A SUMMER TRAINING REPORT ON “MARKET RESEARCH ON CERAMIC TILES INDUSTRY IN GHAZIABAD AND MEERUT REGION AND FINANCIAL ANALYSIS

OF ORIENT CERAMICS LTD.”
SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF

POST GRADUATE DIPLOMA IN BUSINESS ADMINISTRATION (APPROVED BY AICTE, GOVT OF INDIA) (EQUIVALENT TO MBA)
ACCADEMIC SESSION (2008-2010)

Submitted ToMr. T.N.Srivastava Head, Training & Placement Cell Graduate School of Business & Administration, Greater Noida,U.P

Submitted ByNitesh shah B-08-28

External GuideMr. Vijay Deepak Gupta Regional Manager, Orient Ceramics Industries Ltd. GSBA

Internal GuideProf. H.S.SHYAM Faculty, Marketing Dept.,

GRADUATE SCHOOL OF BUSINESS & ADMINISTRATION,GREATER NOIDA 1

Content
Topic Cover pageContent pageCandidate declarationAcknowledgement Chap-IPreface&Scope of the study Objective of the study Chap-IIGlobal Tiles Industry Global Sanitary Industry About Indian Ceramic tiles Industry Industry Statistics Export-Import Scenario Chap-IIIResearch Methodology&Findings Limitations Chap-IVAbout OCIL Financial Analysis &Recommendation Demand Drivers SWOT Analysis Distribution System Ceramic Marketing Chap-V Other Recommendations Risk & Concerns Conclusion References 2 6 6-17 6-7 7 8-15 16-17 17 17-26 17-25 25-26 26-39 26-29 30-36 37 38 38 38-39 39-41 39 40 40-41 41 Page No. 1 2 3 4 5-6 5

Candidate Declaration/Certificate of Supervisor
I hereby declare that the work which is being presented in this report entitled “Market Research on Ceramic Tiles Industry in Ghaziabad & Meerut Region And financial overview of company” is an authentic record of my own work carried out under the supervision of Mr. Vijay Deepak Gupta, Regional Manager, Orient Ceramic Industries Ltd. The matter embodied in this report has not been submitted by me for the award of any other degree.

Dated: 4-7-09 Student

Name of NITESH KUMAR SHAH

This is to certify that the above statements made by the candidate are correct to the best of my knowledge.

Signature

Supervisor’Name:MR.VIJAY DEEPAK GUPTA Designation:REGIONAL MANAGER

Company-Orient Ceramics Industry LTD.

3

Acknowledgement
I express my profound gratitude to Mr. Vijay Deepak Gupta, Regional Manager,
Orient Ceramics Industries Pvt. Ltd who assigned me as a Summer Trainee in

Orient Ceramics Industries Pvt. Ltd. I want to give my sincere thanks to his kind advice and guidance that had made my project successful. Many of the sound advices have been well taken by me and it is largely due to his patience that I was able to achieve my goals successfully. I am also grateful to DR. P.L.Maggu –Executive Director, Graduate School of Business & Administration, Greater Noida, Mr. T.N.Srivastava –Head ,Training and Placement Cell, GSBA, Prof.V.N.Rai, Dean, GSBA, Mr. Vijay Deepak Gupta, Regional Manager, Orient Ceramic Industries Ltd., and all the faculties of GSBA who supported a lot and gave me the permission of Summer Training in Orient Ceramics Industries Ltd.. Also I would like to give regards to my Parents, seniors, friends who have in some way helped me in completing this project.

Nitesh kumar shah PGDBA-III, B08-28

Chapter I
4

world-class industry. refractory and stoneware pipes among others. Almost 10. Most of the players are grouped together in clusters. Overall. The first instance of functional pottery vessels being used for storing water and food is thought to be around 9. Though there are a number of large companies in the ceramics sector.Preface The word "Ceramic" has originated from the Greek word. Over the last two decades. which means pottery. ready to take on global competition. "Keramos". cuttings tools and structural ceramics from the industry. the technical ceramics segment has recorded an impressive growth propelled by the demand for high-alumina ceramics. From traditional pottery making. the Indian ceramics industry has emerged as a major manufacturer and supplier in the global market. art ware. electronic and electrical items. with the establishment of settled communities. the industry has evolved to find its place in the market for sophisticated insulators. Scope Of The Study Ceramic tile comes under ‘Building Material Industry’. tiles were manufactured in Mesopotamia and India. the industry has been modernising through new innovations in product profile. quality and design to emerge as a modern. offering a wide range of articles including crockery. Clay bricks were also made around the same time. Over the years. ceramic tiles.000 BC.” but it is predominantly used to indicate "burnt stuff".000 years later. small and medium enterprises (SMEs) account for more than 50 per cent of the total market in India.000 or 10. Indian Building Material Industry poised to grow at a fast pace of almost 16%/annum due to boom in 5 . sanitary ware. It also relates to an ancient Sanskrit word whose root meaning is “to burn. Over the years. The ceramics industry in India came into existence about a century ago and has matured over time to form a industrial base.

