III SEMESTER 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)

CONTENTS
Name of the topic
1.

Page No.

Profile

1-15

2. Data

16- 23

3. Tools Of Analysis

24-25

4.

26-34

Analysis

5. SWOT Analysis

35

6. Observations

36

7. Conclusion

37

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-theart ceramic goods are being manufactured in the country and the technology adopted by
the Indian ceramic Industry is of international standard. The word "Ceramic" has
originated 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.

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 consider
yourself 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.

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
5

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.

GROWTH TRENDS:
Indian ceramics industry provides employment to 550,000 people, of whom 50,000 are
directly 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 square
metres 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.

 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.

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.

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 uses helical vanes, and an intensive mixer
uses rapidly revolving plows. This step further grinds the ingredients, resulting in a finer
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-ingredient
batch as well as to achieve fine grinding. This process is called wet milling and is often
performed using a ball mill. The resulting water-filled mixture is called a slurry or slip.
The water is then removed from the slurry by filter pressing (which removes 40-50
percent of the moisture), followed by dry milling.

10

Spray drying

If wet milling is first used, the excess water is usually removed via spray drying.
This involves pumping the slurry to an atomizer consisting of a rapidly rotating
disk or nozzle. 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 organic binder or a low percentage of moistureflows from a hopper
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
moldable form. Extrusion plus punching is used to produce irregularly shaped 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 pneumatic punching 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.

11

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 (called sludge) 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, impulse drying, uses pulses of hot
air flowing in the transverse direction 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,
12

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
desired porosity. 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 lowtemperature 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 called glost firing. Both firing processes take
place in a tunnel or continuous kiln, which consists of a chamber through which
the ware is slowly moved on a conveyor on refractory battsshelves built of
materials that are resistant to high temperaturesor in containers called saggers.
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
conveyor and 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.

13

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.

14

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, ceramicpolymercomposites,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
conductors

and

electronic

applications

crystals,diodes,electrical

includeantennas,dielectric

porcelain

insulators,ferrits

capacitors,
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, super
conductors,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 groups net turnover

has seen a steady increase over the years. glass a accounted for the majority of sales,
followed by adrasives,ceramics&plastics and reinforcement.

15

DATA
Income details
Ceramic Tiles
Rs. Crore (Non-Annualised)
Total income
Sales

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

2203.35

2589.05

3138.64

3774.3

4854.56

5493.02

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

1.82

2.24

2.9

Sale of raw materials

0.03

0.06

0.89

3.47

Job-work income

0.47

1.16

1.9

3.17

6.59

14.14

After sales service income

Construction income

25.63

Sale of electricity & gas

0.25

4.88

5.57

8.71

4.55

2.27

4.62

4.03

5.47

77.6

106.96

327.77

691.66

1148.85

1507.75

75.91

98.51

322.9

687.74

1147.01

1505.65

15.14

18.6

9.64

12.65

23.82

43.34

12.38

11.18

8.78

8.09

14.32

22.58

7.8

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

2.76

7.42

0.86

4.56

9.5

20.76

Fiscal benefits
Income from non-financial services
Trading income
Income from financial services
Fee based financial services income
Fund based financial services income
Interest income

Income from treasury operations

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

1.27

3.21

Profit on current investments

3.77

0.04

0.92

Income from other treasury operations

0.27

0.31

0.32

0.05

Gain relating to forex transactions

1.98

5.97

0.18

0.32

5.85

13.24

6.4

6.26

7.85

10.1

13.04

14.41

74.09

53.45

35.79

13.91

15.61

16

72.67

49.69

33.85

10.56

6.22

14.13

0.17

36.32

11.57

1.39

1.26

2.72

0.01

0.17

36.32

11.56

1.39

1.26

2.72

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

1.42

3.76

1.94

3.35

9.39

1.87

0.55

3.54

1.12

1.23

8.46

1.36

0.4

0.22

0.82

1.96

0.93

0.51

Contra entry for depreciation added

Gain on change in accounting policies

5.36

57.87

125.87

100.25

189.71

96.27

33

35

36

35

35

29

Other income
Prior period & extra-ordinary income
Prior period income
Cash prior period income
Bad debts recovered
Residual and combined cash prior period income
Non-cash prior period income

Extra-ordinary income
Profit on sale of fixed assets
Insurance claims

Change in stock

No of companies

16

Expenses details
Ceramic Tiles
Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

