Ahmedabad: Varmora Granito’s net profit surged 498% year on year to Rs 53.7 crore in the first half of FY27, as a shift towards premium tiles boosted margins despite modest revenue growth. The Morbi-based tile maker has been moving away from ceramic and polished vitrified tiles (PVT) towards glazed vitrified tiles (GVT) over the past two years.Bhavesh Varmora, chairman and managing director of Varmora Granito, attributed the improvement in incremental margins to this shift in product mix and the growing contribution of higher-value surfaces.“GVT and technical products, including integrated stone technology (IST) and slabs, accounted for 87% of revenue in H1 FY27, compared with 83% a year earlier. Revenue from operations grew 3.3% to Rs 714.2 crore during the period,” he said.The Sept quarter also saw a recovery after a gas-price disruption affected production in Morbi during the June quarter. Revenue from operations rose 27% sequentially to Rs 399 crore in Q2 FY27, while net profit increased to Rs 44 crore from Rs 9.7 crore in Q1.Varmora said, “Sales volumes remained broadly unchanged from the preceding quarter, despite the increase in revenue. This points to the role of pricing and product mix in the recovery, although their individual contributions need further clarification.”Morbi’s ceramic tile manufacturers faced a sharp rise in gas prices following the West Asia conflict. Prices climbed from around Rs 48 to Rs 88 per standard cubic metre, disrupting production until mid-April. Varmora reported a 16% year-on-year decline in Q1 volumes.The company raised prices by 18-19%, depending on the product category, to offset higher fuel costs. According to its earnings release, these increases fully recovered the additional gas costs. Average gas costs eased to Rs 80.5 per standard cubic metre in Q2 from Rs 84.7 in Q1.Varmora expects exports to improve in Q3 and strengthen further in Q4. The company intends to focus on branded exports rather than white-label business. He also cited container availability and logistical constraints among the challenges facing exporters.The company’s first results since its Sept 29 listing follow an initial public offering of Rs 708 crore. Varmora said proceeds from the fresh issue were used to repay debt, strengthening its balance sheet and reducing future interest costs.The company added four exclusive brand outlets during the first half, taking the total to 309, alongside more than 2,000 multi-brand outlets. It also launched 508 new designs during the period.