Further scope and opportunity analysis. particularly in NCR region. Objective Of The Study Our soul objective of this report confines with these facts• • • To know the nitty-gritty of Ceramic tile industry as much possible Determine the market size and potential of all the organise and unorganised players A comparative analysis among some major players of tiles industry . growth rate of building material industry is at very high and constantly growing. And they are getting more designer makeovers to suit market demands. By this project finding.real estate and construction industry. especially in Ghaziabad and Meerut region in terms of Quality. Increase in income levels and availability of a range of financing options for housing is enabling rapid growth in housing construction. Brand Equity. In India. • Chapter-II Global Tiles Industry 6 . Also as marble prices begin to pinch purses in these times of meltdown. tiles are making deeper inroads into urban homes. Price and Customer Service. we have been trying to catch the opportunities and demand of various tile making organisations for their commercial and residential needs in Ghaziabad and Meerut region.

Global Sanitaryware Industry The global sanitary ware industry is estimated to be 187 million pieces and growing at about 7 per cent Y-o-Y. 7 . Europe for 26 per cent and USA accounting for 18 per cent of the total global ceramic tile consumption. Spain and Italy were the 2nd and 3rd largest producers with production of 635 million sq. Europe accounts for 30 per cent and USA accounts for 14 per cent of the total global production of ceramic tiles. accounts for about 3. and 589 million sq. In 2008. indicating signifcant growth potential for this sector in the Indian market. which together account for about 35 per cent of global production India.5% of global production.. respectively.200 million square metres.mt. accounting for more than 50 per cent of both. Mexico. The main sanitaryware producing countries in the world are China. in 2008.3 per cent of global production. Ceramic tile production has been increasing at a cumulative rate of close to 6 per cent. China is the leading country in the production of ceramic tiles with a share of 33 per cent at a total production of 2. Penetration of sanitaryware in India-about 30 per cent. India ranks at 5th position with production of 270 million sq. is much lower than even neighbouring Asian countries.mt. Latin America and European Union (EU). which is around 2. as well as consumption.China was the largest producer with a total production of 2200 million sq. The Indian sanitaryware market has been growing at about 10 per cent a year. Brazil and Spain. namely. followed by Spain and Italy.There are three major regions in the world.mt. In terms of consumption the pattern remains similar. Italy. that produce and export ceramic tiles in bulk.mt. World production of ceramic tiles was 7565 million sq. Asia. The ratio between consumption and production has been stable at around 94 per cent. with Asia accounting for 51 per cent.7 million pieces. with a size of 6.mt. as compared to the global average growth of about 7 per cent. Asia is the most signifcant region by production. they had jointly produced more than 87% of the global output.

replacing the conventional floor and wall tiles segment.7 percent in terms of ceramic tile production.mtr per annum.15 sq. These tiles are light and have the added advantage of being offered in designer looks as compared to mosaic tiles. It is expected that this segment will capture the bulk of the market gradually.INDIAN CERAMICS INDUSTRY Ceramic Tiles India’s ceramic tile industry emerged in the 1950s. Despite an overall slowdown of the economy this sector continues to grow at a healthy 12 percent per annum. Ceramic Tiles are furnishing material apart from being utility or hygiene products.7 percent to 2. It is as low as 0. Growth of the unorganized sector accounted for 44 percent of the total Production and the revenue earnings from the organized sector accounted to over Rs150 crore. The per capita consumption of ceramic tiles in India is very less as compared to the other countries in the world. Both organised and unorganised sectors play a key role in the manufacturing of ceramic tiles in India. which are heavier and more expensive to transport. The floor tiles segment is growing faster as compared to wall tiles. Vitrifed and porcelain tiles are recent entrants into the ceramic tile industry and have increased the size of the market considerably. Tiles form the most significant part of the Indian ceramics industry and consist of floor tiles (46 per cent). 8 . This low per capita consumption shows the likely demand that is going to arise in the future in India as more and more development takes place. vitrified and porcelain tiles (12 per cent) and wall tiles (42 per cent). India ranks 7th in terms of production in the world and the market share of India have risen from 1.

15 square metres per Annum. It Comprises of wall tiles. floor tiles and vitrified tiles. 9 . which is quite low as compared to developed countries. The per capita Consumption of ceramic tiles in India is just 0.35 billion.MARKET SIZE OF THE INDIAN CERAMIC INDUSTRY The Indian ceramic tile industry is estimated at US$ 0.

which. Spartek and Murudeshwar Ceramics. The organised sector is characterised by the existence of a few large players. Ceramic tiles are produced by organised. Johnson. the demand has grown nearly two and a half times in the same period. has matched the installed capacity. such as H.The industry has been experiencing increased demand.OCIL and Nitco. from 97 Million tonnes to 207 million tonnes. Kajaria Ceramics. While capacity has also increased significantly. The share of production of organised players is around 55 per cent. ORGANISED PLAYERS 10 . as well as unorganised players. in recent years. from 120 million tonnes in 2004. & R. SPL. Bell Ceramics. to 215 million tonnes in 2008.

Ltd. RAK Ceramics India Pvt. Euro Ceramics Pvt. Nitco Tiles Pvt. SPL Ltd. Ltd. Johnson (India) Ltd. Orient Ceramics And Industries Ltd.Some of the major players of Indian ceramics industry are- o o o o o o o o Asian Granito (India) Ltd. H. PRESENT MARKET SHARE OF TILE PRODUCER COMPANIES IN NORTHERN INDIA 11 . Kajaria Ceramics Ltd. & R.Ltd.

