Varmora Granito
FinMinutes Deep Business Model & Edge
Varmora Granito Limited is an established Indian tile and bathware manufacturer specializing in Glazed Vitrified Tiles (GVT), Polished Vitrified Tiles (PVT), ceramic tiles, bathware, and adhesives. Operating eight manufacturing facilities in Morbi, Gujarat, the company serves domestic B2C and B2B markets across 988 cities while exporting to over 100 countries.
What this company actually does — full breakdown ▾
Varmora Granito Limited is a leading Indian manufacturer and marketer of building materials, operating across tiles, bathware, sanitaryware, and adhesive solutions. Its product portfolio comprises over 3,500 tile SKUs across 20 distinct surface finishes, featuring Glazed Vitrified Tiles (GVT) and technical products—including Integrated Stone Technology (IST) surfaces launched in Fiscal 2026—alongside Polished Vitrified Tiles (PVT), ceramic tiles, faucets, sanitaryware, and tile adhesives. Scale encompasses eight strategically located manufacturing facilities in Morbi, Gujarat, generating an aggregate installed tile capacity of 43.80 million square meters as of March 31, 2026, supplemented by 304 third-party contract manufacturers for low-complexity lines. In Fiscal 2026, in-house manufacturing accounted for 81.72% of total revenue from operations. The company distributes products through a multi-channel network comprising a domestic B2C retail footprint of 305 Exclusive Brand Outlets (EBOs) and 2,758 Multi-Brand Outlets (MBOs) across 988 cities in 24 states, paired with direct B2B supply to real estate developers, contractors, and government agencies. Geographically, domestic markets accounted for 78.35% of Fiscal 2026 revenue from operations (led by Tier II cities at 56.96%), while exports across more than 100 countries contributed 20.97%. Supply chain operations rely on raw material procurement of clay, feldspar, silica, quartz, glazes, and natural gas/propane energy inputs, with the top 10 suppliers accounting for 8.10% of total expenses in Fiscal 2026.
- GVT and Technical Products — Glazed Vitrified Tiles and advanced technical surface solutions including Integrated Stone Technology (IST) products.
- Bathware — Sanitaryware fixtures, faucets, showers, and bathroom accessories.
- PVT (Polished Vitrified Tiles) — Non-porous polished vitrified tiles for high-traffic residential and commercial spaces.
- Ceramic Tiles — Traditional clay-fired ceramic wall and floor tiles for residential applications.
- Adhesives & Others — Tile adhesives, joint grouts, broken tile sales, display charges, and export incentives.
Market leadership in high-margin Glazed Vitrified Tiles (GVT) and Integrated Stone Technology (IST) innovation, a pan-India franchisee distribution network of 305 EBOs and 2,758 MBOs across 988 cities, 81.72% in-house manufacturing control in Morbi, Gujarat, and global export footprint spanning 100+ countries.
The Offer
Follow the Money — Use of Proceeds
- Repayment/ pre-payment, in full or in part, of all or certain outstanding borrowings and accrued interest thereon availed by: (a) our Company; and (b) our wholly-owned subsidiaries namely Covertek Ceramica Private Limited and Varmora Sanitarywares Private Limited (formerly, Varmora Sanitarywares LLP), through investment in such Subsidiaries — ₹245.00 cr
- General corporate purposes
Valuation at the Offer Price
The filing does not print a single headline multiple, so this one is ours: the upper band divided by the latest restated earnings per share — the same arithmetic the “Basis for the Offer Price” section performs. It is struck on pre-issue earnings; where the issue creates new shares, the post-issue multiple is computed in the workings below. The peer group is the one the filing itself names. A premium is not the same thing as expensive and a discount is not the same thing as cheap — the peer table and the reasons sit further down this page.
FinMinutes IPO Score — How It's Built
Transparent, deterministic, computed from the filing — not an opinion. Open any component below to see exactly what it measures and what it is worth. Components with no disclosed input are dropped from the weighting entirely rather than held at an invented neutral, because a constant inside a weighted average is not neutral — it quietly drags every score toward the middle. Weighted across 5 live components.
100% of the designed weighting had real data behind it on this issue. A lower coverage figure does not mean a worse company — it means we are standing behind less of the picture, and you should read the findings below rather than the headline number.
How this is measured12%
Whether fresh capital actually enters the business. A predominantly offer-for-sale issue is marked down ONLY when the financials are weak. A profitable, cash-rich company selling down is treated as neutral, not penalised, because it does not need the money.
How this is measured12%
What changed between the draft prospectus and the final one. A period roll-forward or a refreshed industry report is expected and scores neutral. A statutory auditor replaced mid-process, a prior year restated, an offer-for-sale expanded late, new statutory dues disclosed, or a risk factor quietly removed all score against. Where only one of the two documents has been read, this component is dropped from the weighting rather than guessed.
How this is measured32%
Driven by the models battery run on the filing's own restated numbers: the Piotroski fundamental tests (scored out of those we could actually run), the Altman Z-double-prime solvency zone, and the direction of profit across the disclosed period. It is not a single yes/no on last year's profit.
How this is measured10%
The post-issue earnings multiple against the peer median disclosed in the filing. A discount to the median scores well and a premium scores badly. When the filing does not disclose comparable peer multiples, this component is dropped from the weighting rather than held at a made-up neutral.
How this is measured28%
Starts at 100 and loses points for every material finding: 12 for a flagged finding, 4 for a noted one. Two kinds feed it. DERIVED findings are computed from the filed numbers against stated thresholds — operating cash negative while profit is positive, related-party revenue above 15% of total, revenue rising while profit falls, goodwill above 30% of net worth, receivables growing more than 1.3x faster than sales, cash below half of short-term debt. Those are reproducible: the same filing gives the same answer every time, and the rule is printed beside the finding. READ findings come from the forensic sweep of the notes. Contingent liabilities, related-party intensity, customer concentration, litigation, auditor qualifications, statutory dues, promoter funding. Findings that record the ABSENCE of a problem — no litigation pending, an unmodified audit opinion — deduct nothing. This is the component our forensic read drives directly, and it moves most between companies.
