Varmora Granito IPO

Strengths · 8

• 01Profit nearly doubled in FY2026, from Rs 30.77 crore to Rs 55.09 crore.
• 02EBITDA has improved every year, from Rs 150.33 crore in FY2024 to Rs 198.29 crore in FY2025 and Rs 221.56 crore in FY2026.
• 03The company cut its borrowing sharply, from Rs 505.16 crore in FY2025 to Rs 357.95 crore in FY2026.
• 04The product mix is premium. Glazed vitrified and technical tiles accounted for about 84% of tile revenue in FY2026, which earns better than plain ceramic tile.
• 05It makes most of what it sells, with 81.72% of FY2026 revenue coming from its own eight plants rather than traded product.
• 06The distribution reach is large, with 305 exclusive brand outlets and 2,758 multi-brand outlets in India and overseas, plus direct sales to builders and developers.
• 07The technology partnership with SACMI of Italy supports its premium and technical tile range.
• 08It has 16.22 MW of its own wind and solar capacity, which helps against the energy cost that dominates tile making.

Risks · 9

• 01This is a very expensive issue on earnings, at about 60.66 times on an EPS of only Rs 2.44.
• 02Return ratios are weak and do not support that multiple. RoNW was 7.79% and RoCE was 9.89%.
• 03Promoter holding is already low at 52% before the issue and falls to 46.55% after it, leaving the promoters below a half share.
• 04Sales have been almost flat for three years, moving from Rs 1,472.58 crore in FY2024 to Rs 1,492.68 crore in FY2025 and Rs 1,562.53 crore in FY2026.
• 05Profit is volatile, at Rs 44.94 crore in FY2024, Rs 30.77 crore in FY2025 and Rs 55.09 crore in FY2026.
• 06The profit margin is thin at 3.53%.
• 07All eight plants are in the Morbi cluster of Gujarat, so any problem affecting that cluster, whether gas supply, labour or regulation, affects the entire company.
• 08Natural gas is a major input for firing tiles, and gas price movements feed straight into cost with little ability to pass them on quickly.
• 09Tile demand follows the construction and real estate cycle, and this is a fresh issue combined with an offer for sale.

Varmora Granito Limited was incorporated in 2003. It manufactures and sells ceramic and vitrified tiles, covering glazed vitrified tiles, polished vitrified tiles and ordinary ceramic tiles. Vitrified tiles are denser and harder than ceramic ones and sit at the premium end of the market.

The company has deliberately tilted towards that premium end. Glazed vitrified and technical tiles made up about 84% of its tile revenue in FY2026. It has also adopted Integrated Stone Technology through a technology partnership with the Italian firm SACMI, which supports the more innovative and premium products.

It runs eight manufacturing facilities in the Morbi cluster of Gujarat, which is India's main tile making centre, and 81.72% of its FY2026 revenue came from tiles it made itself rather than bought in. Its distribution network covers 305 exclusive brand outlets and 2,758 multi-brand outlets across India and overseas, alongside direct business to business sales to builders, contractors, developers and government bodies. It has 16.22 MW of its own renewable energy capacity from wind and solar, and as on March 2026 it had 1,153 permanent employees.

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