4 Million sq. per annum which has now grown to 14 million sq. Mahendra K. Orient was incorporated as a Public Limited Company on 18th May 1977 for the manufacture of ceramic tiles with an installed capacity of 0. Orient’s state of the art manufacturing unit at Sikandrabad (Bulandshar. ISO 10545-1/17 & ISO 13006 specifications. Daga currently heads Orient Ceramics as Chairman & Managing Director with the credo of delivering products of sustained excellence and superior quality. Middle East and the SAARC countries. OCIL has been scaling new heights and has evinced a steady growth rate.A Brief Description of Major Players Orient Ceramics Industries Ltd. mtrs.) is spread across 40 acres of land and conforms to the IS 13753-56:1993 of BIS. mtrs. Since inception. South East Asia. The operative keywords are: • Quality 12 .P. OCIL’s commitment to excellence and quality has earned it a wide and diverse customer base. per annum. Orient has also been accredited with the ISO 9001:2000 certification for quality control management. U. Headquartered at New Delhi. Mr. which spreads across Europe. This shall be accomplished through a strong network of over 800 dealers and 2500 sub-dealers spread all over the country. It plans to diversify into importing and distributing other building material products.

19 offices-cum-display centres and 7. Mantri Group. among others. where we provide wall tiles of white body similar to European tiles. Asian Tiles possesses the strength of over 3000 business associates spread across the nation. Mtr. H & R JOHNSONS: 13 . floor. Spanish and Italian tiles). It is the most prominent Indian ceramic tile brand with a favourable recall. vitrified. The largest exporter of ceramic tiles in India. It possesses an annual installed capacity of 21 MSM across two facilities at Sikandrabad. Mtr. Raheja Developers. Gujarat. through a network of 18 depots with display centres & ultra modern plant in the ceramic zone of Sabarkantha..000 Sq. spread over an area of 2. With humble beginning in the field of floor tiles. Omaxe and EMAAR-MGF. DSK. KAJARIA TILES: It is the largest ceramic floor and wall tile manufacturer in the second most populous country in the world. It commenced operation in 1988 in Sikandrabad. Magarpatta. Ashok Kajaria and Kajaria Export Limited (Group Company) in technical collaboration with Todagres. It has brandenhancing customers like Unitech. Asian has become India's leading wall tile manufacturer in large format size. today Asian tiles have blazed a trail in the tile industry. to add brightness and depth to the glaze. It has been equipped with eight stock points. It is promoted by Mr. experience & dynamism… With starting a quest for excellence a decade ago. ASIAN TILES: This company is the result of the dreams of three entrepreneurs. OCIL is not just a tiles manufacturer but a company devoted to offer 'extraordinary wall and floor solutions' to create and enliven exclusive designer homes and offices. it 'creates tiles with a distinct persona'. with the biggest size of 300 X 900 mm. Supported by vast man power along with mind power. It has unmatched product offering (wall. S.Prestige Group. Per day of tile. Ansals. covering almost each of the aspects of the industry. (Uttar Pradesh) with an annual capacity of 1 MSM of floor tiles.• • Durability Aesthetic Appeal Thus. and production capacity of two plants is 32300 Sq. today it has expanded till the horizon. Asian is all set to reach the goal of supplying world class product. Spain. with the promise of extremely accurate size control. eight Kajaria World showrooms.000+ dealers and sub-dealers on a pan-India basis. (Uttar Pradesh) and Gailpur (Rajasthan). materialized with the grassroots of passion.A. Hiranandani. DLF. Sobha Developers. Parsvnath. 30.

S. U. An avant-garde at the core.H. Kumar Shah : Mr Paresh Shah Current Business Profile: Vitrified Ceramic Tiles : 79. No wonder. Nitco has gone to become the most preferred name and the ideal choice of millions of house-holds and the real estate fraternity. Porselano. : 1800 MTPA Aluminium Extruded Sections Calcareous Tiles : Sanitary ware : 45. pioneering endeavours and premium products in the construction industry for over five decades. Manufacturing facilities NITCO TILES: A foundation laid on innovation. Wall. Applied Consumer Florida. with its rich repertoire in offering unique Floor Tiles. Wall Tiles and Marble. Since 1953. the company is renowned and revered for its revolutionary concepts. Marbonite. The company also has diversified interests in sanitary ware and bathroom accessories. Endura & Milano) the company provides the most innovative products of international standards that is coupled with the best of pre and after sales service.A. Johnson (India) Limited is India's No. Floor. & R. Nenshi Shah: Mr. Talakshi Nandu : Mr. 1 tile company offering a wide range of wall and floor tile products across various segments v. VJTI. Exterior and Industrial.i. With a vast portfolio comprising of 5 well-known brands in India (Johnson. Mosaico. Promoters: Mr.971 MTPA. Vitrified.000 MTPA Trading in Wall Tiles through a 100% subsidiary Technology: SACMI (For Vitrified Tiles & Sanitary ware) Quality focus: Vitrified Tiles : ISO 13006.Going beyond the ordinary and leading by example is a common tradition practised at Nitco. EURO CERAMICS: Part of “Euro Group” Integral part of the Decorative industry in India.z.000 MTPA 11. the 14 . Mumbai : ISO 9001:2000 certified Services Inc.Today.

