Varmora Granito IPO

Varmora Granito Limited IPO Strengths

Strategic Innovation and Product Excellence

Varmora Granito Limited demonstrates a customer-centric, innovation-led approach by consistently launching new products, including industry firsts. The company’s dedicated R&D and design teams explore global trends to create a diverse and attractive portfolio, maintaining a competitive edge in the market by prioritizing product durability and quality.

Strong Pan-India Distribution Network

The company has a well-diversified pan-India distribution network, primarily focused on exclusive brand outlets (EBOs), which strengthens its brand recall. Its extensive network of over 286 EBOs and 2,000 multi-brand outlets (MBOs) across India minimizes dependency on a few dealers or geographies, ensuring a de-risked and widespread presence.

In-House Manufacturing Capabilities

Varmora Granito Limited operates nine strategically located and technologically advanced in-house manufacturing facilities in Morbi, Gujarat, a major tile-producing hub. This allows for end-to-end quality control and supply chain management. The company is a leader in adopting new technologies, such as the industry-first IST in Asia, which enhances product offerings and operational efficiency.

Experienced Leadership and ESG Focus

The company benefits from an entrepreneurial, founder-led management team with extensive industry expertise. The board is independent and a dedicated ESG head has been appointed, a unique position in the Morbi cluster. This strong leadership, combined with a focus on sustainability and robust governance, drives growth and talent retention.

More About Varmora Granito Limited

Market Leadership and Growth

Varmora Granito Limited is recognised as one of the leading players in the Indian tiles market in terms of revenue for Fiscal 2025 among selected listed peers (Source: Technopak Report). Between Fiscals 2023 and 2025, it recorded the fastest revenue CAGR in the Indian tiles industry, driven by its focus on innovation and premiumisation. The company has consistently leveraged technology to advance design and quality standards.

Key innovations include:

• First to launch digitally printed wall tiles in 2010.

• Introduced homogenous-body slabs (1170 x 1770 mm and 1185 x 1785 mm) in 2006.

• Pioneered double charge tiles in 2012, high gloss and rocker in 2017, and kitchen slabs (80×260) in 2020.

• First to commercialise Integrated Stone Technology (IST) in Asia in 2024, in partnership with SACMI, Italy.

Premium Product Focus

Varmora Granito Limited offers a diverse product portfolio comprising over 3,500 SKUs, including GVT, PVT, and ceramic tiles across 20 surface types. Glazed vitrified tiles (GVT) have been a primary focus, accounting for 78.71%, 75.37%, and 69.35% of tile revenue in Fiscals 2025, 2024, and 2023, respectively. This focus has enhanced gross margins from 37.48% in Fiscal 2023 to 38.95% in Fiscal 2025, supported by superior realisations and profitability compared to other tile segments.

Manufacturing Capabilities

The company operates nine strategically located manufacturing facilities in Morbi, Gujarat, producing 78.55% of its products in-house. Advanced machinery and ISO-certified facilities ensure control over quality and costs, enabling rapid product development and market introduction. Varmora has added the most manufacturing capacity among peers between 2016 and 2025.

Distribution and Retail Network

Varmora Granito Limited maintains a pan-India multi-channel distribution network:

• 286 exclusive brand outlets (EBOs) and over 2,000 multi-brand outlets (MBOs).

• B2B relationships with builders, contractors, developers, and government agencies.

• Exports to over 100 countries, managed by a dedicated team of 47 individuals.

Governance and ESG

Led by its founders with support from an experienced management team, the company emphasises governance, sustainability, and employee ownership through ESOPs. Strategic investments from global partners like Carlyle Group have strengthened operations, technology, and market presence.

Through innovation, premiumisation, and a robust distribution footprint, Varmora Granito Limited has established “Varmora” as a trusted brand synonymous with high-quality and aesthetically advanced tile solutions.

Industry Outlook

The Indian ceramic tiles industry is experiencing robust growth, driven by urbanization, rising disposable incomes, and evolving consumer preferences. The market is projected to expand significantly over the next decade, with varying growth rates reported by different sources:

• Mordor Intelligence estimates the market size at USD 10.45 billion in 2025, growing at a CAGR of 13.54% to reach USD 19.71 billion by 2030.

• Marketsandata forecasts a CAGR of 7.19% from FY2026 to FY2033, increasing from USD 7.03 billion in FY2025 to USD 12.25 billion by FY2033.

• IMARC Group anticipates a CAGR of 3.40% from 2025 to 2033, reaching 1,666.92 million square meters by 2033.

Key Growth Drivers

• Urbanization: Approximately 36.6% of India’s population resided in urban areas in 2024, with projections indicating 40% by 2030. This urban shift is fueling demand for residential and commercial spaces.

• Premiumization: Increasing disposable incomes are leading consumers to opt for higher-quality, aesthetically appealing tiles, contributing to market growth.

• Government Initiatives: Programs like the Pradhan Mantri Awas Yojana (PMAY) are promoting affordable housing, thereby boosting demand for ceramic tiles.

Market Segmentation

• By Application: The residential sector holds the largest share, driven by urban housing projects and home renovations.

