Varmora Granito makes ceramic and vitrified tiles in Morbi, Gujarat. Its Rs 708 crore IPO closed on 24 September 2026 and listed on 29 September at Rs 155, 4.7% above the Rs 148 issue price, after a subscription of 1.58 times.
The headline figure going into the IPO: profit after tax rose from Rs 30.8 crore in Fiscal 2025 to Rs 55.1 crore in Fiscal 2026, up 79%.
The restated profit and loss statement in the draft offer document (DRHP p.69, figures in Rs million) shows where that profit came from:
- Fiscal 2026: other income Rs 50.1 crore, profit before tax Rs 76.6 crore. About 65% of pre-tax profit, and the equivalent of about 91% of profit after tax, came from other income.
- Fiscal 2025: other income Rs 46.6 crore, profit before tax Rs 37.7 crore. Without other income, pre-tax profit would have been a loss of about Rs 9 crore.
- Fiscal 2024: other income Rs 37.1 crore, profit before tax Rs 63.0 crore.
- Fiscal 2024: other income Rs 37.1 cr, pre-tax profit Rs 63.0 cr59%
- Fiscal 2025: other income Rs 46.6 cr, pre-tax profit Rs 37.7 cr124%
- Fiscal 2026: other income Rs 50.1 cr, pre-tax profit Rs 76.6 cr65%
Other income is money that does not come from the main business: interest, gains on investments, rent, foreign exchange gains, one-off items. Having it is normal. When it is most of the profit, the business itself earns less than the profit line suggests, and the note to the accounts that breaks it down is the page worth reading next, because some of it may not repeat.
Two other things the document prints. The company describes itself as among the "top four" in its market; the largest listed peer it names, Kajaria Ceramics, had about Rs 4,830 crore of revenue, roughly three times Varmora's Rs 1,512 crore (pp.71, 140). And 55 of every 100 rupees raised went to existing shareholders selling, with most of the company's own share going to repay debt.
In its favour: over three years the company brought in Rs 386 crore of cash from operations against Rs 131 crore of reported profit, borrowing is moderate at 0.45 times equity and falls further with the repayment, and its operating margin rose from 10.2% to 14.2% over the period.
The check works on any IPO and takes under a minute. In the restated profit and loss statement, put "other income" next to "profit before tax" for each year. If other income is a large share, or larger than the profit, read the note that explains it before reading anything into profit growth.
Sources: Varmora Granito Limited, draft red herring prospectus, restated statement of profit and loss (p.69), industry and peer comparison (pp.71, 140); listing prices from NSE. Information and data aggregation only. Not investment advice. Not a SEBI-registered research analyst.