got patent for VC technology-a first ever in Indian Ceramics industry and incorporation of HL Somany group. Ludhiana and Mumbai. ventured in retailing in 2007. A large network of Somany display centers are also spread across the country. Since then Somany has reached and surpassed many milestones – setting-up of second unit in 1981. for instance. ceramic. and will always strive to be a dynamic leader in its field. Engineered Marble. Their commitment to excel in every sphere and to fuel growth in the core as well as new sectors has truly created a powerful vitality within the company. to the constant endeavor to be the first to introduce new products in India. in 1999. joint venture with Keraben under brand name “Synergy”. the company is heading towards an exciting phase of expansion and growth. Imported Marble. Haryana. These showrooms cater to high-end customers and offer imported tiles as well as exclusive Aquaware brand sanitary ware. Pune and Indore. SOMANY TILES: In the Indian tiles sector. Somany prides itself in being at the very forefront of style and quality. ceramic and marble. Winning 13 Capexil awards for innovation and design is the perfect testament to all of its achievements. A wide cutting-edge array of designs and material make up the inspiring Somany range of tiles. The dynamic leadership team in Somany not only spans three generations of able leaders. With Shri H L Somany at the helm as Founder. porcelain and innovative tiles that are the very latest in the world. buyout of all equity shares by Somany's Indian promoters in 1994. and is today a trail-blazer that others follow. Many other retail showrooms are about to be opened in leading centres. Somany prides itself in the sheer variety of design and finish. and constantly looks to bring new 15 . In 1971 the very first unit of Somany started production in Kassar. Somany strives to bring its customers floor. it also brings together their staggering breadth of experience and wisdom. This core leadership team along with a large team of highly dedicated and talented people is continuously working towards creating more value for all stakeholders. Vitrified Tiles. Somany Global flagship retail showrooms are currently located in Delhi. From raw material imported from Italy and Spain. It was the power of a dream and the zeal to excel.artistic creations in mosaic rendered in stone. both in mind and spirit. Shri Shreekant Somany as the CMD and Shri Abhishek Somany as the JMD. sanitary ware or porcelain floor tiles. Ceramic Tiles. that drove Shri H L Somany to forge a path of unparalleled success for this company. Intarsiasplendours of inlay marble and Mosaico. Gurgaon. getting ISO 9002 certification in 1998. Pavers. It began as a vision of things to come. Whether ceramic glazed tiles.company has continued to pioneer ground breaking innovations in all its offerings. achieving ISO 14001 for environment friendly facilities. wall. vitrified. achieving Government recognition for its R&D Department in 1996 (a first in the tiles industry). Somany has achieved a clear leadership position by wholeheartedly adopting forward thinking and an innovative and futuristic approach. which later became Somany Ceramics Ltd. Somany has been. vitrified tiles. In 1969 Shri H L Somany incorporated a company called Somany Pilkington's.

In the endeavor to bring the very best to customers. these tiles retain the original glaze and finish for years. This has borne fruit in the form of Somany's achievement of establishing the very first Government Recognized In-house Research & Development Centre. No wonder then. are the world's most durable floor tiles. Somany has already made major in-roads into this market. that these tiles comprehensively outperform ordinary ceramic tiles including PEI grade 5 tiles. it has helped Somany to set new industry benchmarks in quality and production standards for ceramic tiles. 'Veilcraft technology'. Uttar Pradesh. Somany has also brought in some ground-breaking technologies into the Indian market. Venturing into the burgeoning sanitary ware sector. using a serigraphic decorating system that employs silicon cylinders. we source our raw material from as far as Italy. Created using the breakthrough. A commitment to bring to life new ideas and design innovations is driven by the huge amounts of funds invested in research and development. This cutting-edge material transportation system has automated the movement of ceramic materials in the production system. All of this is a result of Somany's commitment to bring the best and the latest to its valued stakeholders and customers in India. It has always focused on acquiring and leveraging the latest technologies and know-how. The futuristic patented VC Shield range of tiles from Somany. Another exceptional technological advantage has been achieved with Somany's new Laser Guided Vehicle system. and China besides Rajasthan. This integrated system that optimizes decoration of tiles enables any kind of random design and also a marble effect. Their highly advanced Rotocolour Machine has the capacity to decorate ceramic tiles with glazes.and trend-setting ideas into the tile industry. concept and technology. scratches and stains. A truly trend-setting achievement. Madhya Pradesh and other major centers in the country. that creates a special layer on the tiles that keep them free from abrasion. thereby minimizing rejection of in-process materials during the production of tiles. The Laser Guided Vehicle facilitates optimal and accurate handling. 16 . Somany has a production capacity of 15.7 million sq mt per annum from its Haryana and Gujarat units. Spain. Somany is focusing on creating a niche for itself in this sector. With its range of high quality products and offerings under the brand name of Aquaware. by bringing in and adopting the latest in design.

. 4. 6% Domestic15% Organized industry turnover (India): Rs 3000 crores Glazed Wall Tile share: Glazed Floor Tile share: Unglazed share: Vitrified Tile 40% 46% 8% Glazed Porcelain Tile Share: 6% Unorganised Industry Turnover Glazed Wall Tile share: Glazed Floor Tile share: Unglazed share: Vitrified Tile Rs 3500 crores 57% 35% 6% Glazed Porcelain Tile Share: 2% 8. Investments in last 5 years: Organized sector: Share of Production: No.mt. Unorganized sector: Share of Production: 17 44% .INDUSTRY STATISTICS: 1. 3. 340 Million sq. 5. 6.30 sq. 5 0. 7.mt. World production: India's Share: World ranking (in production): Per capita consumption: Global Industry Growth Rate: Growth Market): Rate (India 6900 Million sq. 2. 9.mt. of units: Revenue (excise duty): 56% 16 Rs 300 crores Rs 2000 crores 10.

