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RESEARCH :: COMPANY:: ORIENT CERAMICS & INDUSTRIES LIMITED 
Long Term Buy
         6th September’ 2010
CMP   92.25 Incorporated in the year 1977, Orient Ceramics Limited is known for its innovation in home
Target price   130 décor. The company manufacturers Non-Vitrified, Vitrified, Ultra Vitrified and 3rd Fired
Potential Upside 40+
Decorative Tiles for walls, floors & facades. The company also imports and markets
Estimated EPS 13.57
  Vitrified Porcelain Tiles, Borders, Motifs and other value added accessories from various
Investment period 6-12 months
countries to complement its wide range of tiles.
 
Key Highlights
Stock Info (TTM Basis)
  Investments: The company is looking forward to invest Rs.100cr in expanding
Sector Ceramic Products
Market cap  (Rs Cr) 92.77
manufacturing capacity for green field project in Andhra Pradesh and also for joint venture
agreement.
Face value 10.00
Book value 58.41
  Robust Earnings in FY11: The company’s management is confident about its earnings
EPS 14.63
growth on account of volume growth, better realisations and emphasised high margin
Cash EPS 24.69
  product mix.The export volumes are expected to increase manifold as OCIL has grown its
Sales Growth 15.3%
presence across many nations worldwide.
52 week H/L 99.30/42.10
  (2wk) 0.88Lacs
Avg. Daily Vol Focus on Visibility Expansion: OCIL is eyeing on one lakh sq ft of retail area via
Managing Director Mahendra company owned and operated showrooms and opening of new franchisees including shop-
  K Daga in-shop stores.
Incorporation 1977
Listed At   NSE/BSE Future Outlook
Equity capital 10.53 At Current market price of Rs.92.25 , the stock is available at P/E of 8.49, and P/E of
Promoters Holding
  74.74%
6.81x of its FY11, and P/E of 5.56x of FY12 earnings. Fairwealth Research Desk
recommend BUY with target price of Rs.130, given that company’s future shows
  potential.
Why to Invest in Shares of
 
Orient Ceramics & Industries Particulars (In crores) FY10 FY11E* FY12E*
Ltd.………………..……Page 6
Net Sales 
253.94 284.41  327.07 
CONTENTS  % Change in Sales 12  15 
-
Key Highlights & Future
Expenditure  247.44  284.56 
Outlook…………… …..……Page1 221.16
Company PBIDT 
Profile…………………….….Page2 35.09 38 42.52
Peer Comparison…………..Page3 Profit After Tax  11.46  14.29  17.5 
60.
Financials of the
Company …………………...Page4 % Change in PAT ‐  24  22.46 
EPS  10.88  13.57  16.62 
Fairwealth Research Desk P/E Ratio  8.49  6.81   5.56  
http://fairwealth.in/Research.aspx 
Contact Us:- OPM %  13.82  13.36  13 
research@fairwealth.in
NPM %  4.51  5.02  5.35 
Direct Line: 0124-3024874/840
Source: Fairwealth Research Estimates E* stands for Estimated

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  Orient Ceramics & Industries Limited 
www.fairwealth.in/research.aspx 
             Buy‐ Riddhi Siddhi Gluco Biols Ltd 
 
Shareholding Pattern As on 30th June’2010
COMPANY PROFILE

Orient Ceramics & Industries Limited is a company which

manufacturers Non-Vitrified, Vitrified, Ultra Vitrified and 3rd
Fired Decorative Tiles for walls, floors & facades. The
company also imports and markets Vitrified Porcelain Tiles,
. Borders, Motifs and other value added accessories from
various countries to complement its wide range of tiles.

The company has a strong domestic presence by having a

dealer network of more than 1000 across India. The company
has three exclusive showrooms placed at Ahmedabad, Delhi
and Sikandrabad. The company’s production capacity stands
at 220000 TPA or 38,000 square metres per day. Orient
Ceramics has state-of-the-art, environment-friendly
manufacturing facilities.

OCIL client base comprises of individuals, house builders,

architects and institutions.
Source: Fairwealth Research, Capitaline database

Company’s Brand

The company has three brands: Orient, ‘Europa’ for European designer tiles and ‘Stiler’ for 3rd Fire Premium
Decorative Ceramics.

OCIL’s presence across Nations

The Company has also opened depots across the country at five more locations viz., Raipur, Lucknow, Guwahati,
Dehradun & Coimbatore and the opening of depots at Patna and Hyderabad and more locations is planned to distribute
the company's products effectively.

