Kajaria Ceramics Limited: history, ownership, mission, how it works & makes money

A Brief History of Kajaria Ceramics Limited

Kajaria Ceramics Limited, established in 1985, has emerged as one of the leading manufacturers of ceramic tiles in India. The company was founded by Ashok Kajaria and operated its first plant in Sikandrabad, Uttar Pradesh. Over the years, Kajaria has consistently expanded its production capacity and product offerings, making a significant mark in the ceramic industry.

By 1991, Kajaria Ceramics became the first Indian tile manufacturer to go public, issuing shares that attracted investor interest and increased its capital for further expansion. The company adopted advanced technology, which allowed it to improve product quality and production efficiency.

In 1993, Kajaria inaugurated its second manufacturing facility in Gailpur, Rajasthan, further solidifying its production capabilities. The company's growth trajectory continued in 2006 with the launch of its third plant in Pathankot, Punjab. This plant was notable for its modern machinery and increased output, designed to meet the growing demand for ceramic products.

As of 2023, Kajaria Ceramics operates a total of 8 manufacturing plants spread across India, with a combined production capacity of approximately 73 million square meters of tiles annually. The company’s product range includes wall tiles, floor tiles, and designer tiles, catering to both residential and commercial sectors.

Financially, Kajaria Ceramics has shown robust growth over the years. For the fiscal year 2022-23, the company reported a revenue of approximately ₹3,500 crores, with an operating profit margin of around 15%. The net profit for the same period was reported at ₹380 crores, reflecting strong operational performance despite market challenges.

As of October 2023, Kajaria’s stock is listed on the National Stock Exchange (NSE) of India under the symbol 'KAJARIACER'. The stock has seen a recent trading price hovering around ₹1,200 per share, with a market capitalization exceeding ₹12,000 crores. The company maintains a healthy dividend payout ratio, consistently rewarding its shareholders.

Kajaria's commitment to sustainability and innovation is reinforced through investments in eco-friendly production practices. The company has implemented waste recycling systems and has increased the efficiency of its manufacturing processes, which has contributed positively to its reputation in the industry.

The company’s strategic initiatives, such as expansions into international markets and diversification of product lines, aim to enhance its competitiveness and market share in the global ceramic tiles market, estimated to grow significantly in the coming years.

A Who Owns Kajaria Ceramics Limited

Kajaria Ceramics Limited, a leading player in the Indian ceramic tiles industry, has a diverse ownership structure. The company is publicly traded on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). As of latest filings, its ownership comprises individual investors, institutional investors, and company insiders.

According to the latest shareholder data from June 2023, the substantial shareholders are as follows:

The promoter group is led by the Kajaria family, particularly Mr. Ashok Kajaria, who has played a pivotal role in steering the company to its current market position. As of the last annual report, the promoter holding stood at approximately 50.68%, indicating a strong influence in company decisions.

Foreign Institutional Investors have shown considerable interest, holding around 15.24% of the company’s shares. This reflects confidence from international markets in Kajaria's growth potential and operational scalability.

Domestic Institutional Investors constitute about 11.66% of the shareholding, which includes mutual funds and insurance companies investing in the company, further indicating a robust institutional support.

The retail investor segment has a significant chunk of about 22.42%, with a sizeable number of retail participants attracted by the company's consistent performance and market presence.

As of September 2023, the company's market capitalization was around ₹25,000 crore, showcasing its stature in the industry. The stock price range during the last quarter fluctuated between ₹1,100 and ₹1,250 per share, reflecting robust trading activity. The price-to-earnings (P/E) ratio was approximately 45.2, indicating market expectations of future growth.

In the financial year ending March 2023, Kajaria Ceramics reported a revenue of ₹3,400 crore, with a net profit of ₹550 crore, translating to a net profit margin of around 16.2%.

The ownership structure of Kajaria Ceramics Limited underscores a balance between strong promoter control and broad investor participation, fostering both operational stability and market confidence.

Kajaria Ceramics Limited Mission Statement

Kajaria Ceramics Limited, a prominent player in the Indian ceramic industry, aims to lead the market while delivering the highest quality products. Their mission statement emphasizes sustainability, innovation, and customer satisfaction.

The company focuses on providing superior ceramic tiles and sanitary ware, aligning with its core values of excellence and continuous improvement. Kajaria's mission outlines a commitment to enhance the living standards of customers through innovative design and unmatched quality.

As of the fiscal year 2023, Kajaria Ceramics reported a total revenue of ₹3,150 crores, showcasing a year-on-year growth of 15%. This growth reflects the company's dedication to understanding market needs and fulfilling them with precision.

In line with their mission, Kajaria has invested significantly in sustainability initiatives. Approximately 20% of their production energy now comes from renewable sources. Furthermore, the company has established waste management practices that recycle over 85% of its production by-products.

Kajaria's commitment to innovation is highlighted by its R&D expenditure of around ₹35 crores annually, accounting for about 1.1% of total sales. This investment aims to develop eco-friendly products and cutting-edge technologies.