. Rising imports indicate the rapid growth in domestic demand for tiles. The other main exports of ceramic products consist of chemical porcelain and insulators.000 direct 500.000 indirect Export & Import Scenario Apart from domestic demand.5 million in 2006-07. to almost match the level of exports. exports of ceramic tiles from India have gone up to US$ 58. exports of ceramic tiles from India have also been increasing. at a CAGR of 46 per cent. Imports of tiles have gone up rapidly in recent years. Africa and West Europe.No. Job Potential: 200 (approx. From around US$ 8. India exports tiles to other parts of Asia. handicraft artware and stoneware crockery. of units: Revenue (excise duty): 11. due to boom in real estate construction. at a CAGR of 12 per cent. CHAPTER-III Research Methodology Title: 18 .3 million in 2001-02.3 million in 2001-02. From a level of US$ 33.) (70% based in Gujarat region) Rs 350 crores per annum or less 50. imports have gone up to nearly US$ 55 million in 2006-07.

Significance for the researcher: To have a firsthand research experience about tiles industry. brand awareness. In depth study on the dealer network of various tiles manufacturers. price analysis and above all customer experience about the various tile products and categories. Various primary and secondary data sources would help in shaping a good notion about the industry trends and its future prospects. 25 dealers & 150 customers. brand equity. Also the views of the architects and dealers would help in determining the future strategies of the companies and add to the betterment of end user requirement.To determine the perception about various tile’s quality. Also recommending measures to improve the present scenario of a company would boost up the confidence of the researcher. This data can be explorated to take in the trends across the industry. Objective: • • • To determine the awareness level of different major tile players among the architects. Research Design: Type of Research: Exploratory and descriptive experimental research 19 . Significance of the study: Significance for the industry: This is a limited study which takes into consideration the responses of 20 architect’s. Title Justification: Title is self-explanatory. It is a rapidly changing and evolving sector. To determine the customer awareness level. The significance for the industry lies in studying these trends that emerge from the study. The study mainly deals with the quality. particularly for new users of tiles. A study like this can attempt to guide the future of the industry based on current trends. price and customer service.

Brand Awareness Analysis: BRAND AWARENESS RATING MEAN RATING 20 . A well-structured questionnaire was prepared and personal interviews were conducted to come to the conclusion.Size of sample: 20 Architect. Area of study: Ghaziabad and Meerut City Sampling procedure: Convenience Sampling Method: The research is primarily both exploratory as well as descriptive in nature. The sources of information are both primary & secondary. 25 dealers and 150 customers.

Ltd. Kajaria Tiles is on the top followed by Somany tiles. Quality Analysis: Quality Rating Quality Mean 21 . H.R..Johnson’s Pvt.INTERPRETATION: According to the architect’s brand awareness. Orient tiles and Nitco Tiles.

quality wise Kajaria Tiles is leading the market followed by H. Dealer’s Network: Dealer’s Network Rating Dealer’s Network’s Mean 22 . Orient Tiles and Nitco Tiles.R.Johnson Pvt. Somany Tiles.INTERPRETATION: According to the Architect’s. Ltd..

Kajaria ceramics has the widest dealer’s network in the sample area followed by Orient Tiles. Ltd. H. and Nitco Tiles. Somany Tiles.INTERPRETATION: According to Architect’s view. Overall Architect’s Choice: INTERPRETATION: 23 .Johnson Pvt.R.

6. The parameters are as follows: 1.Overall view of the Architect’s leads to this fact that the surveyed region is mostly favoured by Kajaria Tiles Pvt.. Orient Tiles Pvt. Customer Experience Study: A total number of 100 customers (new user) being interviewed at various locations of Ghaziabad and being asked to rate the above mentioned tile brands in terms of their awareness and choice and usage. Ltd. 4. 5. 2.. Ltd. followed by Somany Tiles Pvt. Ltd. Price Durability and quality Awareness Response pace Availability Variety Overall Customer Rating Overall Customer Experience Mean 24 . And Nitco Tiles in the branded and organised ceramic tiles segment. 3.

Somany Tiles and Nitco Tiles.Johnson Ltd. Dealer’s Experience Study: A total number of 25 dealer’s of various tiles manufactures had been interviewed in Ghaziabad and Meerut Region on the basis of following parameters: • • • • • • • • • • • Brand availability in the store Frequency of the inventory Timely delivery Special/urgent supply Supply time Representative relation Cash/dealer’s discount Frequency of taking dealer’s advice Customer’s prerequisite specification needs.. Kajaria tiles is ahead in terms of customer rating followed by Orient Tiles. if any Variety in quality and size of the tiles Dealer’s ranking 25 . H.R.Interpretation: The above mentioned graph shows a very tough competition among all the major organised players.

Overall Dealer’s Experience Rating Overall Dealer’s Experience Mean Interpretation: In terms of dealer’s study.R.Johnson Ltd. 26 . Kajaria Tiles is the most sought after brand followed by Somany Tiles. H. And Nitco Tiles.Orient Tiles.

