tiles industry

8/10/2019 Tiles Industry

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IIISEMESTER MBA

INDUSTRY ANALYSIS REPORT

ON

CERAMIC TILES INDUSTRY

Submitted to

DEPARTMENT OF BUSINESS ADMINISTRATION

ANNAMACHARYA P.G COLLEGE OF COMPUTER STUDIES

(Affiliated to J.N.T.University)

BY

Name : G.PRASANTHI

Roll No : 085NIE0022

Supervisor : S.MUNEERA(Asst. professor)


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CONTENTS

Name of the topic Page No.

1. Profile 1-15

2. Data 16- 23

3. Tools Of Analysis 24-25

4. Analysis 26-34

5. SWOT Analysis 35

6. Observations 36

7. Conclusion 37


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PROFILE

INTRODUCTION:

Ceramic and cement based tile are similar in at least one respect, they both are often

formed by similar means. That is where the similarity ends. After the formation of the tile

body, ceramic tiles go through a firing process. Cement tiles are not fired.

All tiles start out in the earth. Raw materials are quarried and refined. In the case of

ceramic tiles, this includes clays, talc, and other minerals. Obviously cement based tile

include cements and sands. Great care is taken in the proper mixture of these materials, as

each one is critical to the success, quality and characteristics of the product produced.

Once the raw materials are quarried, prepared, and properly mixed, the tiles may now be

formed.

The latin word tegula and its french derivative tuile mean quite precisely a roof tile of

baked clay. the english tile is less precise, for it can in addition be used of any kind of

earthenware slab applied to any surface of a building the word ceramic comes from the

greek word keramos meaning pottery, it is related to an old sanskrit root meaning to

burn but was primarily used to mean burnt stuff.

.Ceramic Industry in India is about 100 years old. It comprises ceramic tiles, sanitaryware

and crockery items. Ceramic products are manufactured both in the large and small-scale

sector with wide variation in type, size, quality and standard. India ranks 7th in the world

in term of production of ceramic tiles and produced 200 million sq. meters of ceramic

tiles, out of a global production of 6400 million sq. meters during 2003-04. State-of-the-

art ceramic goods are being manufactured in the country and the technology adopted by

the Indian ceramic Industry is of international standard. The word "Ceramic" hasoriginated from the Greek word, "Keramos", which means pottery. It also relates to an

ancient Sanskrit word whose root meaning is to burn, but it is predominantly used to

indicate "burnt stuff". Almost 10,000 yearslater, with the establishment of settled

communities, tiles were manufactured in Mesopotamia and India.


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The first instance of functional pottery vessels being used for storing water and food is

thought to be around 9,000 or 10,000 BC. Clay bricks were also made around the same

time.The usage and the art of making and decorating ceramic tiles had spread and by 900

A.D., decorative tiles had become widely used in Persia, Syria, Turkey and across North

Africa. As transport and communication developed, tile usage and its penetration in other

territories increased. Wars and territory take-overs caused this art to spread even faster.

The Romans introduced tile making in Western Europe as they occupied territories. The

Low Countries of Northern Europe somehow acquired the technology from Persia, while

the Moors brought African tiles with them when they invaded Iberia (Spain). .

By the end of the 12th century, use and manufacture of Ceramic Tiles had spread across

Italy and Spain and into the rest of Europe. Till that time they were mainly used to

decorate the floors of Cathedrals and Churches. The skill had eventually vanished from

Europe in the 16th century following the reformation. A form of tile making had also

evolved among the natives of North and South America at some point. The first

decorative tiles to appear in Colonial North America were imported from Northern

Europe, mainly England the Brits having hijacked the technology from the Dutch.

In the early days, the tiles were hand-made, each tile was hand-formed and hand-painted,

thus each was a work of art in its own right. Ceramic tile was used almost everywhere on

walls,floors,ceilings,fireplaces,inmurals. Today Ceramic tile throughout the world is not

hand-made or hand-painted for the most part. Automated manufacturing techniques are

used and the human hand does not enter into the picture until it is time to install the tile.

They are used in an almost infinite number of ways and you dont have to consideryourself wealthy to own them. In commercial buildings, where both beauty and durability

are considerations, ceramic tiles will be found, particularly in lobby are as and restrooms.


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In fact most modern houses throughout use Ceramic tiles for their bathrooms and

kitchens and in every vital area of the premise. Ceramic tiles are also the choice of

industry, where walls and floors must resist chemicals. And the Space Shuttle never

leaves Earth without its protective jacketofhigh-tech,heatresistanttiles

HISTORY

Historically, man has desired to create living spaces which were beautiful, durable, and

user friendly with that in mind, ceramic tile has been made by man for 4000 years

beautiful tiled surfaces have been found in the oldest pyramids, the ruins of babylon, and

ancientruinsofgreek cities. Decorative tilework was invented in the near east, where it has

enjoyed a longer popularity and assumed a greater variety of design than anywhere in the

world. during the islamic period, all methods of tile decoration were brought to perfection

in persia. in europe decorated tiles did not come into general use outside moorish spain

until the second half of the 12th century. the tile mosaics of spain and Portugal the

maiolica floor tiles of rennaisance italy, the faiences of antwerp, the development of tile

iconography in england and in the netherlands, and the ceramic tiles of germany are all

prominent landmarks in the history of ceramictile.

The ceramics industry in India came into existence about a century ago and has matured

over time to form a industrial base. From traditional pottery making, the industry has

evolved to find its place in the market for sophisticated insulators, electronic and

electrical items. Over the years, the industry has been modernising through new

innovations in product profile, quality and design to emerge as a modern, world-class

industry, ready to take on global competition.

Though there are a number of large companies in the ceramics sector, small and medium

enterprises (SMEs) account for more than 50 per cent of the total market in India,

offering a wide range of articlesincluding crockery, art ware, sanitaryware, ceramic tiles,

refractory and stoneware pipes among others.Most of the players are grouped together in

clusters.Over the last two decades, the technical ceramics segment has recorded an


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impressive growth propelled by the demand for high-alumina ceramics, cuttings tools and

structural ceramics from the industry.

