Why Did Kajaria Ceramics' Net Profit Plunge by 59% in Q4?
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Synopsis
Kajaria Ceramics Limited reported a **59% drop** in net profit for Q4 FY25, attributed to **weak domestic demand** and losses from its plywood operations. Despite a slight revenue increase, the company's performance was heavily impacted by a sluggish real estate market. Discover how this affects Kajaria's future and strategy moving forward.
Key Takeaways
- 59% drop in net profit for Q4 FY25.
- Losses from discontinued plywood operations.
- Revenue grew 1.1% YoY to Rs 1,222 crore.
- EBITDA fell by 20% to Rs 138.4 crore.
- Kajaria launched a new subsidiary for adhesive products.
Mumbai, May 6 (NationPress) Kajaria Ceramics Limited announced a staggering 59% decrease in its consolidated net profit for the January-March quarter (Q4 FY25) due to weak domestic demand and losses from its exited plywood operations. The country's largest tile manufacturer recorded a net profit of Rs 43 crore for the fourth quarter, a drop from Rs 104 crore during the same period last fiscal year, as per their stock exchange filing.
The company noted that the decline was primarily due to a significant loss of Rs 30.79 crore from its now-defunct plywood business.
While total revenue from operations saw a slight increase of 1.1% year-on-year (YoY), reaching Rs 1,222 crore, Kajaria indicated that domestic tile demand remained subdued due to a sluggish real estate market.
The earnings before interest, taxes, depreciation, and amortisation (EBITDA) also experienced a 20% decline, landing at Rs 138.4 crore, with operating margins tightening to 11.3%, down from 14.3% a year prior.
Despite the lack of demand, Kajaria reported a 2% increase in tile volumes for the quarter and a 6% increase for the entire fiscal year, achieving 114.7 million square metres in annual sales.
The company’s chairman remarked that both export and domestic markets were weak during this period.
Kajaria has ceased its joint venture operations in the UK due to high costs and has decided against a planned Rs 30 crore tile facility under Kajaria Ultima Private Limited.
Nevertheless, the company is proceeding with a Rs 15 crore tile adhesives plant in Rajasthan, expected to commence operations in June 2025.
Kajaria has also introduced a new subsidiary, Kajaria Adhesive Private Limited, and now operates nine manufacturing units across India and Nepal, boasting a total production capacity of 90.5 million square metres.
On the Bombay Stock Exchange (BSE), shares of Kajaria Ceramics closed at Rs 798.20 on Tuesday, reflecting a decline of 2.9% or Rs 23.85 following the earnings report.
Point of View
Kajaria Ceramics’ substantial profit drop highlights the broader challenges facing the construction and real estate sectors in India. As the largest tile manufacturer, their struggles serve as a bellwether for the industry. Navigating through weak demand and operational losses, Kajaria's future strategies will be crucial in sustaining its market position.
NationPress
21/05/2025
Frequently Asked Questions
What caused Kajaria Ceramics to report a profit decline?
Kajaria Ceramics reported a profit decline due to weak domestic demand and operational losses from its discontinued plywood business.
How much did Kajaria's net profit decrease?
Kajaria's net profit decreased by **59%**, from **Rs 104 crore** to **Rs 43 crore**.
What is the impact on Kajaria's operations?
Kajaria has ceased its plywood operations and has exited its UK joint venture, but is moving forward with new projects such as a tile adhesives plant in Rajasthan.
What are Kajaria's plans for the future?
Kajaria plans to continue expanding its operations in tile manufacturing and has launched a new subsidiary, Kajaria Adhesive Private Limited.
How did the stock market react to Kajaria's earnings announcement?
Shares of Kajaria Ceramics fell by **2.9%**, closing at **Rs 798.20** following the earnings announcement.