3-Year Financial & Growth Trend
| Metric | FY26 | FY25 | FY24 |
|---|---|---|---|
| Revenue (₹ Cr) | 1512.46 | 1446.03 | 1435.48 |
| Net Profit (₹ Cr) | 55.09 | 30.77 | 44.94 |
| PAT Margin | 3.64% | 2.13% | 3.13% |
Revenue Breakdown
- GVT and Technical Products: 73.98%
- Bathware: 9.18%
- PVT (Polished Vitrified Tiles): 8.52%
- Ceramic Tiles: 5.37%
- Adhesive: 1.5%
- Others (Scrap, Display & Export Incentives): 1.45%
Market Context
NOT part of the FinMinutes ScoreThe Score above is what the filing says. Everything in this box is what the crowd says. We keep them apart on purpose — every other site blends the two and calls the result a rating. Demand is real information, but it is information about the market, not about the company, and it changes by the hour while the company does not.
Our read of the filing is solid, but demand is thin so far. Books fill late — most retail and institutional bids land in the final hours — so this may simply be the clock. Or the market may know something the filing does not say.
Subscription is low early in a book and high at the end, because most bids arrive in the final hours. A number read on day one says more about the clock than the company — which is precisely why it is not in the Score. GMP is unofficial, unregulated, and easily moved. Neither is a recommendation.
Why the numbers moved, in management’s own words
Taken from the Management’s Discussion and Analysis section of the filing. A number tells you what happened; this is the company’s explanation of why, and whether it calls the cause temporary or structural.
| Metric | Move | Management's stated reason | Type |
|---|---|---|---|
| Revenue from Operations (FY26 vs FY25) | ↑ 4.6% | Revenue from operations grew due to an increase in overall tile sales volume, led by higher demand for premium Glazed Vitrified Tiles (GVT) and technical products. | Structural |
| Cost of Materials Consumed (FY26 vs FY25) | ↓ 5.5% | Cost of materials consumed fell due to lower overall tile production volumes during Fiscal 2026. | Cyclical |
| Purchases of Stock-in-Trade (FY26 vs FY25) | ↓ 7.6% | Purchases from contract manufacturers dropped as in-house manufacturing of high-margin GVT and technical products expanded, replacing outsourced PVT and ceramic volumes. | Structural |
| Profit After Tax (FY26 vs FY25) | ↑ 79.0% | Net profit expanded significantly due to a higher revenue contribution from premium GVT and technical products, combined with reduced depreciation and finance costs. | Structural |
| Operating Cash Flow (FY26 vs FY25) | ↑ 270.3% | Operating cash flows increased substantially driven by higher operating profitability and cash release from inventory liquidation. | Structural |
| Total Borrowings (FY26 vs FY25) | ↓ 29.1% | Total borrowings declined due to scheduled repayment of term loans and working capital credit facilities from internal cash generation. | Structural |
| Cost of Materials Consumed (FY25 vs FY24) | ↑ 31.1% | Material costs rose significantly as production shifted in-house following full-year operations at newly commissioned Unit 2 and Unit 3 manufacturing facilities. | Structural |
| Purchases of Stock-in-Trade (FY25 vs FY24) | ↓ 36.4% | Purchases from contract manufacturers dropped as new in-house manufacturing capacity at Unit 2 and Unit 3 replaced outsourced product volumes. | Structural |
| Finance Costs (FY25 vs FY24) | ↑ 46.2% | Finance costs increased due to full-year interest charges on bank term loans drawn to set up Unit 2 and Unit 3 manufacturing facilities. | Structural |
| Depreciation and Amortisation Expense (FY25 vs FY24) | ↑ 93.8% | Depreciation nearly doubled following the capitalization and full-year operation of property, plant, and equipment at Unit 2 and Unit 3. | Structural |
| Profit After Tax (FY25 vs FY24) | ↓ 31.5% | Net profit fell due to higher fixed factory overheads, depreciation, and interest expenses from newly commissioned facilities before full commercial yields were realized. | Cyclical |
| Inventories (FY25 vs FY24) | ↑ 50.3% | Inventories expanded to support new product SKU launches and full-year commercial operations across Unit 2 and Unit 3 manufacturing plants. | Structural |
Headwinds
- Manufacturing Concentration in Morbi, Gujarat company persistent
All eight manufacturing facilities and 304 contract manufacturers are located in Morbi, Gujarat, exposing business operations to regional disruptions, natural disasters, or local supply chain halts. - Raw Material and Fuel Price Volatility sector persistent
Volatility in the pricing and supply of key inputs, particularly natural gas, propane, clay, and glazes, directly impacts production costs and operating margins. - Middle East Conflict and Export Vessel Disruptions macro temporary
Geopolitical conflict involving Israel, Iran, and the US in early 2026 disrupted export sales due to shipping vessel non-availability and freight rate inflation.
