Kajaria Ceramics Limited October 20, 2023 7% in the Q I we have been able to achieve this 16% margin. I think going forward it should be slightly better that is the way I look at it. Got it Sir and secondly on the fuel pricing if you could help us with the 2Q average and outlook for second half of this year? As far as the Q2 is concerned the total if you take all the plants it is about Rs.38 and going forward it will be more or less same plus or minus Rs.l because as you all know brent has slightly increased in the international market so it should be a plus or minus Rs.l like that but at the same time since we are using biofuel so we are confident that it will not go beyond it. The regional breakdown ifit is possible for the North, South, and West? Gas is RsAO in North, Rs.38 in South, West is Rs.33 and average is about Rs.38 for Q2. Got it Sir and last question the savings from power and fuel I think it was expected to be about Rs.150 Crores for the full year how much was that in first half, is it equal like is it Rs.75 Crores? No, it should be slightly better than that. I would say slightly better and part of it will be passed on to the trade as I said earlier. Yes I am aware of that Sir so in terms of passing on to the trade but should be like Rs.80 Crores to Rs.85 Crores is it? Approximately. Thank you so much Sir. I will come back in the queue. All the best. Thank you. The next question is from the line of Sonali Salgaonkar from Jefferies. Please go ahead. Sir thank you for the opportunity. My first question is regarding the capex any revision in the guidance for the capex or do we hold to our guidance of last quarter? The capex guidance remains the same I think this year we should be spending close to about Rs.370 Crores in FY2023-FY2024 and going forward I think it should be about Rs.200 Crores to Rs.250 Crores every year for the next three years. Kajaria

Kajaria Ceramics Limited October 20, 2023 Understand. Sir secondly on the export front you actually gave a very good summary of how India is faring well as a low cost producer so any any updates on the Q2 exports how much have we grown and which are the new markets that we will be currently targeting? You see total first six months exports are from India is about Rs.l 0000 Crores plus. Got it Sir. Sir any relevant pricing actions in Q2 that we have seen in either tiles or sanitary ware? Any. Any pricing action pricing price hike or reductions. Prices as I said earlier also the prices per se do not get reduced but we pass on certain benefits to the traders or the dealers to sell more basically that is what has been market. Any relevant pricing actions across your product portfolio, any segment where you have increased or probably rolled back the prices? Right now there has been no price increase in any segment. No change as such. Got it. Sir just one last question in your starting commentary you said that demand is a bit weak so if you could help us understand where is this weakness primarily coming from, is this urban driven or Tier-2 or Tier-3 rural driven? See all of you have been saying that real estate has been good for the last two years which we accept, now what has happened is first year as I said earlier they have sold their old inventory what was there, second year the new construction started. Our demand has started coming now as I said September has been better than last five months and things are looking positive. First they use steel and cement and all kinds of things for making the building cables and all that, now a time has come where they will be using the fmishing end where the tiles, sanitary wear, ply and all kinds of things will come and paints and all that all will come in so that is a scenario which is now emerging and I think it should be better from here. Now we are seeing the demand coming in the real estate sector so going forward things are going to be much better. I understand. Sir if I am correct your revised volume guidance was 11% to 13% is that right for the full year? Kajaria

Kajaria Ceramics Limited October 20, 2023 No, we are not saying that. What we are saying is see QI we did the volume growth of7%, Q2 we did 6%. What we are honestly saying is with the market looking up Q3 will be definitely better than first and two and Q4 will be better than third so if you average it out I think it should be close to about 9% to 10%. I think that is what we should look at. Understood Sir. Right that is all from my side. Thank you. Thank you. The next question is from the line of Shubham Aggarwal from Axis Capital. Please go ahead. Thank you for the opportunity. My questions have been answered thanks. Thank you. The next question IS from the line of Onkar Ghugardare from Shree Investments. Please go ahead. My question was regarding the volume growth earlier you targeted was around 15% to 20% at the start of the year so now you are revising it to 9% to 10% so any comments on that? We never give a guidance of 15% to 20%. What we gave guidance was 13% to 15% in volume terms at our day conference when we did our annual results. You are also aware what is happening in the industry it is not that Kajaria has to do something which is beyond expectations, results have started coming from many multinationals, they all are saying that the markets have been very tough so are we. Looking at the current scenario, we have revised our target and have just shared it. So just now you shared that now things have started in for the tile sector as earlier the cable and wire sector or other sectors are doing well so how confident are you about this recovery which will be taking place as the results from other players have been very strong other players in the other relevant industries to real estate? Don't give a general statement. Talks about a specific industry where the results have been good. We are also aware of what is happening. I am talking about infrastructure; I am talking about cables and wires. As I said earlier cables and WIres are being used at the time of construction. Post construction tiles, sanitary ware, paints, and plywood, all these things come in. As far as ASTRAL is concerned you said they are also catering to agriculture sector and do not forget agriculture is doing very well in India. So do not mix that. See you should compare an apple to an apple I would say that. Kajaria