Through the centuries, tile decoration was improved upon, as were methods of tile

manufacture. For example, during the Islamic period, all methods of tile decoration were

brought to perfection in Persia. Throughout the known world, in various countries and

cities, Ceramic tile production and decoration reached great heights. The tile mosaics of

Spain and Portugal, the floor tiles of Renaissance Italy, the faiences of Antwerp, the

development of tile iconography in the Netherlands, and the Ceramic tiles of Germany

are all prominent landmarks in the history of Ceramic tile.

PRESENT-SCENARIO:

During the last financial year, SMEs in the Morbi ceramic industry witnessed lower sales

growth NAdue to declining demand in both domestic and international markets. The

growth rate of the industry had gone down from 30%-40% to 10%

Added to the falling orders, the unorganized ceramic and tiles sector had to grapple with

rising costs and stiff competition from the cheaper Chinese products, which were

flooding the domestic market.

Last year, while several small tiles manufacturing units had to cut down production from

four lines to two, many units in Morbi had to shut shop due to increasing production costs

and falling revenues, reveals D Patel, Spokesperson, Laxmi Tiles, a small-sized tile

manufacturing company in Gujarat.

Moreover, small players in the Morbi ceramic industry were severely affected by higher

taxes, rising costs of fuel and transportation, lack of raw materials and a slowdown in

demand from the construction sector. Due to such problems, tile manufacturing units

were compelled to operate at less than half the capacity.


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GROWTH TRENDS:

Indian ceramics industry provides employment to 550,000 people, of whom 50,000 aredirectly employed.

As per 2007-08 estimates, there are at present 16 units in the organised sector, with an

installed capacity of 21 lakh million tonnes (MT). This accounts for 2.5 per cent of the

world ceramic tile production. The ceramic tile industry has been growing at about 12 per

cent per annum.

In 2007-08, production of ceramic tiles was estimated to be at a 290.00 million squaremetres as against 220 million sq. metres of ceramic tiles, out of the global production of

6,400 million sq.metres during 2006-07, when India was ranked 7th in the world in terms

of production of ceramictiles produced.

Gujarat accounts for around 70 per cent of total ceramic production, and the

unorganised sector,comprising entirely of SMEs, manufactures a staggering 37 per cent

of the countrys total ceramicoutput.

India ranks fifth among tile makers globally, with the unorganised sector accounting for

55 per cent of the countrys total tile business, according to the Indian Council for

Ceramic Tiles and Sanitaryware, an organization of tile makers. Production of tiles stands

at about 340 million sq. m a year, and annual turnover for the organized sector is about

Rs 2,865 crore (US$ 588.77 million), while it is about Rs 3,500 crore (US$ 719.21

million) for the unorganised sector.

The size of the unorganised ceramic tiles industry - comprising wall tiles, floor tiles and

fully vitrified tiles - is around US$ 3.5 billion. These are exported to East and West Asian

countries.


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In sanitaryware industry, at present, the production capacity in organised sector is 1.43

lakh MT per annum, and 3,65,695 MT production has been estimated in 2007-08. In the

small scale sector, there are over 200 units with capacity of 53,000 MT per annum. The

industry turnover is above Rs 500-600 crores (US$ 102.77 million - US$ 123.32 million)

per annum. Sanitaryware industry has been growing by about 5 per cent per annum

during the last two years.

Potteryware, signifying crockery and tableware, are produced both in the large scale and

thesmall scale sectors. There are 16 units in the organised sector, with a total installed

capacity of 43,000 MT per annum and the production was estimated at 58,781 MT for

2007-08. Small-scale sector has over 1,200 plants, with a capacity of 3 lakh MT per

annum. Bone china and stoneware contribute to the major portion of the production of

ceramics tableware. There are, at present, 16 units in the organized sector with an

stalledcapacityof21akh MT. It accounts for about 2.5% of world ceramic tile

EXPORTS:

India exports ceramics worth approximately US$ 1 billion per annum. The main export

products are chemical porcelain and insulators, handicrafts, artware and stoneware

crockery.

The ceramic tile industry has shown a growth rate at about 12 per cent per annum.

These are exported to East and West Asian countries. The exports during 2006-07

amounted to Rs 251.20 crores (US$ 51.63 million).

The exports in sanitaryware industry was to the tune of Rs 93.49 crores (US$ 19.21

million)during 2006-07.

The export of potteryware during 2006-07 was of the order of Rs 45.50 crore (US$ 9.35

million)and major markets include the US and Europe.


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IMPORTS:

Renovation and modernisation of existing houses will also drive the demand

Excise duty on ceramic tiles reduced from 24 per cent to 16 per cent in the Union

Budget 2001-02

Floor tiles projected to grow faster, driven by the shift from Mosaic to ceramic

tiles High growth rate of around 12 % will be sustainable, can even go upto 20 to

25 % according to some analysts. Ceramic Tiles today have become an integral

part of home improvement. It can make a huge difference to the way your

interiors and outdoors look and express

The Indian tile industry, despite an overall slowdown of the economy, continues

to grow at a healthy 15% per annum. Investments in the last 5 years have aggregated over Rs. 2000 crores and

production during 2006-07 stood at approx. 340 million sq mts.

The Indian tile industry is divided into organized and unorganized sector.

The organized sector comprises of approximately 16 players. The current size of

the unorganized sector is about Rs 3000 crores

The unorganized sector accounts for 55% of the total industry bearing testimony

of the attractive returns from this sector. The size of the unorganized sector is

approximately Rs 3500 crores.

Revenue earning industry - excise mops up over Rs. 350 crores annually from the

organized sector itself.

Indian rank Indian ranks in the top 5 list of countries in terms of tile production in

the world.


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MANUFACTURING PROCESS:

Once the raw materials are processed, a number of steps take place to obtain the finished

product. These steps include batching, mixing and grinding, spray-drying, forming,

drying, glazing,and firing. Many of these steps are now accomplished using automated

equipment.

Batching

For many ceramic products, including tile, the body composition is determined by

the amount and type of raw materials. The raw materials also determine the color

of the tile body, which can be red or white in color, depending on the amount of

iron-containing raw materials used. Therefore, it is important to mix the right

amounts together to achieve the desired properties. Batch calculations are thus

required, which must take into consideration both physical properties and

chemical compositions of the raw materials. Once the appropriate weight of each

raw material is determined, the raw materials must be mixed together.