2114.81

2516.18

3130.17

3757.38

4871.38

5376.62

550.62

638.09

891.57

898.53

1114.11

1148.29

460.86

526.65

771.76

772.51

968.92

978.45

89.76

111.44

119.81

126.02

145.19

169.84

40.73

70.91

75.09

103

123.15

129.72

Purchase of finished goods

69.37

168.55

374.99

616.41

982.67

1276.82

Power, fuel & water charges

346.87

439.67

478.11

576.01

682.4

734.53

Compensation to employees

156.26

191.2

217.38

247.48

328.44

391.22

Indirect taxes

252.7

214.88

219.86

279.44

345.85

371.76

Excise duty

228.18

187.47

189.18

226.98

269.7

291.85

1.43

0.28

0.27

0.59

0.54

0.5

Rent & lease rent

14.76

17.22

16.52

18.86

26.71

34.74

Repairs & maintenance

27.83

37.79

41.62

43.51

52.63

55.13
14.14

Rs. Crore (Non-Annualised)

Total expenses
Raw materials, stores & spares
Raw material expenses
Stores, spares, tools consumed
Packaging expenses

Royalties, technical know-how fees, etc.

Insurance premium

6.65

7.4

12.27

11.61

15.5

Outsourced manufacturing jobs

5.62

7.71

7.06

7.21

7.52

7.33

Outsourced professional jobs

4.27

6.7

8.23

7.26

11.15

11.28

Directors' fees

0.01

0.04

0.12

0.17

0.21

0.19

Advertising expenses

35.62

39.54

64.44

51.01

59.11

60.5

Marketing expenses

85.18

108.7

117.62

175.72

227.08

227.12

Distribution expenses

71.61

96.72

116.01

143.81

208.87

182.63

Travel expenses

20.76

25.7

29.2

28.91

38.41

45.96

Communication expenses

8.44

9.98

10.07

7.53

9.68

10.74

Printing & stationery expenses

1.54

1.97

1.88

1.95

2.7

2.84

24.23

27.48

33.04

54.06

70.83

80.19

0.79

7.22

6.05

9.84

10.47

5.85

Miscellaneous expenses
Other operational exp. of indl. Enterprises
Other operational exp. of non-fin. services enterprises
Fund based financial services expenses
Interest expenses
Financial charges on instruments
Other fund based financial services expenses
Fee based financial services expenses
Bill discounting charges

1.02

0.8

0.8

173.54

144.75

151.23

165.2

190.14

221.62

171.17

142.01

147.77

161.54

185.66

217.52

2.37

2.72

3.46

3.63

4.42

4.04

0.02

0.03

0.06

0.06

7.74

10.52

10.59

9.34

12.23

11.74

7.74

10.52

10.59

9.34

12.23

11.74

1.57

1.04

1.48

2.55

3.41

14.82

0.12

0.27

0.01

2.06

10.09

Loss on sale of long term investments

0.05

0.15

0.01

Loss on sale of current investments

2.05

10.09

1.57

0.92

1.21

2.54

1.35

4.73

15.12

4.44

4.67

4.95

4.72

3.5

9.19

4.22

4.48

4.95

4.36

3.27

Bank charges, guarantee fees, etc.

Treasury operations expenses
Loss on sale of investments

Loss relating to forex transactions

Loss on revaluation of investments
Total provisions
Provisions for bad/ doubtful advances, debts

17

Depreciation (net of transfer from reval. reserves)

137.51

151.42

165.39

185.2

214.88

226.22

Amortisation

6.17

6.13

4.13

3.93

5.41

3.89

Write-offs

7.68

5.96

7.68

6.97

3.42

5.47

Less: Expenses capitalized

9.67

1.31

0.68

0.63

1.12

0.99

0.25

0.38

12.16

12.03

5.67

10.19

13.72

5.62

8.71

8.74

3.81

5.16

2.97

1.86

0.71

4.42

2.34

2.79

2.93

0.79

0.71

4.2

0.37

2.35

2.5

0.52

0.22

1.97

0.44

0.43

0.27
1.07

Less: DRE & expenses charged to others

Prior period & extra-ordinary expenses
Prior period expenses
Cash prior period expenses
Prior period taxes
Residual and combined cash prior period expenses
Non cash prior period expenses

4.32

1.47

2.37

0.04

Prior period depreciation

7.28

0.13

0.99

Residual and combined non cash prior period expenses

0.72

4.19

0.48

2.37

0.04

1.07

3.45

3.29

1.86

5.03

10.75

3.76

Extra-ordinary expenses
Loss on impairment of assets
Loss on sale of assets
Loss on change in accounting policies