• The findings of the survey are based on the subjective opinion of the respondents and there is no way of assessing truth of the statements. • The research is confined to a certain parts of Ghaziabad and Meerut and does not necessarily shows a pattern applicable to all of Country.  Misunderstanding of the concept. • Some respondents were reluctant to divulge personal information which can affect the validity of all responses. • some amount of error exists in the data filling process because of the following reasons:  Influence of others. The environmental changes are vital to be considered in order to assimilate the findings. • In a rapidly changing industry.  Hurried filling of the questionnaire.Limitations of the Study: • The sample size is very less. Chapter – IV 27 . analysis on one day or in one segment can change very quickly. hence it does not imply for the complete population. • There was lack of time and resources that prevented from carrying out an in depth study. • There is some respondent’s bias which cannot be removed.

Mahendra K. per annum which has now grown to 14 million sq. the latest technology is employed to manufacture products that adhere to international quality standards. we 'create tiles with a distinct persona'. per annum. we constantly endeavour to provide customers with the finest ceramic floor and wall tiles. Our clientele extends beyond house builders. Orient was incorporated as a Public Limited Company on 18th May 1977 for the manufacture of ceramic tiles with an installed capacity of 0. This endeavour is accomplished using a state-of-the-art environment friendly manufacturing unit at Sikandrabad. We plan to diversify into importing and distributing other building material products. Here. Such commitment to quality and product innovation has earned us a wide and diverse customer base. The operative keywords are: • • • Quality Durability Aesthetic Appeal Thus. mtrs. This shall be accomplished through a strong network of over 800 dealers and 2500 sub-dealers spread all over the country. Middle East and the SAARC countries. In line with the company's credo of sustained excellence and superior quality. (OCIL) spearheaded by Mr. The patterns used ensure that the tiles crafted provide both aesthetic appeal and durable functionality.Daga.4 Million sq. History of OCIL: Headquartered at New Delhi. mtrs. has earned a reputation of being the frontrunner in innovation in home décor. architects. through our exhaustive product range.ORIENT TILES . UP. 28 . We are not just a tiles manufacturer but a company devoted to offer 'extraordinary wall and floor solutions' to create and enliven exclusive designer homes and offices. and institutions in India to Europe. innovative designs & sophisticated colours. South East Asia.

5 29 . distribution and logistics costs form a substantial portion of the total costs and the success of the distribution chain – marked by delivery promptness. Indian economy is poised to grow at 7-8 percent and with growing incomes and urbanization. demand for houses is slated for growth. This would further increase the demand for tiles. following the realty growth in the housing. The low per capita consumption projects a rising demand for ceramic tiles in India as they are used for aesthetic. THE WORLD OF ORIENT Tiles Range: Interior Range Floor Tiles 29.) is spread across 40 acres of land and conforms to the IS 13753-56:1993 of BIS.Mr. retail. the demand for housing would also increase in rural areas. OCIL has been scaling new heights and has evinced a steady growth rate. besides utility and hygiene reasons. Our commitment to excellence and quality has earned us a wide and diverse customer base. South East Asia. With the availability of loans at low interest rate and tax incentives have enabled the people to buy houses and build up their own establishment. Daga currently heads Orient Ceramics as Chairman & Managing Director with the credo of delivering products of sustained excellence and superior quality. Owing to the delicate nature of the product. Market Potential of OCIL The industry’s potential appears attractive.P. the industry players have expanded their distribution networks significantly. The ceramic industry will also benefit from the above developments.5*39.5*29. Our state of the art manufacturing unit at Sikandrabad (Bulandshar. Middle East and the SAARC countries. Increasing demand is just one part of the story the availability of Finance is the other part. ISO 105451/17 & ISO 13006 specifications. The increasing focus on rural areas. by government and corporate. To capitalise on the latent demand. We have also been accredited with the ISO 9001:2000 certification for quality control management. With the increasing competition amongst both Banks and Housing Finance Companies the people are avail of getting better financing options and that too at a cheaper rate. well-equipped dealer stocks and wide market reach – is critical to the success of retail sales. U. IT and BPO sectors. which spreads across Europe. Mahendra K.5 30*30 39. Since inception.

8*14.8 20*20 20*30 20*40 29.) 14.5*59.) 14.40*40 49.5 60*60 60.8*14.) 30*30 39.5*39.5 40*40 Wall Tiles (in cm.5 60*60 60.5*60.5*60.5 Exterior Range Floor Tiles (in cm.8 20*40 Price Analysis 30 .5*49.5 Wall Tiles (in cm.

Financial Overview of OCIL 31 .22/sqft and in vitrified it is Rs.The price of ceramic tiles depends on the various size and measurements of the tiles.35/sqft. for kitchen and for toilet people used to install ceramic tiles of 16’ X 16’ and 12’ X 12’. somehow we have managed to extract some of the tiles prices of various players. Now . in wall tiles segment. the mostly used vitrified tile size for living room is 2’ X 2’.21/sqft. the general market price in Ghaziabad starts from Rs. For dining they used to stick with vitrified tiles of 2’ X 2’ size.in floor it is Rs. Although we have noticed that tile dealers are not ready to give price details fairly.

32 .

33 .

Profitability ratios 34 .FINANCIAL ANALYSIS AND RECOMMENDATIONS After the analysis of profit & loss account and balance sheet of orient ceramics we have got some financial analysis about the company and tried to give our recommendations according to it. We went for ratio analysis to find the actual financial condition of the company. 1. Liquidity ratios 2.

