EXXARO - Exxaro Tiles
Financial Performance
Revenue Growth by Segment
Revenue from operations grew 0.84% YoY to INR 304.21 Cr in FY25 from INR 301.68 Cr in FY24. However, H1 FY25 revenue of INR 130 Cr represents a 17% decline compared to INR 156.66 Cr in H1 FY24. Own manufacturing contributed 88.1% (INR 138.11 Cr) of H1 FY24 revenue, while outsourced products contributed 7.6% (INR 11.92 Cr).
Geographic Revenue Split
The company serves both domestic and foreign markets. Domestic sales are recognized upon dispatch, while exports are recognized based on bills of lading. Export capabilities are being expanded to improve revenue, though specific regional percentage splits are not disclosed.
Profitability Margins
Operating margins have seen a significant decline from 20.25% in FY21 to 8.8% in FY24, and further dropped to 4.53% in H1 FY25. The company recorded a net loss of INR 12.17 Lakhs in FY25 compared to a PAT of INR 224.63 Lakhs in FY24.
EBITDA Margin
EBITDA margin stood at 9.7% (INR 15.58 Cr) in H1 FY24, a slight decline from 9.9% (INR 13.62 Cr) in H1 FY23. Operating margins reached a low of 0.25% in Q1 FY25 due to plant closure and intense competition.
Capital Expenditure
Major CAPEX was incurred for the Big Slab line at the Talod Unit in FY24 to focus on premium large-format tiles. Total fixed assets and capital work-in-progress are not explicitly totaled in INR Cr but are linked to the company's premiumization strategy.
Credit Rating & Borrowing
Ratings were downgraded to 'Crisil BB+/Stable/Crisil A4+' in August 2025 from 'CRISIL BBB-/Negative/CRISIL A3' in December 2024. Total bank loan facilities rated are INR 122 Cr. Interest costs increased due to RBI repo rate hikes.
Operational Drivers
Raw Materials
Natural gas, clay, and minerals represent the primary raw materials, with gas prices being a critical and volatile cost driver for vitrified tile production.
Capacity Expansion
Current focus is on the operational use of the newly commissioned Big Slab line at the Talod Unit; specific MTPA capacity figures are not disclosed.
Raw Material Costs
Cost of materials consumed was INR 97.63 Cr in FY25, representing 32.1% of total revenue from operations.
Manufacturing Efficiency
Operating efficiency was hampered by a 3-4 week plant closure for upgradation in FY24/Q1FY25, contributing to a negative PAT of INR 4.27 Cr in Q1 FY25.
Logistics & Distribution
Sales and distribution promotional expenses increased in H1 FY24 to support the brand, impacting short-term profitability.
Strategic Growth
Growth Strategy
Growth is targeted through the expansion of premium product revenue (Big Slabs), increasing export capabilities to global markets, and optimizing the product mix to improve realizations per unit.
Products & Services
Vitrified tiles and large-sized ceramic slabs (Big Slabs).
Brand Portfolio
Exxaro.
New Products/Services
The Big Slab line products are expected to be the primary driver for premium segment revenue growth and improved margins.
Market Expansion
Expansion into export markets is a key strategic focus for FY25 and beyond to leverage manufacturing facilities set for export production.
External Factors
Industry Trends
The ceramic tile industry is shifting toward large-format slabs and premiumization, though it currently faces intense competition and high fuel costs.
Competitive Landscape
Intense competition from both organized and unorganized players in the vitrified tiles market is pressuring realizations and margins.
Competitive Moat
Moderate moat derived from the established 'Exxaro' brand and a strong distribution network of 800+ dealers and 2000+ touchpoints.
Macro Economic Sensitivity
Highly sensitive to the real estate sector and GDP growth; subdued demand in real estate led to a 17% revenue decline in H1 FY25.
Consumer Behavior
Increasing consumer preference for large-sized tiles and premium finishes is driving the company's shift toward Big Slabs.
Geopolitical Risks
Susceptibility to global trade conditions and shipping costs as the company expands its export-related production.
Regulatory & Governance
Industry Regulations
Operations are subject to manufacturing standards and pollution norms for the ceramic industry, though specific compliance costs are not disclosed.
Taxation Policy Impact
Effective tax rate was impacted by a prior period tax adjustment of INR 1.35 Cr in FY25; MAT credit of INR 0.22 Cr was availed.
Legal Contingencies
Prior period tax expense of INR 1.35 Cr recorded in FY25; no other major pending litigation values were disclosed.
Risk Analysis
Key Uncertainties
Volatility in gas prices and the ability to generate sufficient cash accruals to serve yearly debt obligations of INR 7.5 Cr are key uncertainties.
Geographic Concentration Risk
Strong domestic presence with 2000+ touchpoints; currently diversifying through export expansion.
Third Party Dependencies
Outsourced manufacturing accounted for INR 11.92 Cr (7.6%) of H1 FY24 revenue.
Technology Obsolescence Risk
Investment in the Big Slab line at the Talod Unit is a direct response to the risk of technology obsolescence in standard tile formats.
Credit & Counterparty Risk
Bank limit utilization remained high at over 90% through October 2024, indicating tight liquidity and constrained financial flexibility.