6.24

3.43

3.29

1.85

2.58

2.87

0.93

37.7

63.45

58.61

85.75

105.99

92.83

Corporate tax

14.3

28.17

29.24

50.98

66.63

74.54

Deferred tax

29.04

35.43

32.92

33.13

36.56

20.2

5.64

0.16

3.55

4.14

3.16

8.38

0.01

5.78

5.96

6.47

Provision for direct tax

Less: Deferred tax assets / credit

Other direct taxes
Fringe benefits tax

5.61

5.85

6.37

Profit /surplus after tax

93.9

130.74

134.34

117.17

172.89

212.67

Research & development expenses

1.28

0.73

1.35

1.12

2.07

2.49

Research & development expenses: Capital account

0.38

0.08

0.14

0.1

0.16

0.2

Research & development expenses: Current account

0.9

0.65

1.21

1.02

1.91

2.29

33

35

36

35

35

29

No of companies

18

Assets
Ceramic Tiles
Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

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

2109.82

2370.63

2629.51

2891.46

3323.02

3413.32

28.35

34.08

36.81

44.65

53.25

58.36

54.4

65.02

72.17

139.07

106.14

125.59

Rs. Crore (Non-Annualised)

Plant & machinery

Transport & comm. equipment/infrastructure
Furniture,amenities & other fixed assets
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

0.02

909.38

1040.49

1172.43

1280.43

1465.02

1577.14

1848.3

2016.86

2220.09

2611.29

2951

3113.41

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

2.01

2.01

2.01

13.81

19.91

25.85

81.78

21.48

63.5

0.55

0.06

0.16

0.16

0.16

0.16

Approved securites (slr/statutory req.)

Assisted companies

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

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

86.14

61.03

74.06

66.51

60.19

49.26

1076.19

1218.58

1482.35

1921.93

2473.92

2687.26

57.71

74.73

83.56

195.5

261.93

175.76

Net lease reserve adjustment

Less: Cumulative depreciation
Less: Arrears of depreciation
Net fixed assets
Investments

Mutual funds
Debt instruments

Deferred tax assets

Current assets
Cash & bank balance
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

24.19

31.28

49.53

95.83

123.72

150.51

57.16

44.82

31.07

10.81

36.27

151.78

Expenses paid in advance

Loans & advances
Deferred revenue expenditure
Total assets

No of companies

19

32.84

16.44

13.64

13.89

15.96

13.97

3177.99

3477.95

3948.01

4803.55

5692.26

6216.47

33

35

36

35

35

29

Liabilities
Ceramic Tiles
Rs. Crore (Non-Annualised)

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

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

0.03

0.03

0.03

0.02

0.03

0.03

137.82

136.33

137.28

70

38.49

30.74

11.18

36.27

10.04

24.04

5.6

36.4

518.67

599.03

700.66

1027.08

1541.19

2039.8

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

217.31

209.72

207.19

173.95

188.55

120.73

1445.68

1537.15

1764.67

1949.18

2219.21

2184.39

Forfeited equity capital

Paid up preference capital (net of forfeited capital)
Capital contibution, suspense and application money
Reserves & surplus
Free Reserves

Less Accumulated losses

Total borrowings
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

345.83

292.15

147.88

71.18

50.8

62.83

Financial institutional borrowings

Central & state govt. (usually sales tax deferrals)
Debentures / bonds
Convertible
Non-convertible
Fixed deposits
Foreign borrowings
Of which : euro convertible bonds
Borrowings from corporate bodies
Group / associate cos.
Borrowings from promoters / directors
Commercial paper
Hire purchase borrowings
Deferred credit

138.1

113.17

95.13

55.2

80.09

45.03

8.67

11.98

11.98

3.63

13.76

129.43

100.99

82.95

51.57

65.78

44.61

40.33

40.68

33.92

25.7

21.83

20.86

0.82

26

78.41

146.88

148.56

157.64

15.83

34.71

43.45

47.21

60.39

74.1

2.96

5.39

4.55

0.66

0.83

0.64

19.29

9.46

11.19

23.64

29.02

35.4

40

80

60

50

5.48

3.36

4.37

5.09

3.82
30.89

34.9

33.21

33.21

30.79

29.84

72.88

54.19

57.18

118.1

12

34.33

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

141.25

490.82

591.3

732.3

1147.05

1227.55

1271.27

278.5

328.56

444.93

711.24

723.01

755.53

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

0.19

0.15

0.15

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

Other borrowings
Secured borrowings

Current liabilities & provisions

Sundry creditors
Acceptances

Share application money

20

Deferred tax liability

280.45

284.02

299.96

315.52

336.75

337.95

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

Total liabilities

21

Profits
Ceramic Tiles
Rs. Crore (Non-Annualised)

Mar-03

Mar-04

PBDITA

Mar-05

Mar-06

Mar-07

Mar-08

448.82

496.49

513.7

557.25

689.31

757.23

Depreciation

137.51

151.42

165.39

185.2

214.88

226.22

Amortisation

6.17

6.13

4.13

3.93

5.41

3.89

305.14

338.94

344.18

368.12

469.02

527.12

171.17

142.01

147.77

161.54

185.66

217.52

2.37

2.72

3.46

3.63

4.42

4.04

0.02

0.03

0.06

0.06

131.6

194.19

192.95

202.92

278.88

305.5

37.7

63.45

58.61

85.75

105.99

92.83

Corporate tax

14.3

28.17

29.24

50.98

66.63

74.54

Deferred tax

29.04

35.43

32.92

33.13

36.56

20.2

5.64

0.16

3.55

4.14

3.16

8.38

0.01

5.78

5.96

6.47

5.61

5.85

6.37

93.9

130.74

134.34

117.17

172.89

212.67

PAT (as reported by the Co.)