Tailwinds
- Accelerating Demand for Glazed Vitrified Tiles (GVT) & Technical Products sector
GVT is the fastest-growing tile sub-segment in India (14.5% CAGR), commanding 15-30% higher realizations and superior gross margins relative to ceramic tiles. - Real Estate Construction Outlays and Low Per-Capita Tile Consumption macro
Government housing schemes, smart city projects, and low Indian per-capita tile consumption (0.8 sq.m vs 1.4 sq.m global average) drive long-term structural market expansion. - Industry Consolidation Toward Organized Branded Manufacturers sector
Organized tile players are increasing market share from 47% in FY26 to 56% by FY30 due to strong franchisee retail networks and superior in-house manufacturing quality control.
| Facility | Period | Utilisation |
|---|---|---|
| Total Tiles Manufacturing Facilities (Consolidated) | FY26 | 72.5% |
| Varmora – Unit 3 (Tile Facility) | FY26 | 86.7% |
| Covertek Ceramica Private Limited (Tile Subsidiary) | FY26 | 87.5% |
| Varmora – Unit 2 (IST / Engineered Stone) | FY26 | 58.6% |
| Varmora – Unit Conffi Sanitarywares (Sanitaryware Facility) | FY26 | 66.6% |
Issue Timeline
Dates as carried by the exchange feed. Allotment, refund and credit dates move more often than the open and close dates do.
- Refunds initiated2026-09-28
- Pre Application Start2026-09-21
- Bidding Start2026-09-22
- Bidding End2026-09-24
- Allotment Process Start2026-09-25
- Allotment Finalization2026-09-28
- Listing Day2026-09-29
- Mandate End2026-11-05
Applying, and Who Handles the Allotment
Check allotment status on the registrar’s own portal → We link the registrar directly rather than mirroring the form.
Deep Financials
Revenue, EBITDA and profit are what every listing site prints. Below are the full restated statements as disclosed, the ratios we compute from them, and a DuPont decomposition of the return on equity. A prospectus carries three years, not ten — that is the document’s ceiling, and within it we go as deep as it allows.
Income StatementThe profit and loss as filed, then what we derive from it — kept apart.
Statutory order, exactly as restated in the filing. Finance cost and depreciation sit inside Total Expenses under Ind AS, which is why they are listed among the expense lines here rather than below the total. The expense rows sum to the total. Rows the filing does not disclose separately are omitted rather than left blank.
| Income Statement — as filed (₹ Cr) | FY26 | FY25 | FY24 |
|---|---|---|---|
| Revenue from Operations | 1,512.46 | 1,446.03 | 1,435.48 |
| Other Income | 50.06 | 46.65 | 37.10 |
| Total Income | 1,562.53 | 1,492.68 | 1,472.58 |
| Cost of Materials Consumed | 383.79 | 406.06 | 309.74 |
| Purchases of Stock-in-Trade | 213.15 | 230.70 | 362.85 |
| Changes in Inventories | 44.12 | -90.60 | -3.66 |
| Employee Benefit Expense | 111.76 | 109.12 | 97.51 |
| Finance Cost | 39.40 | 42.49 | 29.06 |
| Depreciation & Amortisation | 105.99 | 119.41 | 61.61 |
| Other Expenses | 588.15 | 639.11 | 555.83 |
| Total Expenses | 1,486.36 | 1,456.28 | 1,412.92 |
| Profit Before Exceptional Items and Tax | 76.17 | 36.39 | 59.66 |
| Exceptional Items | -0.77 | 0.00 | 0.00 |
| Share of Profit of Associates / JV | 1.23 | 1.26 | 3.37 |
| Profit Before Tax | 76.62 | 37.65 | 63.04 |
| Tax Expense | 21.53 | 6.88 | 18.10 |
| Profit After Tax | 55.09 | 30.77 | 44.94 |
| Other Comprehensive Income | 0.33 | 0.21 | 0.61 |
| Total Comprehensive Income | 55.42 | 30.99 | 45.54 |
| EPS - Basic | 3.08 | 1.75 | 2.19 |
| EPS - Diluted | 3.05 | 1.74 | 2.19 |
Balance SheetWhat the company owns, owes, and is worth on paper.
| Balance Sheet (₹ Cr) | FY26 | FY25 | FY24 |
|---|---|---|---|
| Share Capital | 40.33 | 40.33 | 39.97 |
| Reserves & Surplus | 765.70 | 691.72 | 647.77 |
| Net Worth | 806.03 | 732.05 | 687.74 |
| Long-term Borrowings | 171.37 | 221.27 | 262.36 |
| Short-term Borrowings | 186.58 | 283.88 | 150.53 |
| Total Borrowings | 357.95 | 505.16 | 412.89 |
| Trade Payables | 220.51 | 209.89 | 193.29 |
| Current Liabilities | 476.68 | 556.02 | 426.08 |
| Total Liabilities | 699.66 | 846.61 | 772.80 |
| Property, Plant & Equipment | 560.89 | 645.76 | 687.77 |
| Capital Work in Progress | 27.48 | 10.19 | 2.73 |
| Intangible Assets | 6.99 | 11.66 | 15.67 |
| Investments | 52.88 | 33.52 | 32.17 |
| Inventories | 248.33 | 285.95 | 190.29 |
| Trade Receivables | 382.67 | 382.22 | 332.92 |
| Cash & Equivalents | 81.91 | 82.10 | 92.22 |
| Current Assets | 796.68 | 828.87 | 667.67 |
| Total Assets | 1,509.87 | 1,589.80 | 1,476.16 |
Cash FlowWhere the cash actually went. Often the most honest statement of the three.
| Cash Flow (₹ Cr) | FY26 | FY25 | FY24 |
|---|---|---|---|
| Net Cash from Operating Activities | 234.07 | 63.21 | 88.29 |
| Capital Expenditure | 33.76 | 111.67 | 348.30 |
| Net Cash from Investing Activities | -45.97 | -119.95 | -336.56 |
| Net Cash from Financing Activities | -188.30 | 46.62 | 115.06 |
| Net Change in Cash | -0.19 | -10.11 | -133.21 |
Ratio AnalysisProfitability, leverage, liquidity, efficiency and earnings quality — computed by us.