Kajaria Ceramics Limited October 20, 2023 So I was asking about the same thing how confident are you that since the allied industries are doing? What we are saying is in the consolidated six months we had a volume growth over 6% to 7% and going forward it will be better than that. Things are looking up now, things are looking better and next six months are going to be much better than the first six months. Alright. Thank you. Thank you. The next question is from the line of Sneha Talreja from Nuvama. Please go ahead. Good evening Sir and thanks a lot for the opportunity. Just two questions from my end that is related to your, one is employee cost we have seen sudden increase in employee cost jump, any specific one-off or will it be now the new run rate? It is some provision of increment in the Q2. It is probably this run rate basically can continue for full year considering these increments will stay here? Yes so the next quarter is going to be similar to Q2 slightly maybe very slightly higher than Q I, you can take employee cost in Q3 and Q4 what we have shown in Q2. Understood Sir and secondly I just wanted to understand what has been the add spend for first half as well as Q2? So we spent roughly Rs.l08 Crores last year and we spent Rs.60 Crores in the first six months. Our target is to increase this and have a total spend of Rs.130 Crores to Rs.l40 Crores for the fmancial year ending 2023-2024. So the second half with volumes improving there you will see aggressive happening? Correct. Understood. Thanks a lot and all the very best to you. Thank you. The next question is from the line of Dhananjay Kumar Mishra from Sunidhi Securities. Please go ahead. Kajaria

Kajaria Ceramics Limited October 20, 2023 Thanks for the opportunity. Just wanted to know we have done growth we have done in terms of volume 6% to 7% so from where this demand is coming, whether it is coming from replacement market up gradation or more coming from new builders so do you have any estimate of that and what kind of growth in both the segment is happening as of now? As we said, the first six months was 6% to 7% and the next six months will better in terms of volume. And the growth is coming from everywhere in good proportion mainly from Tier-2 and Tier-3 cities where new houses are being built. Metros are more for renovation basically that is the overall scenario. Dealers are opening more showrooms and stores in Tier-2 and Tier-3 cities. So we are looking at a much higher volume growth from smaller towns.

Then incremental demand will coming once as you said that we are expecting good demand once the project will come in completion stage right?

Right.

Thank you Sir.

Thank you. The next question is from the line of Akash Shah from UTI Mutual Fund. Please go ahead.

Good evening. Thank you very much for the opportunity. Ashok ji just wanted to ask so we are sort of increasing our footprint in international market like let us say Dubai and also we had set up a N to sell products in UK market so any sort of thoughts whether are we willing to ramp up our export sales or it would still remain small in the overall scheme of things? See overall we are very, very strong in the domestic market. Export will always be a small percentage of our overall sale. By opening a showroom in Dubai and by opening a showroom in London we are trying to see how we can get some share of the export market and increase our export sales. It will be a slow and gradual process, but we are putting our effort to get some share of the market. Sure, and we will be selling product tiles in our own brand name, right? Absolutely because Kajaria products are being sold in Dubai or London. Sure and just sorry I missed that part so we shared the gas cost region wise so what was the number for West and South? Kajaria