Strong Client base

Orient Ceramics’ clientele in the real estate development space includes leading developers like DLF, Unitech, Parsvnath,
Shobha Developers, Rahejas, Larsen & Tourbo, Rites, CPWD, MES, AAI and other large and small builders. Orient
products have been extensively used in the construction of the prestigious Rashtrapati Bhawan in addition to beautifying
structures like India Habitat Centre (New Delhi), Delhi High Court, Kolkata Airport, DMRC Stations and ITC-Sonar Bangla
(Kolkata) among others.

   
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  Orient Ceramics & Industries Limited 
www.fairwealth.in/research.aspx 
             Buy‐ Riddhi Siddhi Gluco Biols Ltd 

Peer Analysis

Kajaria
Particulars(Cr) Orient Ceramics  Nitco  Asian Granito  Ceramics
HSIL

Market Cap 92.77  190.6  125.94  489.44 687.22

Sales 260.06  387.8  428  774.64 847.96
PBIDT 32.07  21.32  49.96  121.62 164.76
Net Profit 11.04  ‐13.46  19.7  41.13 63.55
EPS 14.63  0  9.35  5.59 11.55
P/E 8.41  0  6.4  11.9  10.82 
EV/PBIDT 5.12  22.28  4.47  6.63 6.54
P/BV 1.51  0.37  0.6  2.58 1.76
Equity 10.53  32.12  21.06  14.72  11 
On TTM Basis

Orient Ceramics and Industries Limited has equity of Rs.10.53cr which is one of the least within the Industry. The
company is trading at a P/E of 8.41 in comparison to that of other players within the Industry-Asian Granito, Kajaria
Ceramics and HSIL with P/E of 6.4, 11.9 and 10.82. The company has EPS of Rs.14.63 on TTM Basis which is one of the
best among the industry.

Stock Performance v/s SMALLCAPINDEX

The price of Orient Ceramics &

Industries Limited consolidated for with
that of the SMALLCAP Index for a
period of 10 months. In the month of
May’2010, the stock price moved by
13% taking it to Rs.65.2. Thereafter. the
stock outperformed the SMALLCAP
Index. The stock price is expected to
move in a positive area from now on.

Source: Fairwealth Securities, Capitaline

   
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  Orient Ceramics & Industries Limited 
www.fairwealth.in/research.aspx 
             Buy‐ Riddhi Siddhi Gluco Biols Ltd 

QUARTERLY ANALYSIS

 Particulars (In crores)  Q1FY11  Q1FY10  VAR %  Q4FY10  VAR % 

Net Sales  60.5  54.3  11.4  80.17  ‐24.54 
Other Operating Income  0.38  0.28  35.7  0  0.00 
Other Income  6.78  0  0  0.81  737.04 
Total Income  67.66  54.58  24  80.98  ‐16.45 
Total Expenditure  54.95  47.58  15.5  68.54  ‐19.83 
PBIDT  12.71  7.00  81.6  12.44  2.17 
Interest  1.7  2.03  ‐16.3  1.29  31.78 
PBDT  11.01  4.97  121.5  11.15  ‐1.26 
Depreciation  2.71  2.66  1.9  2.76  ‐1.81 
Tax  2.99  0.79  278.5  2.87  4.18 
Profit After Tax  5.31  1.52  249.3  5.52  ‐3.80 
EPS  5.04  1.44  250  5.24  ‐3.82 
OPM %  21.01  12.89  0.00  15.52  35.39 
NPM %  8.78  2.80  0.00  6.89  27.47 

Source: Capitaline Database

Orient Ceramics has reported a increase of 11.4% in its sales number at Rs.60.5cr for the quarter ended June’2010 in
comparison to Rs.54.3cr in the corresponding quarter previous year.

The company’s bottom line surged massively by 249.3% to Rs.5.31cr in comparison to Rs.1.52cr in the corresponding
quarter previous year on account of reduced interest cost and subdued increase in depreciation cost.

The operating profit of the company for the quarter surged by 81.6% to Rs.12.71cr in the quarter ended June’10 as
against Rs.7cr in the corresponding quarter previous year.

During the quarter the company’s Operating Profit Margin stood at 21.01% and the Net Profit Margin stood at 8.78%.

The EPS for the June’10 quarter stood at Rs.5.04 in comparison to Rs.1.44 in the corresponding quarter previous
year.

On Q-O-Q Basis, the Company’s top line for the quarter de-grew by 24.54% to Rs. 60.5cr in comparison to Rs.80.17cr
in the previous quarter.

On Q-O-Q Basis, the bottom line subdued by 3.8% posting it to Rs. 5.31cr in the quarter as compared to Rs.5.24cr in
the previous quarter.