Mixing and grinding

Once the ingredients are weighed, they are added together into a shell mixerribbon mixer,

or intensive mixer. A shell mixer consists of two cylinders joined into a V, which rotates

to tumble and mix the material. A ribbon mixer useshelicalvanes, and an intensive mixer

uses rapidly revolving plows. This step further grinds the ingredients, resulting in afiner

particle size that improves the subsequent forming process (see step #4 below).

Sometimes it is necessary to add water to improve the mixing of a multiple-ingredientbatch as well as to achievefine grinding.This process is called wet milling and is often

performed using a ball mill. The resulting water-filled mixture is called aslurryor slip.

The water is then removed from the slurry by filter pressing (which removes 40-50

percent of the moisture), followed by dry milling.
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Spray drying

If wet milling is first used, the excess water is usually removed viaspraydrying.

This involves pumping the slurry to an atomizer consisting of a rapidly rotating

disk ornozzle.Droplets of the slip are dried as they are heated by a rising hot air

column, forming small, free flowing granules that result in a powder suitable for

forming.

Tile bodies can also be prepared by dry grinding followed by granulation.

Granulation uses a machine in which the mixture of previously dry-ground

material is mixed with water in order to form the particles into granules, which

again form a powder ready for forming.

Forming

Most tile is formed by dry pressing. In this method, the free flowing powder

containing organicbinderor a low percentage of moistureflows from ahopper

into the forming die. The material is compressed in a steel cavity by steel plungers

and is then ejected by the bottom plunger. Automated presses are used with

operating pressures as high as 2,500 tons.

Several other methods are also used where the tile body is in a wetter, more

moldableform. Extrusion plus punching is used to produceirregularlyshaped tile

and thinner tile faster and more economically. This involves compacting a plastic

mass in a high-pressure cylinder and forcing the material to flow out of the

cylinder into short slugs. These slugs are then punched into one or more tiles

using hydraulic or pneumaticpunching presses.Ram pressing is often used for

heavily profiled tiles. With this method, extruded slugs of the tile body are

pressed between two halves of a hard or porous mold mounted in a hydraulic

press.
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The formed part is removed by first applying vacuum to the top half of the mold

to free the part from the bottom half, followed by forcing air through the top half

to free the top part. Excess material must be removed from the part and additional

finishing may be needed.

Another process, called pressure glazing, has recently been developed. This

process combines glazing and shaping simultaneously by pressing the glaze (in

spray-dried powder form) directly in the die filled with the tile body powder.

Advantages include the elimination of glazing lines, as well as the glazing waste

material (calledsludge)that is produced with the conventional method.

Drying

Ceramic tile usually must be dried (at high relative humidity) after forming,

especially if a wet method is used. Drying, which can take several days, removes

the water at a slow enough rate to prevent shrinkage cracks. Continuous or tunnel

driers are used that are heated using gas or oil, infrared lamps, or microwave

energy. Infrared drying is better suited for thin tile, whereas microwave drying

works better for thicker tile. Another method,impulsedrying, uses pulses of hot

air flowing in thetransversedirection instead of continuously in the material flow

direction.

Glazing

To prepare the glaze, similar methods are used as for the tile body. After a batch

formulation is calculated, the raw materials are weighed, mixed and dry or wet

milled. The milled glazes are then applied using one of the many methods

available. In centrifugal glazing or discing, the glaze is fed through a rotating disc

that flings or throws the glaze onto the tile. In the bell/waterfall method, a stream

of glaze falls onto the tile as it passes on a conveyor underneath. Sometimes, the

glaze is simply sprayed on. For multiple glaze applications, screen printing on,
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under, or between tile that have been wet glazed is used. In this process, glaze is

forced through a screen by a rubber squeegee or other device. Dry glazing is also

being used. This involves the application of powders, crushed frits(glass materials),

and granulated glazes onto a wet-glazed tile surface. After firing, the glaze particles

melt into each other to produce a surface like granite.

Firing

After glazing, the tile must be heated intensely to strengthen it and give it the

desiredporosity.Two types of ovens, or kilns, are used for firing tile. Wall tile, or

tile that is prepared by dry grinding instead of wet milling (see #2 and #3 above),

usually requires a two-step process. In this process, the tile goes through a low-

temperature firing called bisque firing before glazing. This step removes the

volatiles from the material and most or all of the shrinkage. The body and glaze

are then fired together in a process calledglost firing.Both firing processes take

place in a tunnel orcontinuous kiln,which consists of a chamber through which

the ware is slowly moved on a conveyor on refractorybattsshelves built of

materials that are resistant to high temperaturesor in containers calledsaggers.Firing in a tunnel kiln can take two to three days, with firing temperatures around

2,372 degrees Fahrenheit (1,300 degrees Celsius).

For tile that only requires a single firingusually tile that is prepared by wet

millingroller kilns are generally used. These kilns move the wares on a roller

conveyorand do not require kiln furnitures such as batts or saggers. Firing times

in roller kilns can be as low as 60 minutes, with firing temperatures around 2,102

degrees Fahrenheit (1,150 degrees Celsius) or more.

After firing and testing, the tile is ready to be packaged and shipped.
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BYPRODUCTS:

A variety of pollutants are generated during the various manufacturing steps; these

emissions must be controlled to meet air control standards. Among the pollutants

produced in tile manufacture are fluorine and lead compounds, which are produced

during firing and glazing. Lead compounds have been significantly reduced with the

recent development of no-lead or low-lead glazes. Fluorine emissions can be controlled

with scrubbers, devices that basically spray the gases with water to remove harmful

pollutants. They can also be controlled with dry processes, such as fabric filters coated

with lime. This lime can then be recycled as a raw material for future tile.

The tile industry is also developing processes to recycle wastewater and sludge produced

during milling, glazing, and spray-drying. Already some plants recycle the excess powder

generated during dry-pressing as well as the overspray produced during glazing. Waste

glaze and rejected tile are also returned to the body preparation process for reuse.