• By Product Type: Glazed Vitrified Tiles (GVT) and Porcelain Vitrified Tiles (PVT) are gaining popularity due to their durability and aesthetic appeal.

• By Sector: The organized sector is expanding, with projections indicating an increase from 57% in FY2025 to 66% by FY2029, growing at a CAGR of 9.4%.

Challenges

• Unorganized Sector: Approximately 70% of tile manufacturers in India operate in the unorganized sector, posing challenges for organized players in maintaining market dominance .

• Price Competition: Intense price wars and margin pressures are prevalent, especially in the unorganized segment, affecting overall industry profitability.

How Will Varmora Granito Limited Benefit

• Varmora Granito Limited is well-positioned to benefit from urbanization, as its extensive distribution network and premium tile offerings cater to the growing residential and commercial demand in urban areas.

• The rising preference for premium and aesthetically appealing tiles aligns with Varmora’s focus on Glazed Vitrified Tiles (GVT) and high-end designs, supporting higher realisations and improved margins.

• Government initiatives like PMAY will drive housing demand, boosting the company’s domestic sales opportunities.

• Expansion in the organized sector provides Varmora an advantage due to its established brand presence, Exclusive Brand Outlets (EBOs), and multi-brand outlets (MBOs), enabling better market capture.

• Innovations such as Integrated Stone Technology (IST) and digitally printed tiles allow Varmora to differentiate from competitors and strengthen its premium positioning.

• The company’s in-house manufacturing ensures control over quality and cost, allowing it to respond efficiently to increasing demand and evolving consumer preferences.

• Varmora’s focus on exports positions it to leverage global growth in premium tile consumption.

Peer Group Comparison

Name of the Company	Revenue (₹ million)	Face Value (₹)	P/E Ratio (x)	EPS (₹)	RoNW (%)	NAV (₹)
Varmora Granito Limited	14,460.29	2	[●]	1.75	4.88%	35.85
Peer Group
Kajaria Ceramics Limited	46,350.70	16	3.57	18.48	10.98%	172.30
Somany Ceramics Limited	26,587.60	2	36.88	14.65	7.78%	118.16
Asian Granito India Limited	15,585.20	12	8.96	2.03	2.01%	93.02
Orient Bell Limited	6,697.66	10	15.91	1.94	0.90%	216.65

Key Strategies for Varmora Granito Limited

Strengthening Core Market Leadership

Varmora Granito Limited aims to reinforce its position in northern and western India by converting MBOs to EBOs, launching new surface designs, and partnering with marble dealers for IST products, while premiumisation drives higher realisations, attracting affluent customers and enhancing brand perception.

Expanding Presence in Emerging Markets

The company plans to increase its footprint in eastern and southern India by opening new MBOs and EBOs, expanding sales teams, and strengthening direct sales to key accounts and government projects, supported by improved logistics and warehousing for timely, cost-effective delivery.

Strategic Acquisition in East and Northeast India

By acquiring a 51% stake in Allemby and establishing a Tezpur manufacturing facility, Varmora Granito Limited targets underpenetrated eastern and northeastern markets, leveraging government incentives, rising urbanisation, and local raw material availability to reduce costs, enhance service levels, and boost regional market share.

Expanding Distribution Network with EBO Focus

Varmora plans to convert over 2,000 MBOs into EBOs, including larger stores in Tier II and III cities, improving brand visibility, margins, product placement, customer experience, and direct market feedback, thereby strengthening market position and supporting sustainable growth.

Accelerating Brand-Building and Partner Engagement

The company seeks to strengthen relationships with architects, builders, contractors, and dealers through product events, loyalty programs, and continuous engagement, enhancing brand visibility, optimizing production decisions, and driving higher sales growth across its network.

Comprehensive Marketing and Product Communication

Varmora continues to employ an integrated marketing strategy across ATL, BTL, and digital channels, focusing on high-traffic locations like airports, cinema screens, and social media, to highlight product features, reinforce brand value, and enhance customer engagement.

Technology-Driven Customer Experience and Efficiency

Through HybridVarmora AR platform, digital tools, ERP upgrades, and sales force automation, the company aims to improve customer experience, reduce costs, optimize supply chains, and enhance operational efficiency while leveraging technology to strengthen competitiveness.

Innovation and Premiumisation of Products

Varmora continues investing in advanced tile technologies, IST, GVT expansion, and premium designs, aligning with evolving consumer preferences, capturing the natural stone substitution market, and addressing demand for façade, architectural, and high-end residential solutions.

Expansion into Bathware, Adhesives, and Adjacencies

The company leverages its Morbi manufacturing base and retail network to grow bathware and adhesives, centralizing operations for efficiency, maintaining quality, and addressing complementary product demand, strengthening its position in the home-building and renovation markets.

Inorganic Growth and Strategic Acquisitions

Varmora targets brownfield acquisitions and consolidation of smaller players, enhancing market share, distribution, manufacturing capacity, and product portfolio, focusing on brands with strong recognition and complementary segments, particularly in southern and eastern India.

ESG and Sustainable Practices

The company emphasizes sustainability through water, energy, and emissions reduction, renewable energy integration, ESG initiatives, and community engagement, embedding environmentally responsible practices in operations and ensuring long-term operational and social sustainability.