What Are Brokerages Saying About Kajaria Ceramics After a Mixed Q2FY26?
Kajaria Ceramics delivered a steady yet uneven performance in Q2FY26. While margins improved meaningfully due to cost control and operational efficiencies, volume growth remained soft. Brokerages including Nuvama, Morgan Stanley, and Goldman Sachs shared a mixed outlook, balancing optimism on margins with caution on demand revival.
Nuvama maintained a Hold rating on Kajaria with a target price of ₹1,318, noting that Q2 results were broadly in line with expectations. Tile volumes increased just 0.6% YoY (vs estimate of 3.5%), while EBITDA margin stood at 18%. Cost optimization measures — including packaging redesign, pricing adjustments for outsourced production, and headcount reduction — supported profitability.
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Morgan Stanley maintained its Underweight rating with a reduced target of ₹835, citing muted demand recovery. The firm noted that adjusted PAT beat estimates by 9% primarily due to margin expansion in the tile segment, which stood at 15.5% — the highest in 14 quarters. However, volume growth remained limited to +1% YoY against the brokerage’s 6% projection.
Goldman Sachs maintained a Buy recommendation, revising the target price to ₹1,170 (from ₹1,032). The brokerage highlighted Kajaria’s 2QFY26 EBITDA of ₹214 crore, which beat consensus by 9% thanks to effective cost control. Despite sluggish demand, Goldman expects margins to improve further, supported by favorable input trends and a strong real estate cycle.
Both global and domestic brokerages agree that Kajaria’s profitability is on a sustainable upward trajectory due to aggressive cost optimization. However, the key concern remains sluggish tile demand, which has persisted for nearly four quarters.
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Management continues to focus on regaining market share through cost rationalization and improved distribution strategies. A consultant has been hired to drive efficiency and expansion initiatives in key urban markets. With gradual improvement expected in H2FY26, Kajaria remains a steady, value-driven play within the tiles segment.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that Kajaria’s cost optimization initiatives may support margin stability, but sustained volume recovery is critical. Investors should monitor housing sector trends and raw material inflation for early cues. Explore expert-led analysis at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries
- Can Kajaria Maintain Margin Gains Despite Weak Demand?
- How Are Brokerages Divided on Kajaria’s Q2FY26 Outlook?
- Will Real Estate Recovery Help Revive Tile Demand in FY26?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
