Manoj Ceramic Ltd Management Discussions

Manoj Ceramic Ltd: Scaling a Design-First, Technology-Enabled Surface Solutions Brand Established in 1991 as Manoj & Company, Manoj Ceramic Ltd. (MCPL) commenced its journey as a regional trader of premium construction materials, including marble, granite, cement, and ceramic tiles. Over the past three decades, the Company has transformed into a progressive brand that seamlessly integrates contemporary design, digital capabilities, and agile operations. FY26 represented a year of consolidation and strategic expansion, as MCPL built upon the strong foundation laid in FY25 to further strengthen its export footprint, reinforce its balance sheet, and undertake its first meaningful step towards backward integration. Today, the Company operates as a digitally enabled hybrid enterprise with an integrated value chain spanning contract manufacturing, in-house product design, experiential retail formats, and international distribution. Headquartered in Mumbai, MCPL has established a robust operational presence across Maharashtra, Gujarat, and Karnataka, supported by depots in Morbi, Bhiwandi, Pune, and Bengaluru. Its international footprint is further strengthened through its wholly owned subsidiary in the United Kingdom and, since August 2025, its Dubai Display Centre catering to customers across the GCC region. With a retail footprint of over 1,26,500 square feet across 6 flagship showrooms and a diversified portfolio comprising more than 1,000 SKUs, MCPL continues to strengthen its positioning in the mid-to-premium ceramic and surface solutions segment. MCPLs mission remains centred on democratising design by delivering accessible, technologically advanced ceramic solutions that enable sophisticated and contemporary interiors for every Indian home and project.

Company Overview

Manoj Ceramic Ltd. (MCPL) is a leading provider of ceramic and adhesive solutions in India, recognised for its extensive product portfolio spanning across 1000 SKUs, innovative customer engagement, and technology-driven retail experiences. Headquartered in Mumbai, the Company commenced operations as a trading business in 1991 and has since evolved into a hybrid business model integrating contract manufacturing, design curation, omnichannel retail, and international distribution. With a well-established distribution network across Maharashtra, Goa, Tamil Nadu, and Karnataka, six experiential showrooms, a portfolio of over 1,000 SKUs, and an international presence through its wholly owned subsidiary in the United Kingdom, further complemented by the establishment of a Dubai Display Centre, MCPL has further reinforced its position in the mid-to-premium ceramic and surface solutions market.

During FY26, the Company operationalised its cutting and polishing facility of Natural Stones at Upper Thane, marking its first strategic step towards backward integration. The Company also continued to strengthen its leadership team, with Mr. Akash Manoj Rakhasiya assuming responsibility for the export business as Executive Director, alongside Managing Director Mr. Dhruv Rakhasiya and Chief Financial Officer Mr. Pankaj Rakhasiya.

Macro-Economic and Industry Landscape

India remained the worlds fastest-growing major economy during FY26. According to the Provisional Estimates of National Income released by the Ministry of Statistics and Programme Implementation (MoSPI) in June 2026, Indias real GDP grew by 7.7% in FY26, accelerating from 7.1% in FY25, while real GVA expanded by 7.9%. Growth remained broad-based, led by manufacturing (10.7%) and services (9.3%), with the economy sustaining strong momentum through the year as fourth-quarter GDP growth stood at 7.8%. Nominal GDP crossed 346 lakh crore, supported by healthy growth in household consumption and gross fixed capital formation, reflecting broad-based economic expansion. The favourable macroeconomic environment continued to create structural tailwinds for MCPLs core end markets. Financial, real estate and professional services recorded 9.9% growth during FY26, reflecting sustained demand across housing, renovation and premium real estate segments that underpin the Companys tile and adhesive businesses. Government-led infrastructure and housing investments also remained strong, with the Union Budget allocating approximately 11.2 lakh crore towards capital expenditure, including continued investments in PMAY-Urban, metro rail, highways and railway infrastructure, supporting long-term demand for ceramic tiles, adhesives and allied surface solutions. The residential real estate market remained resilient during the year, supported by rising housing sales, firm property prices and continued premiumization across key urban markets. This trend aligns well with MCPLs focus on the mid-to-premium segment and its expanding portfolio of value-added offerings, including Glue-Finish Tiles, Wooden Planks, Exotic Stones and Next-Generation Quartz. At the same time, increasing urbanisation and rising consumption across Tier 2 and Tier 3 cities continue to expand the Companys long-term addressable market. The Indian ceramic tiles industry also continued its structural growth trajectory. Valued at approximately USD 10.45 billion in 2025, the domestic market is projected to grow at a CAGR of 13.54% through 2030, while the global ceramic tiles market is expected to witness steady expansion, supported by urbanisation, infrastructure development and evolving consumer preferences. Morbi, Gujarat, remains the manufacturing hub of the industry, housing over 800 manufacturing units that contribute nearly 70% of Indias ceramic tile production and collectively produce over 2 billion square metres annually. Continued formalisation of the industry is expected to strengthen the competitive position of organised, technology-enabled players with established brands and differentiated customer offerings.