Every ratio below is computed by us from the line items the company disclosed — not copied from anywhere. The arithmetic is standard; the point is that somebody actually did it. Blank cells mean the filing did not disclose the inputs, and we would rather show a gap than invent a number.
| Ratio | FY26 | FY25 | FY24 |
|---|---|---|---|
| Profitability | |||
| EBITDA Margin (%) | 14.2 | 13.3 | 10.2 |
| EBIT Margin (%) | 7.4 | 5.3 | 6 |
| PAT Margin (%) | 3.6 | 2.1 | 3.1 |
| Return on Equity (%) | 6.8 | 4.2 | 6.5 |
| Return on Capital Employed (%) | 9.9 | 6.4 | 8.1 |
| Return on Assets (%) | 3.6 | 1.9 | 3 |
| Leverage | |||
| Debt / Equity (x) | 0.44 | 0.69 | 0.6 |
| Net Debt / EBITDA (x) | 1.25 | 2.13 | 2.13 |
| Interest Coverage (x) | 2.93 | 1.86 | 3.05 |
| Liquidity | |||
| Current Ratio (x) | 1.67 | 1.49 | 1.57 |
| Quick Ratio (x) | 1.15 | 0.98 | 1.12 |
| Efficiency | |||
| Asset Turnover (x) | 1 | 0.91 | 0.97 |
| Receivable Days | 92 | 96 | 85 |
| Inventory Days | 60 | 72 | 48 |
| Payable Days | 53 | 53 | 49 |
| Cash Conversion Cycle (days) | 99 | 115 | 84 |
| Quality of Earnings | |||
| Operating Cash Flow / PAT (x) | 4.25 | 2.05 | 1.96 |
| Accruals Ratio (%) | -11.9 | -2 | -2.9 |
| Capex / Depreciation (x) | 0.32 | 0.94 | 5.65 |
DuPont DecompositionWhy the return on equity is what it is: margin, efficiency, or leverage.
A headline return on equity tells you what. The DuPont decomposition tells you why — whether the return is earned through margin, through asset efficiency, or simply through leverage. Two companies can post an identical ROE for opposite reasons, and only one of them is safe.
| Component | FY26 | FY25 | FY24 |
|---|---|---|---|
| Net Margin (PAT / Revenue) | 3.6% | 2.1% | 3.1% |
| Asset Turnover (Revenue / Assets) | 1x | 0.91x | 0.97x |
| Equity Multiplier (Assets / Net Worth) | 1.87x | 2.17x | 2.15x |
| = Return on Equity | 6.8% | 4.2% | 6.5% |
| Tax Burden (PAT / PBT) | 0.72x | 0.82x | 0.71x |
| Interest Burden (PBT / EBIT) | 0.66x | 0.48x | 0.71x |
| Operating Margin (EBIT / Revenue) | 7.6% | 5.5% | 6.2% |
Computed from the disclosed statements. Where the filing omits an input, the row is left blank rather than estimated.
Quality of EarningsWhat the statements say when you read them against each other.
What the statements say once you read them against each other. These are observations, not verdicts — every one is arithmetic on the numbers the company itself disclosed, and each is stated so you can go and check it in the filing.
- Operating cash flow was 4.25x reported profit in FY26. Earnings are converting into cash, which is what you want to see and frequently is not the case.
Forensic ModelsBeneish, Altman and Piotroski — plus our own final-year check.
Beneish M-Score
M = -2.84An eight-variable model built to detect earnings manipulation, and built to run on exactly two consecutive years — which is what a prospectus gives us. It belongs here more than anywhere: a company about to list has the maximum possible incentive to have dressed up the very years it is about to show you. A score above −1.78 is the threshold at which the model says the accounts merit a closer look. It is a screening signal, not an accusation, and it was calibrated on listed companies elsewhere. Read the eight components, not just the total.
| Component | Value | What it captures |
|---|---|---|
| DSRI Days Sales in Receivables Index (Receivables_t / Sales_t) / (Receivables_t-1 / Sales_t-1) | 0.957 | Above 1 means receivables grew faster than sales. Revenue may be being recognised ahead of collection. |
| GMI Gross Margin Index GrossMargin_t-1 / GrossMargin_t | 0.964 | Above 1 means margins deteriorated. A firm with worsening prospects has more incentive to manipulate. |
| AQI Asset Quality Index AQ_t / AQ_t-1, where AQ = 1 - (CurrentAssets + PPE) / TotalAssets | 1.392 | Above 1 means a rising share of assets is soft (neither current nor fixed) — capitalised costs can hide here. |
| SGI Sales Growth Index Sales_t / Sales_t-1 | 1.046 | Growth is not manipulation. But high-growth firms face more pressure to keep the streak going. |
| DEPI Depreciation Index DepRate_t-1 / DepRate_t, where DepRate = Dep / (Dep + PPE) | 0.982 | Above 1 means assets are being depreciated more slowly — a quiet way to lift reported profit. |
| SGAI SG&A Index (SGA_t / Sales_t) / (SGA_t-1 / Sales_t-1), SGA proxied as employee cost + other expenses | 0.894 | A proxy, because filings rarely break out SG&A cleanly. Read it as a direction, not a precise figure. |
| LVGI Leverage Index Leverage_t / Leverage_t-1, where Leverage = (CurrentLiab + LongTermDebt) / TotalAssets | 0.878 | Above 1 means leverage rose. Debt covenants create pressure to hit numbers. |
| TATA Total Accruals to Total Assets (PAT - CashFromOperations) / TotalAssets | -0.1185 | The gap between reported profit and cash generated. The single heaviest term in the model — and the one that catches profit that never became cash. |
M = -2.84, below the −1.78 threshold. The model does not flag these accounts.