QUALITY CONTROL:

Most tile manufacturers now use statistical process control (SPC) for each step of the

manufacturing process. Many also work closely with their raw material suppliers to

ensure that specifications are met before the material is used. Statistical process control

consists of charts that are used to monitor various processing parameters, such as particle

size, milling time, drying temperature and time, compaction pressure, dimensions after

pressing, density, firing temperature and time, and the like. These charts identify

problems with equipment, out of spec conditions, and help to improve yields before the

final product is finished.
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PRODUCTS:

Technical ceramics consists of adhesives, alumina products bearings, beryllium

products biocreamices dental bioceramices,medical implants,boride products, carbide

products,catalysts,cermet coating, boron nitride, carbon-carbon composites, ceramic-

polymercomposites,intermetallicculters,knives,cuttingtools,dies,engine

components,tilters,fuel cells,glass-ceramices heat exchanges.

Artistic ceramics products consists of ceramics artware, sculptures, glass artware,

lighting, ornamental aware pottery. These are typically mass consumptions items and

have large market shares new designs styles command consumer attraction and sales.

Electrical and electronic applications includeantennas,dielectric capacitors,

conductors crystals,diodes,electrical porcelain insulators,ferrits and Ferro

management filters,forsterite ceramics tiles high voltage insulators hybrid circuits I c

packing,R.C.l low voltage hard and soft magnets,oscillators,SAW piezo electric, pyre

electricals,rectifiers,resistors,thick-film,resonators,semiconductors,sensors,spark

plugs,substacts aluminum nitride substrate glass substacts,silicon carbide, superconductors,microwaves,wire tapes,thermistors,transducers transformes,ultrasonic

ceramics varistors

KEY PLAYERS:

Saint-gobain was one of the foremost players to enter India and the success story is

exemplary for other potential entrants. The saint-gobain group entered India in1966 by

acquiring a majority stake in grind well Norton. Location at sriperumbuder near Chennai,with an initial investments of 125 million this plant manufacturer float glass for

mirrors,architectural,automotive segments and otherapplication.This groupsnet turnover

has seen a steady increase over the years. glass a accounted for the majority of sales,

followed by adrasives,ceramics&plastics and reinforcement.


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DATA

Income details

Ceramic Tiles

Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Total income 2203.35 2589.05 3138.64 3774.3 4854.56 5493.02

Sales 2107.72 2510.74 3085.36 3737.64 4802.09 5419.27

Industrial sales 2030.12 2403.78 2757.59 3045.98 3653.24 3911.52

Sale of goods 2019.74 2396.65 2751.42 3036.12 3634.61 3854.34

Sale of scrap 1.17 1.36 2 1.82 2.24 2.9

Sale of raw materials 0.03 0.06 0 0 0.89 3.47

Job-work income 0.47 1.16 1.9 3.17 6.59 14.14

After sales service income 0 0 0 0 0 0

Construction income 0 0 0 0 0 25.63

Sale of electricity & gas 0 0 0 0.25 4.88 5.57

Fiscal benefits 8.71 4.55 2.27 4.62 4.03 5.47

Income from non-financial services 77.6 106.96 327.77 691.66 1148.85 1507.75

Trading income 75.91 98.51 322.9 687.74 1147.01 1505.65

Income from financial services 15.14 18.6 9.64 12.65 23.82 43.34

Fee based financial services income 0 0 0 0 0 0

Fund based financial services income 12.38 11.18 8.78 8.09 14.32 22.58

Interest income 7.8 7 6.34 4.38 6.16 10.59

Dividends 0.93 1.01 0.89 2.27 5.66 9.48

Income from leasing,etc. 3.65 3.17 1.55 1.44 2.5 2.51

Income from treasury operations 2.76 7.42 0.86 4.56 9.5 20.76

Profit on sale of investments 0.51 1.14 0.36 4.24 3.6 7.52

Profit on long term investments 0.47 0.43 0.35 0 1.27 3.21

Profit on current investments 0.04 0 0 0 0.92 3.77

Income from other treasury operations 0.27 0.31 0.32 0 0.05 0

Gain relating to forex transactions 1.98 5.97 0.18 0.32 5.85 13.24

Other income 6.4 6.26 7.85 10.1 13.04 14.41

Prior period & extra-ordinary income 74.09 53.45 35.79 13.91 15.61 16

Prior period income 72.67 49.69 33.85 10.56 6.22 14.13

Cash prior period income 0.17 36.32 11.57 1.39 1.26 2.72

Bad debts recovered 0 0 0.01 0 0 0

Residual and combined cash prior period income 0.17 36.32 11.56 1.39 1.26 2.72

Non-cash prior period income 72.5 13.37 22.28 9.17 4.96 11.41

Provisions written back 10.76 11.95 20.91 9.05 4.87 11.41

Residual and combined non cash prior period income 61.74 1.42 1.37 0.12 0.09 0

Extra-ordinary income 1.42 3.76 1.94 3.35 9.39 1.87

Profit on sale of fixed assets 0.55 3.54 1.12 1.23 8.46 1.36

Insurance claims 0.4 0.22 0.82 1.96 0.93 0.51

Contra entry for depreciation added 0 0 0 0 0 0

Gain on change in accounting policies 0 0 0 0 0 0

Change in stock 5.36 57.87 125.87 100.25 189.71 96.27

No of companies 33 35 36 35 35 29


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17

Expenses details

Ceramic Tiles

Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-

Total expenses 2114.81 2516.18 3130.17 3757.38 4871.38 5376.

Raw materials, stores & spares 550.62 638.09 891.57 898.53 1114.11 1148.

Raw material expenses 460.86 526.65 771.76 772.51 968.92 978.

Stores, spares, tools consumed 89.76 111.44 119.81 126.02 145.19 169.

Packaging expenses 40.73 70.91 75.09 103 123.15 129.

Purchase of finished goods 69.37 168.55 374.99 616.41 982.67 1276.

Power, fuel & water charges 346.87 439.67 478.11 576.01 682.4 734.

Compensation to employees 156.26 191.2 217.38 247.48 328.44 391.

Indirect taxes 252.7 214.88 219.86 279.44 345.85 371.

Excise duty 228.18 187.47 189.18 226.98 269.7 291.Royalties, technical know-how fees, etc. 1.43 0.28 0.27 0.59 0.54 0

Rent & lease rent 14.76 17.22 16.52 18.86 26.71 34.

