Business Overview
Varmora Granito Limited manufactures and sells tiles, comprising glazed vitrified tiles (GVT), polished vitrified tiles (PVT) and ceramic tiles, along with bathware and adhesives. The Company was originally incorporated as “Varmora Granito Private Limited” on November 18, 2003, and is headquartered at Dhuva, Taluka Wankaner, Rajkot, Gujarat. It has commercialised integrated stone technology (IST) since 2024 through a technology partnership with SACMI Imola S.C. of Italy, and is the first company in Asia to implement SACMI’s “V-NATURE BLOCK Technology & Machine”. Its product portfolio comprised over 3,500 stock-keeping units across 20 surface types as of March 31, 2026.
The Company’s strategic focus on premium products has driven its Gross Margin from 35.26% in Fiscal 2024 to 37.92% in Fiscal 2026, with GVT and technical products rising from 75.37% to 84.19% of revenue from tiles over the same period. As of March 31, 2026, 81.72% of revenue from operations was generated from products manufactured in-house across eight manufacturing facilities in the Morbi cluster of Gujarat. The Company also holds an installed production capacity of approximately 6.40 million square meters per annum of GVT tiles through its joint venture, Allemby Ceramics Private Limited, at Tezpur, Assam, which commenced operations in July 2026.
Varmora sells through a multi-channel distribution network comprising 305 exclusive brand outlets (EBOs) and 2,758 multi-brand outlets (MBOs) spread across 988 cities in India as of March 31, 2026, alongside a B2B channel serving builders, contractors, developers and government agencies. Its products have been exported to over 100 countries since inception, and it employed 1,153 permanent employees as of March 31, 2026. Revenue from operations grew from ₹1,435.48 Crore in Fiscal 2024 to ₹1,512.46 Crore in Fiscal 2026, while profit for the year rose to ₹55.09 Crore in Fiscal 2026 from ₹30.77 Crore in Fiscal 2025.
IPO Details
| Particulars | Details |
|---|---|
| IPO Date | September 22, 2026 – September 24, 2026 |
| Tentative Listing Date | September 29, 2026 (BSE and NSE) |
| Face Value | ₹2 per Equity Share |
| Price Band | ₹140 to ₹148 per Equity Share |
| Lot Size | 101 Equity Shares |
| Minimum Retail Investment | ₹14,948 at the upper end of the Price Band |
| Fresh Issue Size | Up to ₹320.00 Crore |
| Offer for Sale Size | 26,217,634 Equity Shares, up to ₹388 Crore at the upper end of the Price Band |
| Total Offer Size | Up to ₹708 Crore at the upper end of the Price Band |
| Post-Issue Market Capitalisation | ₹3,344.98 Crore at the upper end of the Price Band |
| Promoter & Promoter Group Holding (Pre-Offer) | 52.01% |
| Promoter & Promoter Group Holding (Post-Offer, estimated) | ~47.04% |
Objects of the Offer
The Company proposes to utilise the Net Proceeds from the Fresh Issue, with gross proceeds of ₹320.00 Crore, towards the following objects:
| Issue Objects | Est. Amt (₹ Cr.) |
|---|---|
| Repayment/pre-payment, in full or part, of borrowings and accrued interest availed by the Company | 215.00 |
| Repayment/pre-payment, in full or part, of borrowings and accrued interest availed by wholly-owned subsidiaries Covertek Ceramica Private Limited and Varmora Sanitarywares Private Limited, through investment in such subsidiaries | 30.00 |
| General corporate purposes | Not to exceed 25% of Gross Proceeds, i.e. up to ₹80.00 Crore |
| Gross Proceeds from the Fresh Issue | 320.00 |
Key Strengths and Opportunities
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Comprehensive Premium Product Portfolio Led by GVT