Altman Z″-Score (emerging markets)
Z″ = 8.02 · SafeA distress-prediction model. We use the Z″ variant deliberately: the original Z was calibrated on American manufacturers and misleads badly on Indian services companies. Above 2.6 is the safe zone, 1.1 to 2.6 is grey, below 1.1 is the distress zone. Like every model of its kind it is a screen, not a prophecy.
| X1 — Working Capital / Total Assets | 0.212 |
| X2 — Retained Earnings / Total Assets | 0.507 |
| X3 — EBIT / Total Assets | 0.077 |
| X4 — Net Worth / Total Liabilities | 1.152 |
| Z″ = 3.25 + 6.56·X1 + 3.26·X2 + 6.72·X3 + 1.05·X4 | 8.02 |
Piotroski F-Score (adapted)
8 / 8Nine yes-or-no tests of fundamental strength — except we run eight. One of the original nine asks whether the company issued new shares, which is plainly absurd to ask of a company whose entire purpose at this moment is to issue shares. We drop that test, and we would rather tell you that than quietly fudge it.
- ✓Positive return on assets
- ✓Positive operating cash flow
- ✓Return on assets improving
- ✓Cash flow exceeds profit (quality of earnings)
- ✓Long-term leverage decreasing
- ✓Current ratio improving
- ✓Gross margin improving
- ✓Asset turnover improving
Ratios Nobody Prints
- Contingent liabilities / Net worth: 1.4%
Contingent liabilities of 11.48 cr against a net worth of 806.03 cr — 1.4% of what the company is worth on paper. These are obligations that sit off the balance sheet but could land on it. What they consist of matters as much as the size: a corporate guarantee to a subsidiary is a different animal from a disputed tax demand, and the filing says which. - Related-party revenue / Total revenue: 0.1%
0.1% of revenue in FY26 came from entities connected to the promoters. Revenue you sell to yourself is not the same as revenue you won in the market. - Cash / Short-term borrowings: 0.44x
Short-term borrowings of 186.58 cr against cash of 81.91 cr. Debt that must be refinanced within a year is only comfortable while lenders stay comfortable. - Promoter remuneration / PAT: 1.9%
Managerial remuneration to the promoter group was 1.06 cr against a profit of 55.09 cr. This is a legitimate cost — but it is also a route by which value leaves a company before it ever reaches a minority shareholder.
The Formula NotebookEvery number above, with the working shown. Check us.
Every number we publish, with the working shown. The formula, the same formula with this company’s actual figures put into it, the answer, and what it is for. Check us. That is the point.
PAT ÷ Net Worth55.09 ÷ 806.03What the company earned on the money shareholders have in it. The headline measure of return — and the one the DuPont section takes apart.
EBIT ÷ (Net Worth + Total Borrowings)115.56 ÷ (806.03 + 357.95) = 115.56 ÷ 1,163.98Return on ALL the capital in the business, borrowed as well as owned. Unlike ROE, it cannot be flattered by taking on debt.
EBITDA ÷ Revenue221.55 ÷ 1,512.46Operating profitability before the effects of debt, tax and depreciation. What the business earns from the act of trading.
Total Borrowings ÷ Net Worth357.95 ÷ 806.03How much the company has borrowed against what it owns. High is not automatically bad — ask whether the borrowing is being serviced comfortably.
EBIT ÷ Finance Cost115.56 ÷ 39.40How many times over operating profit covers the interest bill. Below about 2x, a meaningful share of what the business earns is going to lenders rather than owners.
(Trade Receivables ÷ Revenue) × 365(382.67 ÷ 1,512.46) × 365How long the company waits to be paid. Rising receivable days mean revenue is being booked faster than it is collected — which is where a great many accounting problems begin.
Inventory Days + Receivable Days − Payable Days60 + 92 − 53How long cash is tied up in the operating cycle before it comes back. The longer it is, the more working capital the business must fund.
Cash from Operations ÷ PAT234.07 ÷ 55.09Did the profit turn into cash? Profit is an opinion; cash is a fact. When this sits well below 1x for long, the two are drifting apart, and the filing is where you find out why.
(PAT − Cash from Operations) ÷ Total Assets(55.09 − 234.07) ÷ 1,509.87 = -178.98 ÷ 1,509.87The share of reported profit that exists on paper rather than in the bank. It is also the heaviest single term in the Beneish model, for good reason.
Price × Post-issue Shares₹148.00 × 180,622,951 sharesWhat the whole company is being valued at, if the issue prices at the top of the band.
Market Cap + Total Borrowings − Cash2,673.22 + 357.95 − 81.91What it would actually cost to buy the whole business: you take on its debt and you get its cash. This is the number a buyer cares about, and it is the reason a P/E on its own can mislead.
Enterprise Value ÷ EBITDA2,949.26 ÷ 221.55The multiple that includes debt. Two companies on the same P/E — one debt-free, one heavily borrowed — are not the same investment, and only this number tells you so.
Market Cap ÷ PAT2,673.22 ÷ 55.09The familiar multiple. Useful, but blind to debt — read it alongside EV/EBITDA, never instead of it.
Market Cap ÷ (PAT − exceptional items, tax-effected)2,673.22 ÷ (55.09 − -0.77 at 28.1% tax)The latest year carries an exceptional item of ₹-0.77 cr, which depressed reported profit. Both multiples are shown because both are true: one is what the year printed, the other is what the business did. Which one belongs in your judgement is your call, not ours.
Offer price ÷ weighted average cost of acquisition₹148.00 ÷ ₹151.78Every offer document must disclose the weighted average cost of acquisition for shares issued or transferred over the preceding one, eighteen and thirty-six months. Early capital takes real risk and a large multiple built over years is ordinary. A steep step-up inside a short window is the one that deserves a second look. What it means is yours to decide; the arithmetic is the filing’s own.
