A Rs200 million fraud was discovered at Kajaria Ceramics' step‑down subsidiary, Kerovit Global, raising concerns for shareholders.
What happened?
Investigations revealed that about Rs200 million was misappropriated over the last two years. The amount represents roughly 13% of Kerovit's total assets for FY25.
How the company responded
Kajaria took swift action:
- Terminated the subsidiary’s CFO.
- Filed a police complaint.
- Started a review of its IT and internal controls, especially vendor onboarding.
- Strengthened internal checks to prevent future lapses.
Financial impact
The loss will be recorded as an “exceptional loss” in FY26. Recovery of the full amount is still uncertain, but the company does not expect the fraud to change its overall valuation.
Analyst outlook
Emkay Global Financial keeps a BUY recommendation on Kajaria Ceramics, with a target price of Rs1,550. The firm expects earnings to stay on track for FY27‑28.
Bottom line for investors
While the fraud is serious, Kajaria’s quick response and tighter controls aim to protect shareholders. The stock’s fundamentals remain unchanged, according to the analyst.
Remember, this is our view, not a prediction. Do your own research before making any investment decisions.