The Company’s product portfolio comprised over 3,500 tile SKUs as of March 31, 2026, spanning 20 surface types, with GVT and technical products accounting for 84.19%, 78.71% and 75.37% of revenue from tiles in Fiscals 2026, 2025 and 2024, respectively. GVT commands a 15-30% higher realisation than ceramic and PVT tiles, and the Company’s strategic focus on GVT has driven Gross Margin up from 35.26% in Fiscal 2024 to 37.92% in Fiscal 2026, with realisation of ₹352.26 in Fiscal 2026. All capacity expansion and enhancement at existing manufacturing facilities since 2011 has been dedicated to strengthening the GVT offering. -
Well Diversified Pan-India Distribution Network Focused on EBOs
As of March 31, 2026, the Company’s network comprised 305 EBOs and over 2,758 MBOs across 988 cities in India and abroad. Between April 1, 2023 and March 31, 2026, it converted 136 MBOs into EBOs, with EBO count rising from 256 as of March 31, 2024 to 305 as of March 31, 2026. In Fiscal 2026, the average revenue of an EBO was ₹0.93 Crore against ₹0.27 Crore for an MBO. No single state contributed more than 14% of revenue from operations in Fiscals 2026, 2025 or 2024. -
Strategically Located and Technologically Advanced In-House Manufacturing
The Company operates eight manufacturing facilities through itself and its Subsidiaries in the Morbi cluster of Gujarat, which the Technopak Report identifies as contributing 90% of India’s tile production as of January 2026. Revenue from in-house manufacturing rose from 66.83% of revenue from operations in Fiscal 2024 to 81.72% in Fiscal 2026, aided by two new facilities added in Fiscal 2024 that contributed 17.76 million square meters, or 40.55%, of total installed capacity as of March 31, 2026. The Company was the first in Asia to implement SACMI’s IST technology in 2024. -
Customer-Centric, Innovation-Led Approach
The Company launched over 2,900 new tile SKUs and eight new surface finishes between April 1, 2023 and March 31, 2026, supported by a dedicated R&D team of 17 members and a design team of 20 members as of March 31, 2026. It has also launched a proprietary augmented reality platform, Hybrid Varmora, enabling dealers to virtually preview its full SKU range in customisable digital layouts. All new product launches in Fiscals 2026, 2025 and 2024 were entirely attributable to GVT and technical products.
Key Risks
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High Leverage Relative to Earnings, with Interest Coverage Below 2x
The Company’s total borrowings to total equity ratio stood at 0.44x, 0.68x and 0.59x in Fiscals 2026, 2025 and 2024, on total borrowings of ₹357.95 Crore, ₹505.16 Crore and ₹412.89 Crore, respectively. Its interest coverage ratio was only 1.89x, 1.88x and 1.62x over the same years. Lenders hold charges over the Company’s movable and immovable properties, with financing arrangements requiring lender consent for capital structure changes, amalgamation and diversification. -
Under-Utilisation of Manufacturing Capacity at Several Facilities
Capacity utilisation varied widely and declined at multiple units in Fiscal 2026. Varmora – Unit Solaris fell to 61.37% from 105.49% in Fiscal 2025, Varmora – Unit Tocco fell to 62.40% from 79.55%, and Varmora – Unit Nextile stood at 62.90%. Varmora – Unit 2, dedicated to IST products, operated at 58.59% capacity utilisation in Fiscal 2026. Continued under-utilisation could adversely affect the Company’s ability to realise the benefits of its recent capacity expansion. -
Geographic Concentration of EBOs in Four States
170 of the Company’s 305 EBOs, representing 55.74%, were located in Uttar Pradesh, Rajasthan, Haryana and Gujarat as of March 31, 2026, with 60, 56, 31 and 23 EBOs respectively. Any adverse social, political, economic or regulatory development, or natural calamity, in these states could disproportionately affect revenue contribution from this concentrated EBO base.