Repairs & maintenance 27.83 37.79 41.62 43.51 52.63 55.

Insurance premium 6.65 7.4 12.27 11.61 15.5 14.

Outsourced manufacturing jobs 5.62 7.71 7.06 7.21 7.52 7.

Outsourced professional jobs 4.27 6.7 8.23 7.26 11.15 11.

Directors' fees 0.01 0.04 0.12 0.17 0.21 0.

Advertising expenses 35.62 39.54 64.44 51.01 59.11 60

Marketing expenses 85.18 108.7 117.62 175.72 227.08 227.

Distribution expenses 71.61 96.72 116.01 143.81 208.87 182.

Travel expenses 20.76 25.7 29.2 28.91 38.41 45.

Communication expenses 8.44 9.98 10.07 7.53 9.68 10.

Printing & stationery expenses 1.54 1.97 1.88 1.95 2.7 2.

Miscellaneous expenses 24.23 27.48 33.04 54.06 70.83 80.

Other operational exp. of indl. Enterprises 0.79 7.22 6.05 9.84 10.47 5.

Other operational exp. of non-fin. services enterprises 0 0 0 1.02 0.8 0

Fund based financial services expenses 173.54 144.75 151.23 165.2 190.14 221.

Interest expenses 171.17 142.01 147.77 161.54 185.66 217.

Financial charges on instruments 2.37 2.72 3.46 3.63 4.42 4.

Other fund based financial services expenses 0 0.02 0 0.03 0.06 0.

Fee based financial services expenses 7.74 10.52 10.59 9.34 12.23 11.

Bill discounting charges 0 0 0 0 0

Bank charges, guarantee fees, etc. 7.74 10.52 10.59 9.34 12.23 11.

Treasury operations expenses 1.57 1.04 1.48 2.55 3.41 14.

Loss on sale of investments 0 0.12 0.27 0.01 2.06 10.

Loss on sale of long term investments 0 0.05 0.15 0 0.01

Loss on sale of current investments 0 0 0 0 2.05 10.

Loss relating to forex transactions 1.57 0.92 1.21 2.54 1.35 4.

Loss on revaluation of investments 0 0 0 0 0

Total provisions 15.12 4.44 4.67 4.95 4.72 3

Provisions for bad/ doubtful advances, debts 9.19 4.22 4.48 4.95 4.36 3.


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Depreciation (net of transfer from reval. reserves) 137.51 151.42 165.39 185.2 214.88 226.

Amortisation 6.17 6.13 4.13 3.93 5.41 3.

Write-offs 7.68 5.96 7.68 6.97 3.42 5.

Less: Expenses capitalized 9.67 1.31 0.68 0.63 1.12 0.

Less: DRE & expenses charged to others 0 0 0 0 0.25 0.

Prior period & extra-ordinary expenses 12.16 12.03 5.67 10.19 13.72 5.

Prior period expenses 8.71 8.74 3.81 5.16 2.97 1.

Cash prior period expenses 0.71 4.42 2.34 2.79 2.93 0.

Prior period taxes 0.71 4.2 0.37 2.35 2.5 0.

Residual and combined cash prior period expenses 0 0.22 1.97 0.44 0.43 0.

Non cash prior period expenses 8 4.32 1.47 2.37 0.04 1.

Prior period depreciation 7.28 0.13 0.99 0 0

Residual and combined non cash prior period expenses 0.72 4.19 0.48 2.37 0.04 1.

Extra-ordinary expenses 3.45 3.29 1.86 5.03 10.75 3.

Loss on impairment of assets 0 0 0 0 6.24

Loss on sale of assets 3.43 3.29 1.85 2.58 2.87 0.

Loss on change in accounting policies 0 0 0 0 0

Provision for direct tax 37.7 63.45 58.61 85.75 105.99 92.

Corporate tax 14.3 28.17 29.24 50.98 66.63 74.

Deferred tax 29.04 35.43 32.92 33.13 36.56 20

Less: Deferred tax assets / credit 5.64 0.16 3.55 4.14 3.16 8.

Other direct taxes 0 0.01 0 5.78 5.96 6.

Fringe benefits tax 0 0 0 5.61 5.85 6.

Profit /surplus after tax 93.9 130.74 134.34 117.17 172.89 212.

Research & development expenses 1.28 0.73 1.35 1.12 2.07 2.

Research & development expenses: Capital account 0.38 0.08 0.14 0.1 0.16 0

Research & development expenses: Current account 0.9 0.65 1.21 1.02 1.91 2.