3. We will not consider prepaid expenses and stocks in liquid assets.It is an indicator of the firm’s commitment to meet its short term liabilities.to 942762466 rs. CURRENT RATIO. In balance sheet of 31-03-2008 and 31-03-2007 we can also observe that long term liabilities has grown up by 599525935 rs.(acid test ratio or quick ratio) This ratio is the indicator of the short term solvency of the company. LIQUIDITY RATIO.5-2 so company should decrease it some points as it is showing less efficient use of funds.An ideal current ratio is 2.current assets/current liabilities From balance sheet=inventories+sundry debtors+cash+bank Balances+short term loans & advances/ Current liabilities +provision =423999406+404470339+6962801+149639658/ 411841400+23653137 =2.in 2008 by 57% increased. This is due to because of high dependence on long term sources of raising funds. Investors interests ratios 1. 2.liquid asset/current liabilities = 985072204-423999406/435494357 35 . Long term liabilities are costlier than current liabilities therefore this will result in considerably lowering down the profitability of the company. Liquidity ratio.26 RECOMMENDATIONS.this is just above 2 but a company should maintain ratio between 1. It shows the comparison of inventory holds up. It is expressed as follows.

DEBT EQUITY RATIO. =long term debt/equity =942762446/479817704 =2:1 So it can be said as satisfactory that company has 2/3 part debt and 1/3 part as equity.28 Recommendation-satisfactory ratio should be 1.no one can dare to run a investment in just 3% which is below than to the interest of bank’s saving account. b.92%(in2007-08) And comparison with 2006-07 =173837365/1122303254=15%(2006-07) In 2008 the ROI was very less and will called as totally unsatisfactory as your operating cost is higher than to return.= 1.so it is just above 1 so company needs to reduce its inventory level as it blocks cash of the company.RETURN ON INVESTMENT/RETURN ON CAPITAL EMPLOYEDIT INDICATES THE PERCENTAGE OF RETURN ON THE TOTAL CAPITAL EMPLOYED IN THE BUSINESS. High operating cost due to high inflation. 36 .the debt-equity ratio is determined to ascertain the soundness of the long term financial policies of the company. 4. =operating profit/capital employed =43685580/14939220722=2. Company gave some reasons behind thisa. 3. The maximum projects that company undertook were in bulk discounted so they increased the sales revenue but could not increase profit margin.

GROSS PROFIT RATIO-this ratio is the relationship between gross profit and net sales. High competition from local players. There may be decrease in the selling price of the goods sold without corresponding decrease in the cost pf goods sold.bonds . 6.debentures so investors will go away. Recommendation-company needs to decrease its operating cost such as inventory cost.45%(poor) Suggested reasonsa.50/2. b.46 37 . manufacturing costs because this year they were having higher percentage in operating costs. The cost of goods sold has grown up without corresponding increase in the selling price of goods. 5. We found out from the company sources that due to bulk discounted orders in 2007-08 which were got by dealing high competition resulted decrease in selling prices without decreasing in the cost of goods. =gross profit/net sales =net sales-cost of goods sold/net sales =2145679729-(199560672+1829127984)/2145679729 =5. 7DIVIDEND PAYOUT RATIO=DIVIDEND PER SHARE/EARNING PER share =.1%(2008) In compare to 2007-25% So the return has been decreased by 80%.and it could not be said as satisfactory as 8-10% is easily available through in fixed deposits.c.RETURN ON EQUITY SHARE HOLDERS FUND=PROFIT AFTER TAX/EQUITY SHARE HOLDERS FUND =24873117/479817704 =5.

46(F. 9.05/EPS=16.67% On this ratio investors will not go for investing in company as they will get high yield in other investments so company should consider shareholders benefits or try to increase dividend yield.=20% 8.3(F.V.50*100/30 =1.15(F.79(F.=10) P/E RATIO COMPARISONEURO<KAJARIA<ORIENT<BELL This suggests that orient and bell are less par performing than to the euro and kajaria. DIVIDEND YIELD RATIO=DIVIDEND PER SHARE/MARKET PRICE PER SHARE =.so we can say that the capital of shareholders is not being effectively used.90/EPS=. 10.=2)115% Orient=2.=10) 160% KAJARIA=2.9=29.THE EPS HELPS IN DETERMINING THE MARKET PRICE OF THE EQUITY SHARE OF THE COMPANY.V.=10)24.V. =PROFIT AFTER TAX/NO OF SHARES COMPARISON – Euro ceramics=16(F.=10) ORIENT=16.EARNING PER SHARE.6% So in comparison with other company orient has got less EPS.=10) KAJARIA-24.9=30/EPS=1. PRICE EARNING RATIO=MARKET PRICE PER SHARE/EARNING PER SHARE EURO-2.=2) BELL-46=6. 38 .V.V. so they are over valued than to the kajaria and euro.25/EPS=1.17(F.V.V.5=40.02(F.

