Kajaria's Q2 polish impresses, while demand cracks remain; analysts weigh

Emkay remains upbeat on Kajaria Ceramics, reiterating its Buy call, while Nuvama Institutional Equities takes a more measured stance, maintaining a Hold rating on the shares

Brokerages have offered mixed views on Kajaria Ceramics Ltd  shares after the tile maker announced its financial results for the second quarter of FY2025–26 (Q2FY26).  While Emkay remains upbeat on Kajaria Ceramics, reiterating its Buy call and raising the target price by 7 per cent to ₹1,550, Nuvama Institutional Equities has taken a more measured view, maintaining a Hold rating with a target price of ₹1,318 per share, valuing the stock at 33 times its projected Q2FY28 earnings per share (EPS).

Kajaria Ceramics Q2FY26 results

Kajaria Ceramics reported a 58 per cent year-on-year (Y-o-Y) rise in net profit to ₹133 crore in Q2FY26, compared with ₹84 crore in the same quarter last year. Revenue for the quarter rose 2 per cent Y-o-Y to ₹1,186 crore from ₹1,162 crore in Q2FY25.

 

Earnings before interest, tax, depreciation and amortisation (Ebitda) increased 31 per cent Y-o-Y to ₹214 crore from ₹163 crore, while Ebitda margin improved to 18 per cent from 14 per cent in the year-ago quarter.  ALSO READ | What should investors do with Eternal (Zomato) after Q2? Brokerages decode

Emkay on Kajaria Ceramics

Analysts at Emkay Global said the company’s balance sheet remains strong, with a net cash position of ₹590 crore as against ₹520 crore in Q1FY26, and a net debt-to-equity ratio of -0.2x as of September 2025.

 

“Kajaria remains the market leader in the tiles industry, with strong brand recall. Volume growth is expected to pick up in the coming quarters with a revamp in strategy, better penetration in tier-2/3 towns, an increase in B2B demand, and a likely gradual revival of B2C demand from H2FY26,” Emkay analysts wrote in a note.

 

The brokerage said it has factored in higher profitability and rolled forward its estimates to September 2027.

 

“Our target price is raised to ₹1,550 (earlier ₹1,450) at 42x PER (unchanged); we maintain Buy on the stock,” the note added.  ALSO READ | Infosys down 1% post Q2 results, chart hints at limited fall; here's why

Nuvama on Kajaria Ceramics

In contrast, Nuvama Institutional Equities described Kajaria’s second-quarter performance as “mixed”, citing sluggish volume growth and limited signs of a demand revival.

 

Tile volumes grew just 0.6 per cent (versus an estimate of 3.5 per cent), though the Ebitda margin at 18 per cent was broadly in line with expectations. Margin improvement, the brokerage noted, was driven by ₹30–35 crore in cost savings from re-engineered packaging, pricing revisions for outsourced tile production, and a headcount reduction of about 250 employees.

 

Nuvama highlighted that while the management remains focused on cost optimisation and has engaged a consultant to help gain market share, volume growth has remained subdued, up only 1 per cent Y-o-Y in the first half of FY26.

 

“While cost optimisation has led to better profitability, demand pickup remains elusive. We maintain Hold with an unchanged target price of ₹1,318 at 33x Q2FY28E EPS,” Nuvama analysts said.