Kajaria Ceramics Limited October 20, 2023 West is 33 and South is 38 and north is 40 and average is 38. Sure thank you very much. Thank you. The next question is from the line of Amit from Elara Capital. Please go ahead. Good evening. Thank you for this opportunity, Sir. Sir I was saying that I just wanted to know you have been talking about getting into smaller towns aggressively and you also highlighted Tier-2 and Tier-3 markets I just wanted to know if you could share what would be the revenue split like if possible or the dealer split like if possible, for our existing current dealers or our current revenue? See currently metro is about 15% to 16%, Tier-l what we call it is about 30%, Tier-2 would be about 30% and Tier-3 will be the balance, Tier-4 will be hardly 2%. So our expansion plan are we looking at Tier-4 or are we saying Tier-3 and Tier-4? Tier-2 and Tier-3 will be the area where the major construction is happening and partly into Tier-4 as we go. In terms of our distribution current mix what would it will, it should be similar to the revenue mix right? Yes it will be similar to the revenue mix. Thank you Sir. Thank you. The next question IS from the line of Parv from Niveshaay Investment Advisory. Please go ahead. Sir can you please share the split of revenue between tiles, bathware and adhesive and their respective margins? For the last six months? Yes. Tiles is 90%, bathware is 7%, plywood and adhesives together is 2% to 3%. The respective margin? Kajaria

Kajaria Ceramics Limited October 20, 2023 So tiles is about 16% EBITDA, bathware is bout is 9% EBITDA and plywood is negative margin. How do we see the bathware demand coming up you did give some good guidance on tiles? So bathware market for us first half grew about 16%, the next six months are going to be much, much better than the first six months so we are looking at a blended growth of 20% plus for the entire year. This is in the bath ware alone? This is the bathware segment yes bathware and sanitary are combined. All combined we will see a volume growth of 9% to 10% right? No, tiles we are talking about 9% to 10%, for bathware we are talking about 20% plus value growth. Can you please share the dealer numbers as on September 30, 2023? For? Number of dealers you had guided 150 additions this year are we on track on that? We are very much. Right now, the current no of dealers is about 1950. We started with 1840 current status is 1950. Majority are in T2 and T3 cities? No they are in metro and all over India. How can they only be in Tier-2 and Tier-3. Sorry I missed? They are all over India. Kajaria is sitting all over India metro, Tier-l , Tier -2, Tier-3 and partly Tier-4. The addition will also be all over but out of 110 dealers which we have added you can say about 35 are exclusive Kajaria. Thank you Sir. Thank you. The next question is from the line of Lavanya Tottala from UBS. Please go ahead. Kajaria

Kajaria Ceramics Limited October 20, 2023 Sir thank you for the opportunity. Most of my questions are answered. Just wanted to check on other expenses even other expenses saw a spike in this quarter so anything one off or with higher outsourced it is at a higher rate? We cannot hear you properly. It is mainly because of advertisement expenses. So it will be higher for the next half also with increased? It will be similar to what we have shown in Q2. There will not be the same increase in Q3 what we have shown between Q I and Q2. Got it. Thank you Sir. Thank you. The next question is from the line of Ronald Siyoni from Sharekhan. Please go ahead. Good afternoon Sir. Sir I just wanted a perspective on the Indian tile exports market so as you said that India is poised to become the largest tile exporter by FY2025 so is it that only the lower gas prices compared to globally is what domestic exporters are getting benefits of or are there any other benefits compared to other Southeast Asian countries I mean to say during COVID and after just before the COVID the global gas prices were much higher so versus what are the pros and cons with respect to this cost versus the Southeast Asia exporters? See gas prices what they are today are also there internationally. Indian manufacturers are paying whatever are international prices. Last year if I take you back in the calendar year 2022 gas prices Europe were 8X and lOx and India was about 1.5x and 2x but right now everywhere is the prices have come down more or less 2X or IX. India per share has become very competitive and the credit goes to Morbi because there are almost 600 manufacturer there and out of that you can see about 120 are focusing mainly on exports because we are a very competitive producer as a country so that is why our exports are picking up and looking forward I think we have a feeling that it should go further up as the time passes. So this is a very sustainable trend that exports would continue because the gas prices are comparable? Exactly. Thank you very much Sir. Kajaria