3 million in 2005-06.000 grew from a mere 0. and are expected to rise to 75. 10. Interestingly.448 by 2010. families whose annual income is above Rs.3 million in 2001-02 to 53. while the urban population will maintain a 2.Families with Rs. Annual household incomes between Rs.27% growth till 2010. 24.679. 2008 Sales 2. the overall population will grow at 1.00. 31.3 million dwelling units in urban India by 2015 (Source: Housing Skyline of India 2007-08). thanks to two important realities: rising incomes and growing urbanisation.7 million in 2005-06.4 million in 2005-06.Demand drivers: The demand for value-added tiles (large-format) outpaced that of the plainer variants. Employees: 750 39 . 2. 2. higher than the overall population growth of 2. a majority of this affluent class will stay in cities and create an income pool comparable with the major US cities by 2015 (Source: India Infoline). Increasing urban demand: The urban population (28% of the total Indian population) grew 2. catalysing housing demand.8 million by 2010.000 increased from 41.672 in 2003-04 to Rs. 90. and is expected to reach 28. and is expected to be 3. leading to a robust housing demand of over 24.8 million in 2001-02 to 1.000 and Rs.77%. urban population is expected to touch 590 million by 2030 [Source:IBEF].00. 10. Going forward. and is estimated at Rs.5%. As a result.729 (Year Ending Jan 2009).3 million by 2010.145.01. Growing affluence: The average Indian’s per capita income increased from Rs.321 in 2007-08.7 million in 2001-02 to 16.000 to Rs.5 million by 2010. More surprisingly.00.3%.000 annual income grew from 10. 11.

e. Introduction of two new categories-i. 40 .. Product  There is a wide range of designs and sizes to choose from. Vitrified and Concept tiles.SWOT ANALYSIS: Distribution System: Ceramic Marketing: The 4Ps of ceramic marketing are like different levers that can be used in different degrees to achieve the same objective.

the company should organize more interactions with architects. Also they will look after the external packing material which creates an eye on look-and-feel. It may introduce a specific dedicated team to look after the overall brand equity. May introduce three dimensional catalogue visual experiences to its customers and also give customer a chance to design product in their own way of choice (customized design specification). Due to capacity expansion supply is increased so price is lowered down by 35%. • • • • • BRAND: • • More focus on packaging and product merchandising. It would also accelerate the sales. It may include company owned showrooms. As example. Distribution network should be clearly segregated towards specific product segments. Moreover price war from china has also lowered down prices. This would serve a dual purpose: it would enable the company to acquire an insight into evolving preferences of some of the most prominent and trend. They will ensure that all showrooms and dealer display centres were in sync with the Orient profile. Place  Wide distribution network in and outside state. More introduction of matching wall and floor tiles. on the other hand. To grow its institutional business. More focus on Research and design-development activities to achieve the cost and product design leadership. franchises. Products delivered within feasible timeline of order. developers and government agencies at its dealer outlets. CHAPTER-V RECOMMENDATIONS: MARKETING: • Should adopt the widest distribution network model to deliver products to the end user in quickest and most effective way. Taking part in international exhibitions is routine. Promotion  Advertising is done in leading Construction magazines and interior design journals. 41 • . Setting up exclusive showrooms for special products instead of keeping with with the regular range. resulting in a holistic branding approach. the upcoming product ORVIT-a product in high glaze tiles segment should have an exclusive place to showcase. it helped the company cater to their evolving preferences.Price  The price range is very vast.influencing architects. multi-product dealers and sub-dealers. It would add to the exclusive ambience of the product.

After the imposition of anti dumping duty on Vitrified tile. I would like to produce some of the evidences aligning with this and with this I would like to conclude my project• A report. The low per-capita consumption of ceramic tiles in India. published in June 2008. m per person in countries. The instability in the fuel prices due to continuous increase in energy prices in the international market has significantly put pressure on margins. best HR practices are in place to retain the talent and reduce the attrition. Due to withdrawal of certain export concession by China and the general increase in freight has increased the landing cost of certain raw materials. stated that the growth in demand for ceramic products has been further strengthened by the boom in the Indian real estate sector. Brazil and China. 2.0 sq. which is currently around 0. dumping is taking place in glazed wall and floor tiles which has put pressure on the domestic tile manufacturers. which is 25-30 42 • • . Conclusion: The prospect and the future of ceramic tiles lies not only in northern region but it spread across the country. The growth in the hospitality industry and the advent of new malls. To retain skilled professionals is also a cause for concern. only a few of the Chinese companies who were exempted from anti dumping duty are supplying to companies in India. However. 4. like Malaysia. finance costs may be adversely affected in the coming year. offers huge growth potential. The amount of anti dumping duty was significantly reduced in April 08 by the Govt. The industry can reap the benefit of its low cost of production.5 sq. commercial complexes and multiplexes also lend support to the growth prospects of this industry. Therefore. for the last few years. 5. 3. it is still prohibitive enough. m per person as compared to 2. Due to high inflation and tightening of credit by RBI. However.Risks and Concerns: Some of the key risks affecting the Company are explained below: 1. which is registering 30 per cent growth per annum.

web-articles and catalogues For primary data- • • Questionnaire Supervisor’s advice and information 43 . primarily owing to labour costs. References: For secondary data• • • • • www. Production of ceramics through conversion from coal-fired to gas/oil fired. • Reduction in threshold limit under Zero Duty Export Promotion Capital Goods (EPCG) Scheme would also help accelerate the modernisation process in ceramics industry.com Company websites Annual reports Previous summer training projects Magazines.furnaces is likely to enhance fuel efficiency and reduce cost as well as ensure better quality and reduction of environmental pollution.icctas.per cent lower compared to the US and Europe.

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