"KAJARIA'S PURSUIT OF GROWTH HAS ALWAYS BEEN DRIVEN BY A
STRATEGIC FOCUS ON DIFFERENTIATION AS WELL AS RELENTLESS EXECUTION. AS OUR STRATEGIC
BLUEPRINT UNFURLS INTO ON-GROUND REALITY, WE WILL FURTHER STRENGTHEN OUR POSITION TO
CAPITALISE ON THE UPSWING IN THE REAL ESTATE MARKET."
Chetan Kajaria
Joint Managing Director
Having ended the year on a positive note, we are enthused about our
prospects as we envision a future brimming with promise across the nation and beyond.
Dear shareholders,
We are pleased to present your Company's 38th Annual Report, which
narrates its well-rounded performance across key metrics despite sustained demand
challenges witnessed in the domestic market and heightened competitive intensity resulting
in drop in realisations across the tile categories. However, the dedication of our
employees has played a defining role in achieving steady progress in the face of
significant turbulence.
Having ended the year on a positive note, we are enthused about our
prospects as we envision a future brimming with promise across the nation and beyond.
There is no denying that India's economic narrative paints a significantly bright
picture. With a government-led push to infrastructure investments and pragmatic policies
such as the production-linked incentive scheme, private capex should continue to surge.
This rise triggers a multiyear boom, providing invaluable impetus to economic growth in a
challenging global environment.
Drilling down to the sectors that consume tiles, we are optimistic
about going forward.
Infrastructure: India continues to invest aggressively in creating
world-class infrastructure. Some investment avenues, such as airports, extensions of
existing airports, metro and railway stations development projects promise to generate
massive demand for tiles. Additionally, private sector investment in healthcare
infrastructure and educational institutions will further add to the demand for tiles.
Urban real estate: While gated-community living and verticalisation
continue to thrive in urban India, there appears to be considerable focus on
reconstructing century-old and decades-old buildings, which are at risk. Moreover, new
commercial space creation is witnessing heightened activity for diverse reasons.
Semi-urban real estate: This is a new and emerging opportunity
whose time has come. We firmly believe that as we advance, tier 2 and 3 cities will
provide the most potent avenue for growth. After altering India's urban skyline, the
real estate sector is all set to transform the landscape in tier 2 and tier 3 cities. With
a staggering housing demand of 93 million units forecasted by 2036, developers are
increasingly turning their attention to tier 2 and 3 cities.
Rishi Kajaria
Joint Managing Director
While business growth is a top priority at Kajaria, our commitment to
protecting the environment and promoting sustainable economic growth for all our
stakeholders remains at the very core of our decision-making framework.
We are convinced that the avenues for growth are improving with
opportunities emerging from every corner of our huge nation. Under these circumstances,
players with the right product and presence will maximise the gains and elevate themselves
into a new growth orbit. We are happy to state that Kajaria is well-placed in this regard,
with a pan-India manufacturing presence an entrenched distribution network.
Despite this edge, we continue to invest in our strengths. Having
envisioned the real estate development transition from urban hot spots to semi-urban pin
codes, we have focused on creating new dealers and showrooms in tier 2 and 3 cities. Most
of our new showrooms were launched in semi-urban India in the last three years. We will
continue building a strong presence in these cities over the coming years. FY24 was an
important milestone in our history as we decided to set up our first manufacturing
facility beyond the Indian borders. We plan to commence operations of our greenfield
facility in Nepal in September 2024.
Estimates suggest that Nepal imports tiles worth C12-15 billion
annually. Moreover, high import duty make tiles expensive for the locals. Our
manufacturing presence in Nepal will allow us to capitalise on growing opportunities
effectively. Aligned with the significant uptick in real estate expected to extend for the
next decade, we are also investing in our flanking business verticals. In FY24, we
commenced operations of our state-of-the-art greenfield sanitaryware unit (4.5 lakh pcs
p.a.) towards the close of the year.
This unit, dedicated to delivering value-added products, should
strongly contribute to business growth over the coming years. Considering the challenging
demand environment and sustained trend of increasing timber prices, we have decided to
adopt a measured approach in terms of growth while focusing on reducing our losses in the
plywood segment. Also, we will be setting up a manufacturing facility for tile adhesive,
our most recent venture, which has considerable potential. We expect this unit to come on
stream in December 2024. While FY24 was a year of intense brainstorming, discussion,
deliberations and important decision-making, during which we decided on multiple
investment strategies, FY25 will be a year of execution to bring our plans to fruition.
We plan to invest C225-250 crore per annum for the next three years in
gearing our business for the next round of growth, which should take us to C6,500 crore
topline by FY27.
While business growth is a top priority at Kajaria, our commitment to
protecting the environment and promoting sustainable economic growth for all our
stakeholders remains at the very core of our decision-making framework. This is aligned
with our values and legacy and underscores our dedication to responsible business
practices. As we move forward in our aspirations positively, we gratefully acknowledge
your continued trust and faith in us. We assure you of progressive growth in shareholder
value year after year.
We owe our progress to our employees' hard work and dedication,
who have shown remarkable commitment even in difficult times. We are deeply grateful for
the unwavering support and encouragement from all our stakeholders. We sincerely thank our
customers, dealers, local communities, suppliers, bankers and all other business
associates for their steadfast trust and support in our organisation. Warm regards,
The management team