These macroeconomic and industry trends reinforce MCPLs medium-term growth strategy by supporting sustained demand in its core domestic business, accelerating the shift towards premium product categories, and creating opportunities for deeper retail and dealer network expansion across existing and emerging markets.

Business Segments, Products and Capabilities

MCPLs business encompasses ceramic tiles, tile adhesives, and allied value-added solutions. The Companys product portfolio has expanded to over 1,000 active SKUs, spanning formats from 300x300 mm to 3200x1620 mm, including quartz slabs. The portfolio covers floor tiles, wall tiles, fa?ade solutions, and large-format slab categories, offered in a diverse range of finishes such as Matt, Glossy, Posh Finish, Full-Body, Italian Marble, Super High Gloss, Glitter, Metallic, Wooden, and Rustic. These products are supported by advanced manufacturing technologies, including Random Digital, Screen Print, Mould Rectified, Double Charge, Third Fire Polish, Vitrified, Full Body, GVT, Porcelain, and Colour Body. During FY26, the Company further strengthened its premium product offering through the launch of new collections such as Glue-Finish Tiles, Wooden Planks, Exotic Stones, and Next-Generation Quartz, aimed at enhancing average selling prices and reinforcing its premium market positioning. The portfolio was further complemented by the introduction of imported natural marble under the Marmi Bella brand. The adhesive business continues to be anchored by MCPLs proprietary formulations, including Cluster Floor Thin Set, Nebula Floor & Wall Thin Set, Galaxy Grey/White Floor & Wall Thin Set, and Universe Premium Floor. Designed to cater to a wide range of substrates, including vitrified surfaces and natural stones, these solutions are increasingly being adopted for large-format tile installations. The products are distributed through the Companys extensive dealer network, retail showrooms, B2B channels, and export markets, creating a value-added, service-oriented extension of its core tile business. A key differentiator for the Company continues to be its proprietary AI-powered MCPL Studio, a visualisation platform that enables customers to digitally preview tiles and surface applications within actual room environments prior to purchase. During FY26, the platforms capabilities were further enhanced through deeper integration with WhatsApp-based automation and the Companys CRM systems. These enhancements contributed to a 20-25% reduction in customer acquisition costs and a 25-40% improvement in conversion rates during the year, demonstrating that MCPL Studio has evolved beyond a brand differentiator into a technology platform delivering measurable commercial outcomes. MCPL operates flagship showrooms across Mumbai (Andheri and Ghatkopar), Pune, Bangalore, and Upper Thane, including a newly established Jaquar Partnership Centre that showcases ceramics alongside sanitaryware solutions for premium interior applications. The Companys logistics network is supported by strategically located warehouses in Morbi, Bhiwandi, Mumbai, Pune, and Bangalore, with the Pune warehouse becoming operational in May 2025. During FY26, the Company also commenced the commissioning of a warehouse in Nagpur, aimed at further improving delivery efficiency and reducing turnaround times. Internationally, its UK subsidiary continues to strengthen regional warehousing, localised sales, and compliant logistics capabilities. In addition, the newly established Dubai Display Centre, inaugurated in August 2025, has expanded MCPLs presence across the GCC region while serving as a gateway to sovereign-level business opportunities in African markets, including Burundi, Angola, Sudan, and Senegal.

