2 weeks ago
Beyond Cars and Jewellery: India's Overlooked Tile Premiumisation Story
When people in India buy new homes, they are spending more on the finishing touches, like the tiles on their floors.
Fancier tiles called vitrified and glazed vitrified tiles are becoming more popular than basic ceramic ones.
These fancier tiles cost more, so they help tile companies earn more money.
The trend of customers trading up to more expensive products is called premiumisation.
Three Indian tile companies are part of this story: Kajaria Ceramics, Somany Ceramics and Orient Bell.
Orient Bell's sales grew by about 43% in one year, and its profit margin more than doubled.
Somany also grew quickly and improved how efficiently it runs its factories.
Kajaria is already very profitable and is building new capacity to make more premium tiles.
Experts say each company is at a different stage, so investors should check carefully and talk to an advisor before buying these stocks.
Premiumisation is shifting Indian tile demand from basic ceramic tiles towards larger-format vitrified and Glazed Vitrified Tiles (GVT), which command higher realisations.
Orient Bell grew Q1FY27 revenue by nearly 43% year-on-year to ₹201 crore, with operating margin rising from 3.5% to 8.2%.
Somany Ceramics posted 24% year-on-year revenue growth to ₹750 crore in Q1FY27, with operating margin expanding to 12%.
Kajaria Ceramics reported a 20% operating margin in Q1FY27 and is expanding GVT capacity by 10 million square metres, expected by March 2027.
All three companies trade below their five-year median price-to-earnings multiples, but the article cautions this does not necessarily mean the stocks are undervalued.
- Who
- Kajaria Ceramics, Somany Ceramics and Orient Bell, India's three leading ceramic tile manufacturers.
- What
- The three tile makers are benefiting from premiumisation as consumers shift from basic ceramic tiles to higher-value vitrified and Glazed Vitrified Tiles (GVT), improving revenues, margins and profitability.
- Where
- India.
- When
- Q1FY27 results, with valuation data as of 14th August 2026.
- Why
- Rising premium housing demand and greater consumer spending on home finishes are driving the shift to higher-value tiles, which command better realisations and margins.
Optimistic View
Cautious View
Sustainability of earnings growth
Optimistic View
Premiumisation, higher realisations and operational efficiencies will keep improving margins, with company management guiding for continued margin expansion in FY27.
Cautious View
Sharp year-on-year profit growth partly reflects easy comparisons against weak prior-year quarters, such as Orient Bell's loss in Q1FY26, and growth will slow as base effects normalise.
Valuations
Optimistic View
All three stocks trade below their five-year median price-to-earnings multiples, suggesting room for upside as earnings recover.
Cautious View
Historical P/E multiples are misleading because the companies' earnings have changed substantially, so trading below the median does not mean the stocks are undervalued.
Key facts
- Companies covered
- Kajaria Ceramics, Somany Ceramics, Orient Bell
- Orient Bell Q1FY27 revenue
- ₹201 crore, up nearly 43% year-on-year
- Orient Bell Q1FY27 operating margin
- 8.2%, up from 3.5% in Q1FY26
- Somany Q1FY27 revenue
- ₹750 crore, up 24% year-on-year
- Somany Q1FY27 operating margin
- 12%, up from 8% in Q1FY26
- Kajaria Q1FY27 operating margin
- 20%, up from 17% in Q1FY26
- Kajaria GVT capacity expansion
- 10 million square metres, expected by March 2027
- Data source
- Screener.in, as of 14th August 2026
Sources
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