No of companies 33 35 36 35 35


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19

Assets

Ceramic Tiles


Gross fixed assets 2757.68 3057.35 3392.52 3891.72 4416.02 4690.55

Land & building 488.38 489.66 516.43 621.84 713.45 777.57

Plant & machinery 2109.82 2370.63 2629.51 2891.46 3323.02 3413.32

Transport & comm. equipment/infrastructure 28.35 34.08 36.81 44.65 53.25 58.36

Furniture,amenities & other fixed assets 54.4 65.02 72.17 139.07 106.14 125.59

Capital work-in-progress 72.51 93.18 132.34 188.58 212.88 308.42

Intangible assets 4.04 4.05 5.26 6.12 7.26 7.29

Net pre-operative expenses pending allocation 0.18 0.73 0 0 0.02 0

Net lease reserve adjustment 0 0 0 0 0 0

Less: Cumulative depreciation 909.38 1040.49 1172.43 1280.43 1465.02 1577.14

Less: Arrears of depreciation 0 0 0 0 0 0

Net fixed assets 1848.3 2016.86 2220.09 2611.29 2951 3113.41

Investments 77.36 120.22 126.8 179.12 154.92 200.79

Equity shares 58.3 94.57 96.59 94.05 105.1 131.3

Preference shares 0.82 0 0 2.01 2.01 2.01

Mutual funds 13.81 19.91 25.85 81.78 21.48 63.5

Debt instruments 0.55 0.06 0.16 0.16 0.16 0.16

Approved securites (slr/statutory req.) 0 0 0 0 0 0

Assisted companies 0 0 0 0 0 0

Others 3.96 5.99 4.36 1.12 26.17 3.82

Less: Provision for dimunition in value of investments 0.08 0.31 0.16 0 0 0

Group companies 46.46 80.31 83.1 82.54 93.65 119.85

Non-group companies 27.02 34.23 39.4 95.36 35 77.02

Market value of quoted investments 24.01 15.41 19.35 7.74 32.3 66.69

Deferred tax assets 86.14 61.03 74.06 66.51 60.19 49.26

Current assets 1076.19 1218.58 1482.35 1921.93 2473.92 2687.26

Cash & bank balance 57.71 74.73 83.56 195.5 261.93 175.76

Inventories 520.65 613.8 778.61 917.56 1169.73 1265.42

Receivables 473.64 498.77 570.65 713.04 918.54 1095.57

Expenses paid in advance 24.19 31.28 49.53 95.83 123.72 150.51

Loans & advances 57.16 44.82 31.07 10.81 36.27 151.78

Deferred revenue expenditure 32.84 16.44 13.64 13.89 15.96 13.97

Total assets 3177.99 3477.95 3948.01 4803.55 5692.26 6216.47

No of companies 33 35 36 35 35 29


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20

Liabilities

Ceramic Tiles


Net worth 961.04 1065.48 1151.08 1391.8 1908.75 2422.86

Authorised capital 436.69 437.84 452.73 437.93 570.78 504.78

Issued equity capital 297.86 297.53 306.59 282.33 335.14 316.04

Paid up equity capital (net of forfeited capital) 293.34 293.82 303.07 270.66 323.44 315.89

Forfeited equity capital 0.03 0.03 0.03 0.02 0.03 0.03

Paid up preference capital (net of forfeited capital) 137.82 136.33 137.28 70 38.49 30.74

Capital contibution, suspense and application money 11.18 36.27 10.04 24.04 5.6 36.4

Reserves & surplus 518.67 599.03 700.66 1027.08 1541.19 2039.8

Free Reserves 620.99 727.56 836.77 1126.71 1662.46 2095.34

Security premium reserves (Net of deductions) 237.08 252.09 250.99 387.41 740.79 982.21

Other free reserves 383.91 475.47 585.78 739.3 921.67 1113.13

Specific Reserves 89.83 80.09 71.06 74.3 67.26 65.17

Revaluation Reserves 25.16 1.1 0.02 0.02 0.02 0.02

Less Accumulated losses 217.31 209.72 207.19 173.95 188.55 120.73

Total borrowings 1445.68 1537.15 1764.67 1949.18 2219.21 2184.39

Bank borrowings 772.22 890.22 1181.3 1366.11 1781.59 1669.49

Short term bank borrowings 419.73 397.11 450.53 489.67 707.11 706.07

Long term bank borrowings 352.49 493.11 730.77 876.44 1074.48 963.42

Financial institutional borrowings 345.83 292.15 147.88 71.18 50.8 62.83

Central & state govt. (usually sales tax deferrals) 0 0 0 0 0 0

Debentures / bonds 138.1 113.17 95.13 55.2 80.09 45.03

Convertible 8.67 11.98 11.98 3.63 13.76 0

Non-convertible 129.43 100.99 82.95 51.57 65.78 44.61

Fixed deposits 40.33 40.68 33.92 25.7 21.83 20.86

Foreign borrowings 0.82 26 78.41 146.88 148.56 157.64

Of which : euro convertible bonds 0 0 0 0 0 0

Borrowings from corporate bodies 15.83 34.71 43.45 47.21 60.39 74.1

Group / associate cos. 2.96 5.39 4.55 0.66 0.83 0.64

Borrowings from promoters / directors 19.29 9.46 11.19 23.64 29.02 35.4

Commercial paper 0 40 80 60 0 50

Hire purchase borrowings 5.48 3.36 3 4.37 5.09 3.82

Deferred credit 34.9 33.21 33.21 30.79 29.84 30.89

Other borrowings 72.88 54.19 57.18 118.1 12 34.33

Secured borrowings 1275.32 1320.31 1471.11 1543.78 1936.86 1845.2

Unsecured borrowings 170.36 216.84 293.56 405.4 282.35 339.19

Current portion of long term debt 115.19 154.76 217.84 159.15 197 141.25Current liabilities & provisions 490.82 591.3 732.3 1147.05 1227.55 1271.27

Sundry creditors 278.5 328.56 444.93 711.24 723.01 755.53

Acceptances 3.08 11.27 14.89 60.01 63.95 20.33

Deposits & advances from customers & employees 50.07 57.19 69.1 80.96 88.86 83.94

Interest accrued 24.89 21.26 15.85 15.72 17.2 15.26

Share application money 0.19 0.15 0.15 0 0 0

Other current liabilities 89.88 111.99 103.44 134.74 140.07 171.19

Provisions 44.21 60.88 83.94 144.38 194.46 225.02


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Deferred tax liability 280.45 284.02 299.96 315.52 336.75 337.95

Total liabilities 3177.99 3477.95 3948.01 4803.55 5692.26 6216.47

Net worth (net of reval & DRE) 903.04 1047.94 1137.42 1377.89 1892.77 2408.87

Contingent liabilities 305.31 362.61 393.54 395 517.11 618.61

No of companies 33 35 36 35 35 29


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22

Profits

Ceramic Tiles

Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-

PBDITA 448.82 496.49 513.7 557.25 689.31 757.

Depreciation 137.51 151.42 165.39 185.2 214.88 226.

Amortisation 6.17 6.13 4.13 3.93 5.41 3.

PBIT 305.14 338.94 344.18 368.12 469.02 527.

Interest paid 171.17 142.01 147.77 161.54 185.66 217.

Financial charges on instruments 2.37 2.72 3.46 3.63 4.42 4.

Fee based financial services expenses 0 0.02 0 0.03 0.06 0.

PBT 131.6 194.19 192.95 202.92 278.88 305

Provision for direct tax 37.7 63.45 58.61 85.75 105.99 92.

Corporate tax 14.3 28.17 29.24 50.98 66.63 74.

Deferred tax 29.04 35.43 32.92 33.13 36.56 20

Less: Deferred tax assets / credit 5.64 0.16 3.55 4.14 3.16 8.

Other direct tax 0 0.01 0 5.78 5.96 6.