Kajaria Ceramics Limited October 20, 2023 Thank you. The next question is from the line of Nikhil Agarwal from VT Capital. Please go ahead. Good evening Sir and thank you for the opportunity. I had a couple of years of questions. In Q2 your realization for subsidiaries has gone up and outsourcing has gone down quite significantly so any reason behind that? Nikhil there is some mistake from our end. Revenue from one of the subsidiaries got added in the outsourcing revenue. Now we have corrected the number and going forward this is going to be the trend. So the Q2 numbers that are reported those are correct right? Yes so every number in this earning release is corrected and now this going to be the trend. We have regrouped the number for the previous quarter to make it comparable with the Q2. Got it and one more question it was like on the gas cost, gas cost as a percentage of the topline and as a percentage of operating expenses they have increased quarter-an-quarter while you said that your average cost was 38 in Ql it was 39 if I am not wrong so like what could be the possible reason? No, so it has gone up slightly because of the slight increase in the power cost. In one of our units in Rajasthan there are some changes in the duty, and it has increased the power cost slightly and gas cost is more or less same. So if you look at production as well the capacity utilization in Q2 is higher than Q I so that is the reason the power cost has also gone up quarter-an-quarter. Got it. Your capacity utilization in Q2 would be around 95% plus if I am not wrong? Yes. Got it. That is it from me. Thank you so much. Thank you. The next question is from the line of Mohit Agrawal from IIFL Securities. Please go ahead. Thanks for the opportunity. Sir just one question can you quantify the volume growth for the month of September and if possible could you give some color on October 15 days also the demand side? Kajaria

Kajaria Ceramics Limited October 20, 2023 September was roughly about 9% and from October things should be a little better. Should be little better. Thank you Sir. Thank you. The next question is from the line of Jenish Karia from Antique Stock Broking. Please go ahead. So last year we were saying that Morbi would take annual shutdown so IS there any shutdown planned during the Q3 from Morbi? We would not know. You should ask somebody in Morbi we would not know that. I thought you might be aware because we have N s no problem. Our JV's have not taken any shutdown. Last year also when they had shutdown, we did not take any shutdown. Sure Sir that helps. Secondly Sir if you could just reiterate the capex guidance for FY2024 and where would we be spending it in the second half? So we spent roughly Rs.51 Crores in the Gailpur modernization, SKD was Rs.IOO Crores plus, the Nepal project is Rs.91 Crores and Kerovit Global is roughly Rs.80 Crores and our corporate office will be around Rs.50 Crores and Rs.26 Crores is the capex maintenance and miscellaneous will be another RS.25 Crores that is Rs.370 Crores for this financial year. Next year will be Rs.200 Crores to Rs.250 Crores each? Yes correct. The next three years should be around. There is no major expansion plan as of now for next year. That is all from mine. All the best for the future. Thank you. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Thanks for the opportunity. Sir my first question is on this data pertaining to ceramic world review what it surprisingly indicates is that India production and consumption actually in volumetric terms declined for CY2024 any thoughts over here that you would like to share is there something that one should read across? Kajaria

Kajaria Ceramics Limited October 20, 2023 No, you are correct what ceramic world review says but it is actually for the calendar year and when you look at the financial year because in India we do it financial year and that is where we have updated the export data also as per the Ministry of Commerce and if you look at the financial year we have been flat on domestic volumes and exports have grown from Rs.l2500 Crores to Rs.l6000 Crores. Overall industry has been very tough last year for calendar year 2022 if you can see the ceramic world review data worldwide it has degrown by 9.6% because the fuel prices went up in certain parts of the world 8X, lOX and 2X depending on where you are so that was a reason but I think everything has come back to X or maybe maximum of 1.5X so that is the scenario. So the industry overall one should also do better. Right Sir sorry just to dig into it basically it indicates 15% decline even if it is CY how should one believe this number, is it something realistic? Whatever they have given we cannot argue on that but after seeing that data when we went to the fair in September we consulted all the Morbi people also they also felt that the industry has not degrown in spite of a shutdown last year. Please note that they have shut down one month and some of the units have, some of the units have not they felt that per se the production has been flat you can say that and some of the production has been diverted to exports. Part of the production for domestic was flat exports have grown up, so some of that production went to exports. Market share from Morbi. That is helpful. Sir second is we have given our volume guidance but given we have bunching up of festivities this time of the year, we have Diwali and Chhath Puja altogether so do you hear or do you worry about concerns around labor availability which can actually put a concern on volume growth and given there are multiple state level elections are there any historical trends from which basically has labor availability been a problem or is it okay life goes on? If I take you back for the first five months except for the month of July where there was excessive rainfall in North there were no major holidays still we could not do volume growth what we like to do but as you know in last six months of the year if you take it historically for the last 10 years at least the growth has always been better. Whatever you plan happens so holiday will always come, Diwali will always come either in October and November and Chhath will be there all that. Elections per se are beneficial. Whenever local elections are there or national elections are there there is more work in the system. They try to clear more projects so that work can take place so basically it is positive, positive and positive. Kajaria

