India's ceramic tiles industry is witnessing a significant shift towards premiumisation as consumers increasingly move from basic ceramic tiles to larger-format vitrified and Glazed Vitrified Tiles (GVT). According to reports from The Financial Express, this trend is being driven by premium housing becoming a larger part of India's real estate story, with consumers spending more on home finishes. The shift is already visible in stock performance of India's three leading tile makers - Kajaria Ceramics, Somany Ceramics, and Orient Bell - since the start of FY27.
Orient Bell provides the clearest example of premiumisation success, with GVT share reaching 47% of total sales in Q1FY27, compared to only 27% at the start of FY24. As reported by The Financial Express, premium products within its vitrified-tile portfolio increased to 60%, indicating a gradual shift towards higher-value tiles. Somany Ceramics already has 40% GVT share in its mix, with management guiding for it to cross 50% within the next 12-18 months. Kajaria Ceramics has much higher exposure to vitrified products and is further pushing into premium categories through its 'Kajaria 2.0' strategy.
Orient Bell recorded 43% YoY growth in revenue to ₹201 crore in Q1FY27, with operating margin more than doubling from 3.5% to 8.2%. According to The Financial Express, tile sales volume increased 22.9% year-on-year to 63 lakh square metres, while the company cumulatively raised prices by around 20% across its product range. Somany Ceramics reported 24% YoY growth in revenue to ₹750 crore with operating margin expanding by four percentage points to 12%. Kajaria Ceramics maintained strong performance with 11% volume growth and operating margin at 20%, up from 17% a year earlier.
All three companies trade below their respective five-year median price-to-earnings multiples, though this doesn't necessarily indicate undervaluation. As reported by The Financial Express, Orient Bell trades at 24.3 times trailing earnings, below its five-year median of 50.6 times, while Somany trades at 19.5 times, below its five-year median of 31.2 times. Kajaria commands a premium at 34.2 times due to stronger profitability. The key investment consideration is whether these companies can sustain their premiumisation-driven improvements while maintaining volume growth, as price-led revenue growth may normalise over time.
Kajaria Ceramics is expanding its GVT capacity by 10 million square metres, expected to be completed by March 2027, with current manufacturing capacity including 47.35 million square metres of GVT. According to The Financial Express, the company expects to maintain operating margins in the 18-19% range. Orient Bell and Somany are focusing on operational efficiencies and distribution network strengthening to sustain their premiumisation-driven improvements. The opportunity lies in identifying companies where premiumisation is still translating into improving margins and volumes rather than paying premium valuations for already priced-in stories.