Growth needed to reach the peer multiple on earnings alone48.52x against a peer median of 40.27xThis is not a forecast and not a target. It is the price restated as a question: at this multiple, with the price unchanged, earnings would have to compound at this rate to arrive at what the filing’s own peer group trades on. Whether the business can do that is the argument — we are only stating what the argument is about.
EBIT × (1 − tax rate) ÷ (Net Worth + Debt − Cash)NOPAT ÷ Invested CapitalWhat the business earns on the capital actually at work in it. We do not compare this to a cost of capital: that would need a beta, an unlisted company has none, and inventing one would be theatre.
P/E ÷ trailing PAT growth (%)48.52 ÷ 79%PEG was designed for FORWARD growth. This one uses TRAILING growth, because that is all a prospectus gives us — and the final year before an IPO is very often the best year the company will have for a while. A low PEG here may say more about the timing of the filing than about the price. We show it because it was asked for; we show the growth denominator beside it so it cannot mislead you quietly.
Workspace
The post-issue share count is stated as “[•]” in this filing until final pricing, so we derive it: profit after tax divided by earnings per share gives the pre-issue count, and the fresh issue divided by the offer price gives the new shares. Everything below rests on that derivation. It is close, not exact.
The numbers are already loaded. Move the offer price and watch every multiple move with it. Set your own growth and margin and see what they imply two years out. These are your assumptions, not our forecast — we have no view on what this company will earn, and the moment we published one we would be doing something we are not registered to do. What we can do is put the arithmetic in front of you and get out of the way.
Price defaults to the top of the band. Margin defaults to what the company actually reported in FY26.
Projections are arithmetic on the inputs you typed. They are not a forecast, not a recommendation, and not a view on whether this offer is worth taking. Educational only.
Institutional Alpha: DRHP Deep Dive
According to the Technopak Report, the Indian domestic tiles market was valued at ₹ 53,100 crore in Fiscal 2025 and is projected to grow to ₹ 76,520 crore by Fiscal 2030 at a CAGR of 8.4% from Fiscal 2026. Growth is driven by rapid real estate construction, government housing programs, rising disposable incomes, and low per-capita tile consumption in India (0.8 sq.m vs global average of 1.4 sq.m). Within the tile sector, premiumisation is accelerating, with Glazed Vitrified Tiles (GVT) expanding from 36.5% of market revenue in Fiscal 2026 to 45.5% by Fiscal 2030 (CAGR of 14.5%). As a top-four tile player in India with 84.19% of tile revenues generated from GVT and technical products, Varmora Granito Limited is positioned to capture market consolidation as organized players expand from 47% share in Fiscal 2026 to 56% by Fiscal 2030.
Strategic Mix Shift Toward In-House High-Margin GVT Production
Varmora Granito has systematically shifted its revenue model toward in-house manufacturing of Glazed Vitrified Tiles (GVT) and technical stone products (IST), increasing in-house tile revenue share to 81.72% in FY26 (up from 66.83% in FY24). Sourcing from contract manufacturers dropped from ₹ 462.04 crore in FY24 to ₹ 266.17 crore in FY26, expanding gross margins to 37.9% and EBITDA margins to 14.18%.
Source: p.20, p.140De-leveraging via Primary IPO Proceeds
The company is utilizing ₹ 245.00 crore of Fresh Issue proceeds to prepay bank borrowings across the parent and subsidiaries (Covertek Ceramica and Varmora Sanitarywares). This deleveraging will reduce total outstanding borrowings (₹ 357.95 crore as of March 31, 2026), saving significant annual interest expense (₹ 39.40 crore in FY26) and improving interest coverage.
Source: p.63, p.123Omnichannel EBO Network & Hybrid AR Technology Integration
Varmora differentiates itself from unorganized regional producers by deploying a 3,063-dealer network supported by 305 EBOs across 249 cities and the 'Hybrid Varmora' augmented reality application. The digital platform allows dealers to showcase 5,338 SKUs in 3D layouts, mitigating physical showroom space constraints and driving higher B2C retail conversion.
Source: p.140, p.214Shareholding, Syndicate & Leadership
Leadership & Skin in the Game
Leadership: Bhavesh Vallabhdas Varmora
Litigation: Direct tax proceedings against Company (₹ 0.16 crore across 2 cases); Indirect tax proceedings against Company (₹ 8.10 crore across 17 cases); NGT/GPCB coal gasifier interim compensation demand (₹ 1.84 crore); Criminal complaint against Company, Managing Director Bhavesh Varmora and employees under IPC 420/464/467/468/469/470/471 by Vikraman P.
Auditor / RPT Flags: None; unmodified audit examination opinion on Restated Consolidated Financial Information, though CARO noted minor differences between quarterly bank returns and books of accounts.
Peers & Valuation
| Company | P/E | P/B | RoE | Margin |
|---|---|---|---|---|
| Kajaria Ceramics Limited | 40.27 | — | 15.89 | 9.97 |
| Somany Ceramics Limited | 28.55 | — | 8.79 | 1.84 |
| Asian Granito India Limited | 72 | — | 1.23 | 0.16 |
| Orient Bell Limited | — | — | 3.9 | 1.79 |
At the ₹148 upper band, the issue is priced at 48.5x earnings — a 20% premium to the peer median of 40.3x. This is the arithmetic of the price band against the peers the filing itself lists; it is not a view on whether the offer is worth taking.
