose 9% to ₹187 crore, with the margin improving to 16.9% from 15.6%.
Profit before tax grew 17% YoY to ₹150 crore, while cash profit was up 16% at ₹153 crore. Kajaria remains in a strong financial position, with a net cash balance of ₹515 crore as of June 2025.
On the international front, its UAE joint venture under Kajaria International DMCC continues to operate actively. However, UK operations are being scaled down due to high fixed costs.
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