Fringe benefits tax 0 0 0 5.61 5.85 6.

PAT 93.9 130.74 134.34 117.17 172.89 212.

PAT (as reported by the Co.) 55.78 133.9 124.46 113.95 173.19 212.

Prior period & extra-ordinary income 74.09 53.45 35.79 13.91 15.61

Prior period & extra-ordinary expenses 12.16 12.03 5.67 10.19 13.72 5.

Net prior period & extraordinary transactions -61.93 -41.42 -30.12 -3.72 -1.89 -10.

PBDITA net of P&E 386.89 455.07 483.58 553.53 687.42 746.

PBIT net of P&E 243.21 297.52 314.06 364.4 467.13 516.

PBT net of P&E 69.67 152.77 162.83 199.2 276.99 295.

PAT net of P&E 31.97 89.32 104.22 113.45 171 202.

Distribution of profits (%)

PBDITA 100 100 100 100 100 1

Depreciation & Amortisation 32.0128337 31.732764 32.9998053 33.9398834 31.958045 30.38838

Financial charges 38.6658349 29.1546658 29.4393615 29.645581 27.5841058 29.26719

Tax 8.39980393 12.7797136 11.4093829 15.3880664 15.3762458 12.25915

PAT 20.9215276 26.3328567 26.1514503 21.0264693 25.0816033 28.08525

Non--provisions for: 7.61 5.74 3.22 2.85 2.7 3.

Diminution in investement 0 0 0 0 0

Sundry debtors 4.25 3.48 3.22 2.82 2.67 3.

Loans & advances including NPAs 1.72 1.72 0 0.03 0.03 0.

Loans & advances to group cos. 0.54 0.54 0 0 0

Interest expenses 1.1 0 0 0 0

Power expenses 0 0 0 0 0

Gratuity 0 0 0 0 0

Others 0 0 0 0 0

No of companies 33 35 36 35 35


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23

TOOLS OF ANALYSIS

1.Cost Structure:

Cost structure shows the percentage of cost incurred to a product. It is the relationship

between fixed charges and value added. Here value added means sales-(raw material

expenses + power, water& fuel consumption).Fixed charges means compensation

paid to employees, interest paid and depreciation.

Cost Structure = Fixed Charges

Value Added

2.Operating Performance:

Operating performance shows the relationship between EBIT and Total assets.

Operating Performance = EBIT X100

Net Assets

3. Net performance:

Net performance shows the relation between net profit and total assets.

Net performance=Net profit X100

Total assets.

4. Financial Performance:

Financial performance shows the relationship between profit after tax and net worth.

Financial Performance = Net profit X100

Net Worth


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5. Growth Rate:

Growth rate of sales represents how much percentage of sales are increased or decreasedin a year as compared to the previous year.

Growth Rate = Current Year -1

Base Year

6. Trend analysis:

Trend analysis is used for estimating the future value of the industry or company.

Straight line trend is represented by the equation.

Y= a+bx

In order to determine the values of the constants a and b the following normal equations

are to be solved.

Y=Na+bx

2

Xy=ax+bx

7. Coefficient of correlation:

Correlation is the degree of association between two variables and it represented in

terms of a coefficient known as coefficient of correlation. The range of correlation

coefficient is-1and+1.If the coefficient is negative, then the variables are inversely

proportional and maximum when it is -1. If it is 0, there is no association between the

variables. If the coefficient is positive then the variables are associated directly and it is

maximum when it is =1.

R = (x-x)(y-y)

_2 _ 2

(x-x) (y-y)


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25

Analysis

Financial performance:

Financial performance= Net profit X100

Net worth

Table.1 (Rs. in crores)

Graph:1

Financial performance

10

12 12

89 9

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008

years

ratio

Interpretation:

From the above table it is observed the financial performance of ceramic tiles industry is

constant during the years 2004-2005 & 2007-2008.There is increase in financial

performance due to increasing in net profit is more than that of net worth.

Years Net profit Net worth Financial

performance

2003 93.9 961.04 10

2004 130.74 1065.48 12

2005 134.34 1151.08 12

2006 117.17 1391.8 8

2007 172.89 1908.75 9

2008 212.67 2422.86 9


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26

Cost Structure:It shows the relationship between Fixed charges & Value added.

Cost structure= Fixed charges

Value added

Table.2 (RS.in cross)

S.no Particulars 2003 2004 2005 2006 2007 2008

1. Sales 2107.72 2510.74 3085.36 3737.64 4802.09 5419.27

2. Raw materials 460.86 526.65 771.76 772.51 968.92 978.45

3. Power& fuel 346.87 439.67 478.11 576.01 682.4 734.53

4. Compensation

to employees

156.26 191.2 217.38 247.78 328.44 391.22

5. Interest paid 171.17 142.01 144.77 161.54 185.66 217.52

6. Depreciation 137.51 151.42 165.39 185.2 214.88 226.22

7. Value added 1299.99 1544.42 1835.49 2389.12 3150.77 3706.29

8. Fixed charges 464.94 484.63 527.54 594.22 728.98 834.96

9. Cost Structure 0.36 0.31 0.29 0.25 0.23 0.23


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27

Graph: 2

Cost structure

0.36

0.31 0.29

0.250.23 0.23

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

2003 2004 2005 2006 2007 2008

years

Coststructure

Interpretation:From the above table it is observed that the cost structure of ceramics tiles industry

efficiency had increased from the year 2003 to 2007.It is because of increases in sales is

more than that of fixed charges. But in the years 2007& 2008 its efficiency is constant

because the value of fixed charges and value added are same.


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Operating Performance:

It shows the relationship between EBIT& Total Assets.

Operating Performance= EBIT X100Total Assets

Table.3 (Rs.in crores)

Years EBIT Total Assets Operating

Performance

2003 305.14 3177.99 96

2004 338.94 3477.95 97

2005 344.18 3948.01 87

2006 368.12 4803.55 76

2007 469.02 5629.26 82

2008 527.12 6216.47 84

Graph:3

Operating performance

96 97

87

76 82 84

0

20

40

60

80

100

120

2003 2004 2005 2006 2007 2008

Years

Ratio

Interpretation:From the above table it is observed that the operating performance of ceramics tiles

industry is fluctuated during the study period. In the year 2004 the ratio has shown

highest value indicating a great operating performance for complete period. This is

because of more increase in sales when compare to net assest


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29

Net performance:

Net performance shows relation ship between in net profit and total assets.