Financial and Operational Performance

MCPL delivered another year of growth in FY26, albeit at a more measured pace following the exceptionally strong performance recorded in FY25. On a consolidated basis, revenue increased by 23.4% year-on-year to 202.62 crore (total income of 202.99 crore), supported by sustained momentum across the retail, dealer, and project segments. EBITDA stood at 24.88 crore, with the EBITDA margin moderating to 12.26% from 14.00% in FY25. This moderation was primarily attributable to a temporary shift in the second half of FY26 towards higher-volume, lower-margin service contracts. Management has indicated that this mix is expected to normalise through FY27 as the contribution from premium products and export revenues continues to increase. Profit after tax rose by 10.1% year-on-year to 12.01 crore, with the PAT margin standing at 5.92%, compared with 6.64% in the previous year. The Company also delivered a meaningful improvement in the quality of its balance sheet during the year. Debtor days reduced from 161 days to 111 days, while trade receivables declined from approximately 72.61 crore to around 63.10 crore despite higher business volumes, reflecting stronger collection efficiencies even as the dealer network expanded across Tier II and Tier III markets. Long-term borrowings were nearly halved, declining from 28.98 crore to 13.89 crore, while the overall working capital cycle improved by approximately 23.37% during the year. These improvements were achieved alongside continued investments in export infrastructure, the Upper Thane manufacturing facility, and the Companys ongoing digital transformation initiatives.

Strategic Initiatives and Investments

FY26 marked a year of strong strategic execution, building upon the foundation established in FY25. Key milestones during the year included the inauguration of the Dubai Display Centre in August 2025, creating a formal gateway to the GCC export market; the strengthening of sovereign-level relationships across key African markets, including Burundi, Angola, Sudan, and Senegal; and the operationalisation of the Upper Thane cutting and polishing facility. As MCPLs first step towards backward integration, the facility has enhanced operational control over deliveries while reducing design-to-production lead times by 20-30%. The Company also expanded its premium product portfolio with the introduction of Glue-Finish Tiles, Wooden Planks, Exotic Stones, and Next-Generation Quartz, complementing its existing Marmi Bella range of imported natural marble. These initiatives are aligned with the ongoing premiumization trend across Indias interiors and construction industry. On the risk management front, MCPL became the first player in its sector to secure Trade Credit Insurance in October 2025, providing claim protection of up to 90% across the substantial majority of its domestic receivables and enabling the Company to expand its dealer network into new geographies with greater confidence. The Companys digital ecosystem was further reinforced through deeper CRM integration, enhanced WhatsApp-based automation, and the continued advancement of its proprietary AI-powered MCPL Studio platform.

Working Capital and Financial Metrics

MCPL continued to maintain a disciplined approach towards capital allocation during FY26, with debtor days improving from 161 days to 111 days and the working capital cycle improving by approximately 23.37% compared to FY25 levels. Inventory days remained broadly stable in the range of 112-115 days, reflecting prudent inventory management despite the expansion of the Companys SKU portfolio and premium product offerings. Long-term debt declined from 28.98 crore to 13.89 crore, underscoring the Companys continued focus on deleveraging. However, short-term borrowings increased to support the higher working capital requirements arising from business growth and the expansion of the dealer network. Based on the Companys FY26 financial statements, key financial ratios reflected the following movements. As these ratios have been derived from the consolidated FY26 income statement and balance sheet figures disclosed in the Companys FY26 investor communications, the Board recommends that these ratios be read in conjunction with, and reconciled against, the final audited standalone and consolidated financial statements at the time of adoption of this report.

Sr. No.	Particulars	FY 2025-26	FY 2024-25
1	Debtors Turnover	2.96	2.65
2	Inventory Turnover	3.64	4.36
3	Interest Coverage Ratio	3.09	3.12
4	Current Ratio	2.47	3.19
5	Debt Equity Ratio	0.51	0.54
6	Operating Profit Margin (%)	11.80%	13.46%
7	Net Profit Margin (%)	5.92%	6.64%

Return on Equity decreased from 15.60% to 9.67% primarily due to increase in average shareholders funds during the year, which increased from 106.53 Cr to 138.54 Cr.