55.78

133.9

124.46

113.95

173.19

212.38

Prior period & extra-ordinary income

74.09

53.45

35.79

13.91

15.61

16

Prior period & extra-ordinary expenses

12.16

12.03

5.67

10.19

13.72

5.62

Net prior period & extraordinary transactions

-61.93

-41.42

-30.12

-3.72

-1.89

-10.38

PBDITA net of P&E

386.89

455.07

483.58

553.53

687.42

746.85

PBIT net of P&E

243.21

297.52

314.06

364.4

467.13

516.74

PBT net of P&E

69.67

152.77

162.83

199.2

276.99

295.12

PAT net of P&E

31.97

89.32

104.22

113.45

171

202.29

PBIT
Interest paid
Financial charges on instruments
Fee based financial services expenses
PBT
Provision for direct tax

Less: Deferred tax assets / credit

Other direct tax
Fringe benefits tax
PAT

Distribution of profits (%)

PBDITA

100

100

100

100

100

100

Depreciation & Amortisation

32.0128337

31.732764

32.9998053

33.9398834

31.958045

30.3883893

Financial charges

38.6658349

29.1546658

29.4393615

29.645581

27.5841058

29.2671975

Tax

8.39980393

12.7797136

11.4093829

15.3880664

15.3762458

12.2591551

PAT

20.9215276

26.3328567

26.1514503

21.0264693

25.0816033

28.0852581

7.61

5.74

3.22

2.85

2.7

3.15

Sundry debtors

4.25

3.48

3.22

2.82

2.67

3.11

Loans & advances including NPAs

1.72

1.72

0.03

0.03

0.04

Loans & advances to group cos.

0.54

0.54

1.1

Power expenses

Gratuity

Others

33

35

36

35

35

29

Non--provisions for:
Diminution in investement

Interest expenses

No of companies

22

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
Net Worth

23

X100

5. Growth Rate:
Growth rate of sales represents how much percentage of sales are increased or decreased
in 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)
24

Analysis
Financial performance:
Financial performance=

Net profit X100

Net worth

Table.1

(Rs. in crores)

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

2007

172.89

1908.75

2008

212.67

2422.86

Graph:1
Financial performance
14
12

12

12

10

ratio

10

2007

2008

8
6
4
2
0
2003

2004

2005

2006
years

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.
25

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

26

Graph: 2
Cost structure
0.4

0.36

Cost structure

0.35

0.31

0.3

0.29
0.25

0.25

0.23

0.23

2007

2008

0.2
0.15
0.1
0.05
0
2003

2004

2005

2006
years

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.

27

Operating Performance:
It shows the relationship between EBIT& Total Assets.
Operating Performance= EBIT

X100

Total Assets
Table.3

(Rs.in crores)

Years

EBIT

Operating
Performance

Total Assets

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
120
100

96

97
87
76

Ratio

80

82

84

2007

2008

60
40
20
0
2003

2004

2005

2006
Years

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
28

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
37

40
35

Ratio

30

34

34
30

29
24

25
20
15
10
5
0
2003

2004

2005

2006

2007

2008

years

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.

29

Growth trend in total assets:

Growth rate of sales represents how much percentage of sales are increased or decreased
in a year as compared to the previous year.
Growth Rate = Current Year -1
Previous Year
Table:5

(Rs.in crores)

Years

Assets

Trend in (%)

2003

3177.99

---------

2004

3477.95

2005

3948.01

13

2006

4803.55

21

2007

5692.26

18

2008

6216.47

Graph:5
Growth trend in total assets
25

21
18

values

20
13

15
9

10

5
0
2003

2004

2005

2006

2007

2008

yeras

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.
30

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
28

30
25

21

values

20

20

17
13

15
10
5
0
2003

2004

2005

2006

2007

2008

years

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.

31

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
Table:7

(Rs.in crores)

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
3500

Trend analysis

3000
2500

2422.86

2000

1908.75

1500
1000

2630.27

3161.633
2858.771

961.04

1065.48 1151.08

1391.8

500
0
2003

2004

2005

2006

2007

2008

2009

2010

values

Estimated value of net worth for 2009 is 2630.27.

Estimated value of net worth for 2010 is 2858.771.
Estimated value of net worth for 2011 is 3161.633.
32

2011

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
Years

(Rs.in crores)
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 OF
CORRELATION

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.

33

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.

34

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.

35

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.

36