Plant Vitals
The operating metrics that actually price this business — the ones a generic IPO page skips. Straight from the filing.
| Metric | Value | Detail |
|---|---|---|
| Installed capacity | 43.80 million sq. meters | aggregate installed tile capacity in FY26 across 8 manufacturing facilities |
| Capacity utilisation | 72.49% | overall FY26 capacity utilisation across tile manufacturing facilities |
| Order book / book-to-bill | — | order book not disclosed in filing |
| Customer concentration | — | no single customer contributes more than 5% of revenue from operations |
| Value addition / Gross margin | 37.90% | FY26 gross profit margin (EBITDA margin 14.18%) |
Source: p.19, p.38, p.140 — Business / MD&A
🔍 Forensic Findings — What the Footnotes Say
Findings from across the filing — the notes, MD&A, related-party disclosures, contingent liabilities, CARO and litigation, alongside the risk section itself. Each carries where it was found, so you can see which were buried and which were disclosed. Findings marked derived are computed from the filed numbers against a stated rule, shown beside them.
All eight manufacturing facilities (aggregate installed capacity of 43.80 million sq. meters) and 304 contract manufacturers are concentrated in Morbi, Gujarat, exposing the business to regional supply disruptions, natural disasters, or local fuel price spikes.
p.20, p.21Associate entities (Fiorenza Granito, Sentosa Granito, Allemby Ceramics) and Joint Ventures (Avalta Granito, Renite Vitrified) are engaged in the manufacturing and selling of tiles and ceramic products, creating potential conflicts of interest.
p.28, p.177As of March 31, 2026, export trade receivables aggregating ₹ 20.87 crore (down from ₹ 27.87 crore in FY25) have been outstanding for more than 9 months beyond the timeline stipulated by the Reserve Bank of India under FEMA.
p.139National Green Tribunal (NGT) and Gujarat Pollution Control Board (GPCB) issued demand notices for interim environmental compensation of ₹ 1.84 crore regarding historical coal gasifier usage, currently challenged before the High Court of Gujarat.
p.29, p.158Out of ₹ 320.00 crore Fresh Issue proceeds, ₹ 245.00 crore (76.56%) is allocated for repayment/prepayment of debt availed by the Company and wholly-owned subsidiaries (Covertek Ceramica and Varmora Sanitarywares) from lenders including SBI.
p.123, p.124Direct tax proceedings against Company (₹ 0.16 crore across 2 cases); Indirect tax proceedings against Company (₹ 8.10 crore across 17 cases); NGT/GPCB coal gasifier interim compensation demand (₹ 1.84 crore); Criminal complaint against Company, Managing Director Bhavesh Varmora and employees under IPC 420/464/467/468/469/470/471 by Vikraman P.
p.5, p.102, p.106, p.147None; unmodified audit examination opinion on Restated Consolidated Financial Information, though CARO noted minor differences between quarterly bank returns and books of accounts.
p.5, p.102, p.106, p.147Short-term borrowings of ₹186.58 cr against cash of ₹81.91 cr. Debt that must be refinanced within a year is comfortable only while lenders stay comfortable.
rule: cash < 0.5x short-term debtCompany's Claims vs Reality
We stress-test each claim against the filing's own data.
Technopak Report confirms FY26 revenue of ₹ 1,512.46 crore, placing Varmora among the top four listed peers behind Kajaria Ceramics (₹ 4,830.36 crore), Somany Ceramics (₹ 2,789.84 crore), and Asian Granito (₹ 1,858.06 crore).
p.140, p.187GVT and technical products accounted for 73.98% of overall revenue from operations (84.19% of tiles segment revenue) in FY26, the highest GVT share among selected listed peers according to Technopak.
p.19, p.187Filing confirms roll-out of proprietary AR platform across 305 EBOs and 2,758 MBOs, enabling full SKU display in 3D layouts, supporting higher conversion rates as verified by Technopak dealer surveys.
p.196, p.214Proprietary SWOT — Company-Specific
Strengths
- Integrated manufacturing infrastructure with eight facilities in Morbi, Gujarat, commanding 43.80 million sq. meters installed tile capacity.
- Dominant focus on high-realization Glazed Vitrified Tiles (GVT) and innovative Integrated Stone Technology (IST) surfaces.
- Pan-India retail footprint spanning 305 Exclusive Brand Outlets (EBOs) and 2,758 Multi-Brand Outlets (MBOs) across 988 cities.
Weaknesses
- Geographical manufacturing concentration with 100% of plants and third-party contract suppliers located in Morbi, Gujarat.
- Working capital intensity with net working capital cycle of 96 days in FY26.
Opportunities
- Rapid expansion of Indian GVT market, projected to grow at 14.5% CAGR to reach 45.5% of total tile market by Fiscal 2030.
- Increasing market consolidation toward organized branded manufacturers expanding from 47% share in FY26 to 56% by FY30.
Threats (material, not boilerplate)
- Price volatility and supply disruptions in key energy inputs, specifically natural gas and propane. risk_section
Why it matters: Power and fuel costs represent 21.06% of total income in FY26, making operating margins vulnerable to natural gas price spikes. - Geopolitical conflict in Middle East and shipping route disruptions affecting export volumes. risk_section
Why it matters: Exports contributed 20.97% of FY26 revenue from operations; freight inflation or vessel shortages directly impact international margins.
Live Subscription Status
Allotment Status
Check your allotment on the registrar's portal → Registrar: KFin Technologies
Allotment is decided by the registrar, not by us and not by the exchange. In an oversubscribed retail book, allotment is by lottery, so a large application does not improve your odds beyond one lot. If money stays blocked after the refund date, the mandate expiry (05 Nov 2026) is the date to raise with your bank.
Analyst Q&A: Burning Questions
Facts from the filing. No recommendation — that layer arrives once our Research Analyst registration is live.
Why is nearly 77% of net fresh issue proceeds designated for debt prepayment rather than new plant expansion?
