BENGALURU (Reuters) – Indian tile manufacturer Kajaria Ceramics reported a 40.2% jump in third-quarter profit on Wednesday, driven by robust demand which overshadowed a slight jump in expenses.
In the previous fiscal year, Kajaria grappled with soaring gas prices and weak demand.
However, the firm experienced a surge in demand this year, particularly from the housing and construction sectors, buoyed by the Indian government’s intensified focus on infrastructure development ahead of the general election.
This push has been beneficial for Kajaria, which according to Jefferies, leads India’s ceramic/vitrified tiles market with approximately a fifth of the market share.
The company reported a consolidated net profit of 1.04 billion rupees ($12.5 million) in the quarter ended Dec. 31, compared to 743.2 million rupees a year ago.
The company in a statement said it is seeing a positive rub-off effect on tile demand in fiscal 2025, as the real estate sector enters an upturn.
Kajaria’s revenue from operations rose 5.6% to 11.52 billion rupees, with sales up 6.4% to 27.09 million square meters.
While the company’s expenses rose 1.8%, power and fuel expenditures, which form a fourth of total expenses, fell by almost 14%.
Asian spot LNG prices have declined in 2023 from record high levels witnessed in 2022, but they are still relatively high. Lower natural gas prices are advantageous for ceramic product manufacturers like Kajaria, as they rely on fuel to power their tile kilns.
Separately, Kajaria approved investments of up to 500 million rupees and 300 million rupees in Keronite Tiles and Kajaria Ultima to make them a subsidiary and wholly-owned subsidiary, respectively.
The company’s shares were trading up 2.2% as of 3:12 p.m. IST after the results.($1 = 82.9910 Indian rupees)
(Reporting by Ashish Chandra in Bengaluru; Editing by Varun H K)
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