The moderation in Operating Profit Margin and Net Profit Margin was primarily attributable to a higher-volume, lower-margin service and project mix during H2 FY26. Management has characterised this shift as temporary and expects margins to improve as the contribution from premium product offerings and exports scales up through FY27. The normalization of the Current Ratio alongside the improvement in the Debt-Equity Ratio reflects the Companys prudent capital management and focus on strengthening its balance sheet, while efficiently deploying working capital to support business expansion. Debtors Turnover and Inventory Turnover remained broadly aligned with the Companys expanded scale of operations and the growth of its dealer network.

Risk Management

MCPL continues to adopt a proactive and structured approach to risk management, supported by a well-defined framework encompassing vendor diversification across the Morbi manufacturing cluster, natural hedging of export transactions through currency matching, rigorous B2B credit evaluation processes, robust internal audit mechanisms, and ERP-enabled operational governance. During FY26, the Company became the first player in its sector to secure Trade Credit Insurance covering its domestic receivables, providing claim protection of up to 90%. This significantly reduced counterparty credit risk while supporting the Companys continued expansion of its dealer network across Tier II and Tier III markets. The Company also remains focused on mitigating market volatility arising from input-cost fluctuations and supply chain disruptions, including those experienced in the Morbi manufacturing cluster during the year. These risks are addressed through flexible sourcing strategies, pre-planned inventory positioning with manufacturing partners, and the Companys asset-light, outsourced manufacturing model requiring no incremental manufacturing capex. This operating model limits MCPLs direct exposure to fixed overheads, kiln maintenance expenses, and fluctuations in fuel and gas prices, thereby enhancing operational resilience.

Industry Positioning - Domestic and Global

Domestically, MCPL is positioned as a mid-to-premium brand that combines technology-driven innovation with contemporary lifestyle aesthetics. Its extensive product portfolio, complemented by MCPL Studios digital visualisation capabilities and design advisory services, caters to both retail and institutional customers. The Companys customer base includes several marquee names such as ICICI Bank, Marriott Hotels, Starbucks, Raymond, Reliance Jio, and Zepto. In addition, the adhesive business continues to strengthen MCPLs integrated value proposition by providing a service-led offering that differentiates the Company from pure-play tile retailers. Internationally, MCPLs export strategy is anchored by the newly established Dubai Display Centre, which serves as its gateway to the GCC region, supported by its UK subsidiary and growing sovereign-level relationships across key African markets. While exports currently contribute a modest share of revenue (approximately 1%), the Company is targeting an increase to approximately 20% of total revenue over the next three years. As institutional and sovereign-level supply relationships continue to deepen, exports are expected to emerge as an important margin-accretive driver of long-term growth.

Technology Enablement and Digital Innovation

MCPL continues to view digital transformation as a key strategic enabler across product innovation, customer engagement, and operational excellence. Building on the ERP-led digitisation of order and inventory management, together with the AI-powered MCPL Studio platform introduced in earlier years, the Company further strengthened its digital capabilities during FY26 through enhancements to the Studio platform, expanded WhatsApp Commerce automation, and deeper CRM integration across its omnichannel customer journey. These investments in technology translated into measurable commercial benefits during FY26. Customer acquisition costs declined by 20-25%, while conversion rates improved by 25-40%, underscoring the platforms increasing effectiveness in reducing consultation time, minimising product returns, and accelerating purchase decisions across architects, homeowners, and institutional customers. Looking ahead, the Company intends to further strengthen its digital ecosystem through deeper CRM and analytics integration, expansion of digital customer acquisition channels, and continued enhancement of the AI-powered MCPL Studio platform to drive higher conversion efficiency as the business scales.