Having completed major capital expenditures at Unit 2 and Unit 3 in Fiscals 2024-2025 (expanding tile capacity to 43.80 million sq. meters at 72.49% utilization), prepaying ₹ 245.00 crore of debt optimizes capital structure, slashes finance costs (₹ 39.40 crore in FY26), and boosts return ratios.
p.38, p.63How does management address the risk of having 100% of manufacturing capacity located in Morbi, Gujarat?
While manufacturing is centralized in Morbi to leverage the region's raw material ecosystem, port proximity, and skilled labor, sales risk is widely diversified across 988 cities in 24 Indian states and exports to 100+ countries, with no single customer contributing over 5% of revenue.
p.20, p.27What drove the jump in PAT margin from 2.13% in FY25 to 3.64% in FY26?
Margin expansion was driven by a higher revenue contribution from premium GVT and technical stone products (84.19% of tiles revenue), reduced reliance on outsourced trading purchases, and lower finance and depreciation expenses as newly commissioned plants reached operational maturity.
p.63, p.194What is the status of overdue export receivables and FEMA compliance regarding RBI timelines?
Overdue export trade receivables outstanding beyond 9 months stood at ₹ 20.87 crore as of March 31, 2026 (reduced from ₹ 27.87 crore in FY25). The company has filed extension applications with regulatory authorities and does not expect any material financial penalty.
p.139What Earlier Investors Paid
Early capital takes real risk and is fairly rewarded for it — a large multiple built over many years is normal. What deserves a closer look is a steep step-up in a short window: a round priced cheaply only months before the offer.
| Shareholder | Priced at | When | vs IPO price |
|---|---|---|---|
| Katsura Investments | — | 2023-08-18 | — |
| Katsura Investments | ₹97.81 | 2024-12-16 | 1.5x |
| Allotted below the band — 2 entries | |||
| Katsura Investments | ₹1,467.10 | 2023-03-21 | as disclosed |
| Katsura Investments to Secondary Purchasers | ₹204.59 | 2025-11-20 | as disclosed |
The 2 allotments listed under “allotted below the band” are shown at their as-disclosed per-share price. They are not adjusted for any later bonus issue or share split, so where a company has issued bonus shares the raw multiple understates the true return and can even read as a loss when none was made. We show them as filed and decline to compute a misleading multiple.
Prices are as stated in the filing’s allotment history and are not adjusted for later bonus issues or share splits. Where a company has issued bonus shares, the multiples above understate the true return and can even read as losses. Adjusting for that is on our list; until it is done we would rather show the raw disclosure and tell you its limits than publish a confident number that is wrong.
Lock-in Expiry Calendar
Shares held before the IPO cannot be sold immediately; they unlock in tranches. When a tranche unlocks, more shares become eligible to trade. Retail investors are frequently caught unaware by these dates. The schedule below follows from the listing date; quantities are shown only where the filing discloses them.
- 29 Sep 2029Minimum Promoters' Contribution3 years
- 29 Sep 2027Promoters Excess Shareholding1 year
- 29 Mar 2027Pre-Offer Capital6 months
An unlock means more shares may be sold — not that they will be, and not that the price will move. We state the dates; what you do with them is your call.
What Changed Between the DRHP and the RHP
Companies file a draft prospectus, then a final one. The changes in between are rarely reported, and they can be revealing.
| Item | In the DRHP | In the RHP / Addendum |
|---|---|---|
| Offer for Sale OFS share count reduced by 26,217,634 shares. All three promoter group selling shareholders withdrew their participation, leaving Katsura Investments as the sole selling shareholder. | Up to 52,435,268 Equity Shares (Katsura Investments: 49,156,579; Parsotambhai Jivrajbhai Patel: 1,092,897; Ramanbhai Jivrajbhai Varmora: 1,092,896; Vallabhbhai Jivrajbhai Varmora: 1,092,896) | Up to 26,217,634 Equity Shares (Katsura Investments: 26,217,634; Promoter Group selling shareholders dropped) |
| Use of Proceeds Fresh issue size reduced by ₹ 80.00 crore. Allocation for debt repayment/prepayment reduced from ₹ 300.00 crore in DRHP to ₹ 245.00 crore in RHP. | Fresh Issue up to ₹ 400.00 crore (₹ 300.00 crore debt repayment/prepayment, balance for GCP) | Fresh Issue up to ₹ 320.00 crore (₹ 245.00 crore debt repayment/prepayment, balance for GCP) |
| Reporting Period Restated consolidated financial statements updated in RHP to include full Fiscal 2026 audited performance, dropping Fiscal 2023. | Fiscals 2025, 2024, and 2023 | Fiscals 2026, 2025, and 2024 |
| Restated Financials Financial statements updated to reflect Fiscal 2026 performance, showing revenue growth to ₹ 1,512.46 crore and PAT expansion to ₹ 55.09 crore. | FY25 Revenue from operations of ₹ 1,446.03 crore, PAT of ₹ 30.77 crore, Basic EPS of ₹ 1.75 | FY26 Revenue from operations of ₹ 1,512.46 crore, PAT of ₹ 55.09 crore, Basic EPS of ₹ 3.08 |
| Contingent Liabilities Explicit summary table of contingent liabilities added in RHP introductory section, covering pending tax and environmental proceedings. | Not explicitly reported in introductory summary | ₹ 11.48 crore as of March 31, 2026 |
| Risk Factors Internal risk factors expanded from 48 in DRHP to 55 in RHP, adding disclosures regarding Middle East vessel/shipping disruptions, the divestment of Simola Tiles LLP, and New Labour Codes gratuity provisions. | 48 internal risk factors | 55 internal risk factors |
Educational, grounded entirely in the company's filings (DRHP/RHP). Not investment advice. FinMinutes does not provide buy/sell recommendations.