Synopsis: Govt allocates LPG up to 70% pre-March levels for ceramics amid shortages, boosting Kajaria (+5% to Rs 1,059) and Somany (+3%). Morbi units stabilize; margins improve. Will tile majors gain market share?
India’s ceramic sector received a major boost on Tuesday. The government announced a structured LPG allocation for energy-intensive industries. Ceramic giants Kajaria and Somany led the charge on Dalal Street.
Kajaria Ceramics shares jumped nearly 5%, closing at Rs 1,058.95 on April 8. Somany Ceramics gained around 3% on the same day. Investors welcomed the announcement as a strong signal of government support.
The Ministry of Petroleum and Natural Gas issued fresh directions on April 8. Industrial units in ceramics, pharma, glass, foundry, and other sectors will now receive structured LPG supply. Each unit gets up to 70% of its pre-March 2026 consumption levels.
However, the total supply remains capped at 0.2 thousand metric tonnes per day. Secretary Neeraj Mittal issued the communication to state governments. Priority goes to units where piped natural gas cannot substitute LPG in manufacturing.
Middle East tensions have disrupted global LPG supply chains since early 2026. India’s ceramic hub in Morbi, Gujarat, faced acute shortages in mid-March. Over 430 units temporarily shut down due to fuel scarcity.
The Rs 53,000-crore industry projected revenue losses of 1–2%. Unorganised players bore the heaviest burden. Organized companies like Kajaria and Somany faced cost pressures but stayed relatively resilient.
Both companies use LPG in high-temperature kilns to fire tiles. The assured allocation brings cost certainty at a critical time. Analysts see this as a positive catalyst for near-term margins.
Fuel costs typically account for 12–16% of total expenses for these firms. Stable LPG supply also helps them maintain higher production utilisation. Furthermore, as unorganised competitors struggle, Kajaria and Somany may gain market share.
Kajaria holds an annual tile capacity of around 90.5 million square metres. Somany operates key plants in Haryana and Gujarat. Both are now better positioned ahead of India’s peak construction season.
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