Kajaria Ceramics also prioritizes customer engagement. The company has consistently garnered a customer satisfaction score of over 90%. This feedback is integral in shaping product offerings, ensuring they resonate with market demands.

As part of its mission, Kajaria aims to expand its global footprint. Currently, the company exports to over 35 countries, contributing to approximately 10% of its total revenue. This international presence underscores their strategy to leverage market opportunities outside India.

Ultimately, Kajaria Ceramics Limited's mission statement encapsulates a vision that balances growth with responsibility, setting the stage for sustainable success in the ceramic industry.

How Kajaria Ceramics Limited Works

Kajaria Ceramics Limited is one of the largest manufacturers of ceramic and vitrified tiles in India. Established in 1985, the company has grown significantly, leveraging a robust manufacturing and distribution network. As of March 2023, Kajaria reported a consolidated revenue of ₹3,353 crores, marking a growth of approximately 22.6% year-on-year. The company's market presence is enhanced by its strategic distribution channels, featuring over 1,000 dealerships across India.

The manufacturing capabilities of Kajaria span multiple locations, including the following plants:

The company's product portfolio includes a diverse range of tiles, including wall tiles, floor tiles, and designer tiles. In FY 2023, the sales volume reached around 55 million square meters. Kajaria’s focus on R&D has led to the introduction of innovative products, such as anti-bacterial tiles and high-performance vitrified tiles, catering to evolving consumer preferences.

Kajaria Ceramics also emphasizes sustainability and eco-friendliness in its manufacturing processes. The adoption of the latest technology minimizes waste and energy consumption, aligning with environmental standards. For instance, the company has invested over ₹150 crores in green technology initiatives over the last five years.

Financially, Kajaria Ceramics has made steady progress. For the fiscal year ending March 2023, the company's net profit was reported at ₹563 crores, translating to a profit margin of approximately 16.8%. The EBITDA margin stood at 22.2%, showcasing the company's operational efficiency. The debt-to-equity ratio is maintained at a healthy 0.17, indicating a solid balance sheet.

During the fiscal year, Kajaria declared a dividend of ₹4 per share, representing a payout ratio of approximately 25% of its net income. The company's stock has shown resilience, with a price performance increase of 30% over the last year, trading at approximately ₹1,270 as of October 2023.

The strategic initiatives undertaken by Kajaria Ceramics include expanding its footprint in international markets, targeting export sales, and increasing the presence in tier-2 and tier-3 cities in India. The management has set a target to increase its exporting capacity to cover 20% of total sales in the coming years.

Moreover, the company has focused on digital transformation, implementing advanced analytics for market trend analysis and enhancing customer experience through e-commerce platforms, which contributed to a sales increase of 15% from online channels in the last year.

Kajaria's commitment to quality and customer satisfaction is evident from its multiple certifications and accolades, including the ISO 9001 quality certification, which reflects its commitment to maintain high standards in production.

In summary, Kajaria Ceramics operates through a well-structured model that combines robust manufacturing capabilities, strategic distribution, innovative product offerings, and a strong emphasis on sustainability and digital transformation, allowing the company to maintain its leadership position in the ceramics industry.

How Kajaria Ceramics Limited Makes Money

Kajaria Ceramics Limited generates revenue primarily through the manufacturing and sale of ceramic tiles. The company offers a diverse range of products, including wall tiles, floor tiles, and vitrified tiles, which cater to both residential and commercial sectors. In the fiscal year 2022-2023, Kajaria reported consolidated revenue of ₹3,636 crores, reflecting a growth of 22% compared to the previous year.

The company's revenue streams can be categorized as follows:

• Domestic Sales
• Export Sales
• Other Income (including investments and rentals)

In FY 2022-2023, domestic sales accounted for approximately 94% of the total revenue, while export sales contributed around 6%.

Kajaria's competitive edge lies in its strong distribution network, comprising over 1,200 dealers and > 1,700 touchpoints across India. This extensive network facilitates easy access to its product range, driving sales volume. Additionally, the company invests in branding and marketing, which further enhances its market penetration.

The product mix is crucial for revenue optimization. In FY 2022-2023, the breakdown of product sales was:

In terms of profitability, Kajaria Ceramics has maintained a healthy EBITDA margin, reported at 16% for FY 2022-2023. The net profit for the year stood at ₹632 crores, demonstrating a year-on-year growth of 25%.

The company has leveraged modern manufacturing technologies to enhance efficiency and reduce costs. As of FY 2022-2023, Kajaria operates multiple manufacturing facilities with a total capacity exceeding 80 million square meters of ceramic tiles annually.

Furthermore, Kajaria Ceramics has focused on sustainability by adopting eco-friendly practices in its production processes. This commitment is recognized in the market, adding value to its brand.

In summary, Kajaria Ceramics Limited's revenue model is supported by a robust distribution network, diverse product offerings, continuous innovation, and strategic marketing efforts. The company's strong performance metrics highlight its effective business strategies in the highly competitive ceramics industry.