Financial Snapshot
| Key Performance Indicator | Units | FY2026 | FY2025 | FY2024 |
|---|---|---|---|---|
| Revenue from Operations | ₹ Cr. | 1,512.46 | 1,446.03 | 1,435.48 |
| Revenue Growth | % | 4.59 | 0.73 | 7.53 |
| Total Income | ₹ Cr. | 1,562.53 | 1,492.68 | 1,472.58 |
| Gross Profit | ₹ Cr. | 592.44 | 581.44 | 519.23 |
| Gross Margin | % | 37.92 | 38.95 | 35.26 |
| EBITDA (before exceptional items) | ₹ Cr. | 221.56 | 198.29 | 150.33 |
| EBITDA Margin | % | 14.18 | 13.28 | 10.21 |
| Adjusted EBITDA | ₹ Cr. | 233.16 | 207.14 | 153.49 |
| Adjusted EBITDA Margin | % | 14.92 | 13.88 | 10.42 |
| Profit for the Year (PAT) | ₹ Cr. | 55.09 | 30.77 | 44.94 |
| PAT Margin | % | 3.53 | 2.06 | 3.05 |
| Basic EPS | ₹ | 3.08 | 1.75 | 2.19 |
| Diluted EPS | ₹ | 3.05 | 1.74 | 2.19 |
| Return on Equity (RoE) | % | 6.80 | 4.14 | 6.39 |
| Return on Capital Employed (RoCE) | % | 9.89 | 6.32 | 7.95 |
| Net Worth | ₹ Cr. | 810.22 | 743.20 | 703.36 |
| Total Borrowings | ₹ Cr. | 357.95 | 505.16 | 412.89 |
| Debt to Equity | x | 0.44 | 0.68 | 0.59 |
| Interest Coverage Ratio | x | 1.89 | 1.88 | 1.62 |
| Net Working Capital Days | Days | 96 | 112 | 82 |
| Net Debt | ₹ Cr. | 243.43 | 390.01 | 314.57 |
| Cash Flow from Operating Activities | ₹ Cr. | 234.07 | 63.21 | 88.29 |
| Capital Expenditure | ₹ Cr. | 33.76 | 111.67 | 348.30 |
| Tiles Sales Volume | Mn. sq. m. | 38.34 | 38.10 | 36.12 |
| Revenue from In-House Manufacturing | % | 81.72 | 78.55 | 66.83 |
| Total Dealer Network (EBOs and MBOs) | Count | 3,063 | 3,005 | 3,315 |
Peer Comparison
| Company | Revenue (₹ Cr.) | P/E (x) | RoNW (%) |
|---|---|---|---|
| Varmora Granito Limited | 1,512.46 | 61.00 | 7.79 |
| Kajaria Ceramics Limited | 4,830.36 | 40.27 | 15.89 |
| Somany Ceramics Limited | 2,789.84 | 28.55 | 8.79 |
| Asian Granito India Limited | 1,858.06 | 72.00 | 1.23 |
| Orient Bell Limited | 691.45 | 47.67 | 3.78 |
Valuation
| Metric | Value (at Cap Price of ₹148) |
|---|---|
| Post-Issue Market Capitalisation | ₹3,344.98 Crore |
| Market Cap / Revenue (FY2026) | 2.21x |
| Industry Peer Group P/E (Average) | 47.12x |
| Enterprise Value (EV) | ₹3,268.40 Crore |
| EV / EBITDA (FY2026) | 14.75x |
Conclusion
Varmora Granito Limited operates in the large and established Indian tile industry, with a strong focus on premium GVT and technical products. The company has steadily increased its in-house manufacturing contribution, expanded its EBO network and invested in product innovation and technology. This premiumisation has supported an improvement in gross margin from 35.26% in FY24 to 37.92% in FY26, while EBITDA margin improved from 10.21% to 14.18% during the same period.
However, the key concern is the company’s relatively slow growth over the past few years. Revenue increased only from ₹1,435.48 Crore in FY24 to ₹1,512.46 Crore in FY26, despite capacity additions and investments. Further, capacity utilisation remains moderate at several facilities, while the interest coverage ratio stood at only 1.89x in FY26.
At the upper price band of ₹148, the company is valued at around 61x FY26 earnings, compared with the peer average P/E of 47.12x. This indicates that the IPO is priced at a slight premium to peers, despite Varmora having lower RoNW than key peers.
Overall, the company has a good business profile and improving profitability, but the valuation leaves limited room for error. Hence, we recommend to Subscribe to this IPO for listing gains.