SWOT Analysis

MCPLs key strengths include a broad and continuously expanding product portfolio, AI-enabled personalisation through MCPL Studio, a growing adhesive business, an asset-light manufacturing model, and a progressively strengthening balance sheet. The Companys key weaknesses include its continued dependence on outsourced manufacturing for the majority of its production requirements, and its relatively higher geographic concentration across Western and Southern India. The Companys growth opportunities are driven by increasing demand across Tier II and Tier III markets, the planned scale-up of exports across the GCC and African regions, the growing adoption of ESG-aligned products and innovations, and continued progress towards migration to the Main Board. Key risks include input cost inflation, foreign exchange volatility, potential supply chain disruptions within the Morbi manufacturing cluster, as experienced during FY26, and intensifying competition from both established organised players and the unorganised segment.

Growth Catalysts

Several external trends continue to provide structural growth opportunities for MCPL. Government-led housing initiatives, sustained infrastructure investments under programmes such as the Smart Cities Mission and Bharatmala, and the expansion of Indias hospitality and industrial real estate sectors, supported by PLI schemes across 14 sectors, are contributing to demand growth across both residential and commercial tile applications. Rising urbanisation, increasing per-capita income levels, and the accelerating premiumisation trend within the interiors and construction ecosystem continue to support the adoption of differentiated products, including digitally printed surfaces, stone-look finishes, large-format tiles, and designer collections. These trends remain closely aligned with MCPLs Studio-led, design-focused approach. The Companys asset-light, zero-capex outsourced manufacturing model, complemented by its Upper Thane backward-integration facility, provides the operational flexibility to respond effectively to evolving market opportunities while enabling progressive improvement in margin realisation.

ESG, Human Capital and Governance

MCPL continues to align its governance framework with the requirements applicable to companies listed on the SME platform of SEBI, supported by ERP-enabled monitoring systems, periodic internal audits, and transparent disclosure practices. During FY26, the Companys key risk mitigation initiative was the implementation of sector-first Trade Credit Insurance, providing claim protection of up to 90% on domestic receivables and enabling a more secure and disciplined approach towards expansion of the dealer network. As on March 31, 2026, the Company had 166 employees on its rolls. The Company continues to recognise the contribution of its employees and strives to provide a cordial, safe, and growth-oriented work environment. Employee productivity and relations during the year remained satisfactory and harmonious.

Internal Controls and Assurance

The Company continues to maintain a robust internal control framework supported by an integrated ERP platform, real-time management dashboards, and automated approval workflows. Quarterly internal audits, periodic compliance reviews, and well-defined maker-checker controls across functions reinforce the effectiveness of its financial and operational governance framework, ensuring continued adherence to the internal control standards established in previous years.

Future Outlook

MCPLs strategic roadmap for FY27 and beyond is anchored around four key priorities. The first is to scale export contribution towards a double-digit share of revenue, leveraging the Dubai Display Centre as the Companys gateway to the GCC region while continuing to strengthen sovereign-level partnerships across African markets. The second is to expand its retail and distribution network from the current six experience centres to 8-10 locations, alongside increasing its retail footprint from over 1,26,500 sq. ft. to more than 1,75,000 sq. ft. and commissioning the Nagpur logistics hub to further enhance distribution efficiency. The third priority is to deepen the Companys digital ecosystem through greater integration of CRM, analytics, and omnichannel capabilities, while further enhancing the AI-powered MCPL Studio platform to improve customer engagement and conversion efficiency. The fourth is to strengthen the premium product mix through Next-Generation Quartz, imported surfaces, and customised, design-led solutions, with the objective of restoring and expanding EBITDA margins from FY26 levels. Over the medium term, the Company is targeting a sustainable revenue CAGR of 25-30% over the next three years, building upon the approximately 40% revenue CAGR achieved between FY22 and FY26. Beyond financial growth, MCPLs long-term strategic roadmap continues to encompass migration to the Main Board, the development of in-house design lab capabilities, and deeper omnichannel retail integration, reinforcing its vision of becoming a globally recognised, technology-enabled premium surface solutions brand.

Cautionary Statement

Certain statements contained herein describing the Companys objectives, projections, estimates, expectations, or outlook may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, regulatory developments, and other risks and uncertainties.

For and on behalf of Manoj Ceramic Limited

Dhruv Manoj Rakhasiya Managing Director DIN: 03256246