Kajaria Ceramics Limited October 20, 2023 Sure and lastly if you could give some comments on the pricing and discounting trends what we saw in Q2 and how do you see that in Q3? Whatever has happened has happened in Q2 because the gas prices were like that. Slightly gas prices have went up by Rs.S on September 1,2023, August 21,2023 and September 1, 2023 in Morbi but if you look at that nothing much should happen in Q3. Nothing much should happen as far as the pricing is concerned. Weare not looking at any changes. Sure this is helpful. Thank you so much. All the very best Sir. Thank you. The next question is from the line of Akash Shah from UTI Mutual Fund. Please go ahead. Thank you very much for followup opportunity. Sir we have recently seen that in plywood the company would be able to give a bit higher loan to the subsidiary so any sort of threshold limit that we have the broad amount that we will invest in plywood business? Last year we did Rs.77 Crores turnover in plywood this year we are looking at 100 plus and the loan limit we have not fixed that till now. We look at a positive future going forward and this also should come down as we go ahead so we take it as it comes basically. Sure Sir so as of now the plan is to invest in this business as we see huge opportunity in this business? Yes because the plywood industry size is Rs.27S00 Crores in the country, organized is only Rs.7000 Crores, unorganized Rs.20S00 Crores and the GST coming in we see a lot of shift from the unorganized to the organized peers. It is a big size industry and we are hopeful of gaining some market share as we keep on moving forward. Right sure Sir. Thank you very much Sir. Thank you. The next question IS from the line of Onkar Ghugardare from Shree Investments. Please go ahead. I just wanted to know what is the capacity utilization currently you are working at? Capacity utilization in the Q2 is 98%. You said 98% right? 98%. Kajaria

Kajaria Ceramics Limited October 20, 2023 Thank you very much. Thank you. The next question is from the line of Allvallavhi Rumgta from Robo Capital. Please go ahead. Sir my question relates to the gas so when can we expect the impact of natural gas to be corrected? Natural gas is linked to Brent and we are all aware Brent prices have gone up recently it has touched as high as $97. The prices of gas for us in North would have been much higher but fortunately since we are using biofuel we are safe by that so that is what we said the current price of the Q2 was Rs.38 average. For Q3 we are looking at almost the same scenario plus Rs.l max because otherwise it could have been much much higher so that is a scenario so that is where we are right now. That was very helpful. Thank you. The next question is from the line of Udit Gajiwala from Yes Securities. Please go ahead. Sir just one question earlier you had mentioned that there are no new capacities coming up in Morbi but off late we are seeing some signs of fresh investments coming in over there from the smaller unorganized players so do we see this as the hindrance or you would attribute the same for the export growth? No, our information also say that almost 25 to 30 plants are coming in Morbi but mainly they will be for exports. You are absolutely correct there are 25 to 30 plants coming good size plants are coming I was told and mainly for exports because export market is really picking up so they have they want a bigger share and better share of that pie. Got it. Thank you Sir. Thank you so and all the best. Thank you. Ladies and gentlemen that was the last question for today. I will now like to hand the conference over to Mr. Ashok Kajaria for closing comments. Please go ahead Sir. Thank you very much for all the people who have joined us today and spending their available time. I hope we been able to answer few of the questions that they have put to us and any further questions can be sent to our team of Sanjeev, Nehal and Pallavi for more answers. Thank you very much for joining us today. Thank you. Kajaria

Kajaria Ceramics Limited October 20, 2023 Thank you. On behalf of Equirus Securities that concludes this conference. Thank you for joining us. You may now disconnect your lines.