Net performance= Net profit X100

Total assets.

Table:4 (Rs.in crores)

Years Net profit Total assets Net performance

2003 93.9 3177.99 29

2004 130.74 3477.95 37

2005 134.34 3948.01 34

2006 117.17 4803.55 24

2007 172.89 5692.26 30

2008 212.67 6216.64 34

Graph:4

Net performance

29

3734

24

30

34

0

5

10

15

20

25

3035

40

2003 2004 2005 2006 2007 2008

years

Ratio

Interpretation:

From the above table it is observed that the net performance of ceramics tiles industry is

showing fluctuations during the study period. In the year 2004 the ratio has shows highest

value indicating a great net performance for the complete period. This is because of more

increasing in net profit when compare to total assets.


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30

Growth trend in total assets:

Growth rate of sales represents how much percentage of sales are increased or decreasedin a year as compared to the previous year.

Growth Rate = Current Year -1

Previous Year


Years Assets Trend in (%)

2003 3177.99 ---------

2004 3477.95 9

2005 3948.01 13

2006 4803.55 21

2007 5692.26 18

2008 6216.47 9

Graph:5

Growth trend in total assets

9

13

21

18

9

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008

yeras

values

Interpretation:

From the above table it is observed that the growth trend in total assets of ceramics tiles

industry is fluctuating during the study period. In the year 2006 the trend value is

increased because of increase in assets.


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Growth trend in total Income:

Growth rate of sales represents how much percentage of sales are increased or decreased

in a year as compared to the previous year.

Growth Trend = Current Year -1

Previous Year

Table:6 (Rs in crores)

Years Total Income Trend in (%)

2003 2203.35 ------------

2004 2589.05 17

2005 3138.64 21

2006 3774.3 20

2007 4854.56 28

2008 5493.02 13

Graph:6

Growth trend in total income

17

2120

28

13

0

5

10

15

20

25

30

2003 2004 2005 2006 2007 2008

years

values

Interpretation:

From the above table it is observed that drastic increase in trend can be seen in the year

2007.In the same way there is more decrease in trend in year 2008.This is due to increase

in total income in year 2008.


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Trend analysis:

Trend analysis is used for estimating the future value of the industry or company. Straightline trend is represented by the equation.

Y= a+bx


Years Net worth

2003 961.04

2004 1065.48

2005 1151.08

2006 1391.8

2007 1908.75

2008 2422.86

2009 2630.27

2010 2858.771

2011 3161.633

Graph:7

Trend analysis

961.04 1065.48 1151.08

1391.8

1908.75

2422.86 2630.27

2858.771

3161.633

0

500

1000

1500

2000

2500

3000

3500

2003 2004 2005 2006 2007 2008 2009 2010 2011

values

Trend

analysis

Estimated value of net worth for 2009 is 2630.27.




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33

Correlation between sales& profit:

Correlation is the degree of association between two variables and it represented in terms

of a coefficient known as coefficient of correlation. The range of correlation coefficient

is-1and+1

R = (x-x)(y-y)

_2 _ 2

(x-x) (y-y)

Table: 8 (Rs.in crores)

Years Sales Profit

2003 2107.72 93.9

2004 2510.74 130.74

2005 3085.36 134.34

2006 3737.64 117.17

2007 4802.09 172.89

2008 5419.27 212.67

COEFFICIENT OFCORRELATION

0.927

Interpretation:

The coefficient of correlation sales & profit is 0.92.This indicates that there is a strong

associated between sales&profits.As it is positive relationship .It means both the

variables are moving in the same direction.


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SWOT ANALYSIS

STRENGTHS:

Consistent growth of 12-15 percent inspite of slow down in economy.

The Indian ceramic export market is rising the rate of 15 percent per annum.

WEAKNESS:

Not much importance given on brand building and networth thus creating

hindrance for export growth.

Lowper capital consumption (0.15 sq.mt.p.a) as compared to developed nations.

OPPOURTUNITIES:

The construction and housing boom to provide bolstering demand for ceramic

files.

The untapped rural market supported by a strong growth witnessed by Indian

agriculture. Provides tremendous potential for the domestic exramic

manufacturers.

THREATS:

Freight,supply of power and gas remains the key cost-related issues impacting the

industry.

Basic customers duty on import of ceramic files from china and raw materials

imported from abroad should be corrected to prevent dumping of files from china.


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35

OBSRVATIONS

The Financial performance of ceramic tiles industry is constant during the years

2004-2005 & 2007-2008.There is increase in financial performance due to

increasing in net profit is more than that of net worth.

The cost structure of ceramics tiles industry efficiency had increased from the

year 2003 to 2007.It is because of increases in sales is more than that of fixed

charges. But in the years 2007& 2008 its efficiency is constant because the value

of fixed charges and value added are same.

The operating performance of ceramics tiles industry is fluctuated during the

study period. In the year 2004 the ratio has shown highest value indicating a great

operating performance for complete period. This is because of more increase in

sales when compare to net assest.

The Net performance of ceramics tiles industry has fluctuated during the whole

period. In the year 2004 the ratio has shows highest value indicating a great net

performance for the complete period. This because of more increasing in net

profit when compare to total assets.

The growth trend in total assets of ceramics tiles industry is fluctuating during the

study period. In the year 2006 the trend value is increased because of increase in

assets.

It is observed that drastic increase in trend can be seen in the year 2007.In the

same way there is more decrease in trend in year 2008.This is due to increase in

total income in year 2008

The coefficient of correlation sales & profit is 0.92.This indicates that there is a

strong associated between sales&profits.As it is positive relationship .It means

both the variables are moving in the same direction.


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CONCLUSION

Ceramices tiles industry is currently in the midst of a transformation with major

capital expenditure underway and improving operating efficiencies is the major

concern of all players. The analysis carried out on industry indicates the good

operating, financial performance of the industry. The growth rate of sales is

satisfactory. Also the cost structure indicates its efficiency in controlling cost. The

future trend of sales is also in increased condition.

tiles industry

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