Limited Vendor Fraud at Kajaria Ceramics: CFO Ousted, Impact Small, Hold Rating

Kajaria Ceramics recently disclosed a small‑scale fraud in its bathware subsidiary, but says the damage is limited.

Fraud Details and Management Response

During a routine digital vendor onboarding check, the company identified a vendor‑related fraud at Kerovit Global Private Limited, a wholly owned step‑down subsidiary. The fraud was carried out by Mr. Dilip Kumar Maliwal, the CFO of Kajaria Bathware Private Limited, who siphoned off company funds.

Management has taken immediate steps: the CFO was terminated, police complaints have been filed, and a forensic review may be launched. The company is also working on recovering the misappropriated amount.

Financial Impact and Recovery

The loss is being recorded as an exceptional item of about Rs 200 million in the FY26 accounts. The firm says the incident is isolated and the overall financial impact remains limited. A partial recovery of the funds has already begun.

Analyst Outlook and Target Price

Prabhudas Lilladher raised its FY27 earnings estimate by 1.3% but lowered FY28 earnings by 2%. The target price was cut to Rs 1,083 from Rs 1,288, and the rating stays at “Hold.” The firm assumes a 5% compound annual growth in tile volume from FY25‑28, an EBITDA margin of 17% in FY28, and revenue/EBITDA/PAT growth rates of 6.8%/15.3%/20.7% over the same period.

Key takeaways:

• Limited fraud involving the bathware CFO, Rs 200 mn loss.
• Executive dismissed, police involved, recovery underway.
• Impact on earnings is modest; analysts keep a Hold rating.
• Target price revised to Rs 1,083.

Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.