   
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  Orient Ceramics & Industries Limited 
www.fairwealth.in/research.aspx 
             Buy‐ Riddhi Siddhi Gluco Biols Ltd 

HISTORICAL PERFORMANCE
Particulars (In crores)  201003  200903  200803  200703  200603 
Net Sales  253.94  224.14  214.56  185.85  129.73 
Other Income  ‐  1.53  1.13  1.11  1.28 
Operating Income  2.31  ‐  ‐  ‐  ‐ 
 Total Income  256.25  225.67  215.69  186.96  131.01 
Total Expenditure  221.16  195.02  192.14  155.97  108 
PBIDT  35.09  30.65  23.55  30.99  23.01 
Interest  6.76  9.76  9.55  4.87  5.09 
PBDT  28.33  20.89  14  26.12  17.92 
Depreciation  10.82  10.63  9.63  8.74  10.57 
Tax  6.05  3.89  1.88  5.67  3 
Profit After Tax  11.46  6.37  2.49  11.71  4.35 
Equity  10.53  10.53  10.53  10.53  4.68 
Face Value  10  10  10  10  10 
EPS   10.88  6.05  2.46  10.83  9.1 
OPM %  13.82  13.67  10.98  16.67  17.74 
NPM %  4.51  2.84  1.16  6.3  3.35 

For FY10, Kajaria Ceramics posted a growth rate of 13.29% in its top line numbers at Rs.253.94 crore as compared to
Rs. 224.14 crore in FY09. The company is growing at a CAGR of approximately 18.25%.

The Bottom line of the company grew by 79.9% in FY10 to Rs.11.46crore in comparison to net profit of Rs. 6.37crore in
FY09.

The Operating profit Margin of the company stood at 13.82% in comparison to 13.67% in FY09.

Net Sales & PAT

The  net  sales  of  the  company  grew  by 

13.29%  during  the  FY10.  Whereas  the 
company’s  bottom  line  grew  massively  by 
79.9% in FY10. The company’s revenue have 
been increasing at a CAGR of 18.25%.  

   
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  Orient Ceramics & Industries Limited 
www.fairwealth.in/research.aspx 
             Buy‐ Riddhi Siddhi Gluco Biols Ltd 

Why to Invest in shares of Orient Ceramics & Industries Limited?

SECTOR:

Global Ceramic Tiles Industry

Globally, China is the largest ceramic tiles producer, accounting for 40% of the total global ceramic production.It
is also the largest consumer of Ceramic tiles accounting for 34% of the world consumption. The US$ 36 bn world
ceramic tiles industry is growing at 6% annually. The annual per capita consumption of ceramic tiles is led by
Turkey at 2.44 sqm. India’s per capita consumption is a low 0.36 sqm.

Indian Ceramic Tiles Industry

India ranks among the world’s top five tile producing countries with a total annual production of around 450 mn
sqm as on March’10.

The ceramic tiles industry is large, rapid, growing and populated by organized and unorganized
manufacturers. Over the last few years, industry prospects were subdued on account of an oversupply and
increasing imports. However, the environment recently turned favourable due to a combination of various
factors: Economic upturn, growing demand from the construction and real estate sectors as well as a decline in
dumping and oversupply. This scenario not only bodes well for the industry but your Company as well.

The industry can be classified into three key segments, viz., wall tiles,floor tiles and vitrified & porcelain tiles,
with market shares of 35%, 53% and 12%, respectively. Vitrified and porcelain tiles are recent entrants into
the ceramic tile industry and have increased the size of themarket considerably. This segment is expected to
capture the bulk of the market gradually, replacing the conventional floor and wall tiles segment on account of
durability, utility, maintenance and better appearance with premium pricing and higher realisations. In the
international markets these tiles are already major sellers.

The anti-dumping imposition of Rs.137 per sqm on ceramic glazed tiles imported from China will benefit
domestic manufacturers.

COMPANY:

Orient Ceramics & Industries Limited is the pioneer in manufacturing of Ultra Vitrified tiles in India.

The company is the first in the country to have in-house European Designer. The company’s newly
launched brands Europa and Stiler are hot picks among the Ceramic Industry because of their new and
innovated designs.

The company’s International Business Divison (IBD) was set up to exports to countries namely Dubai,
Muscat, Oman, Sri Lanka, Maldives and Mauritius.

OCIL has a direct dealer network of more than 1000 dealers across India.

The company has three exclusive showrooms at Ahmedabad, Delhi and Sikandrabad. The Sikandrabad
showrrom is 5000 sq ft which is especially established to cater to the increasing demand.

   
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  Orient Ceramics & Industries Limited 
www.fairwealth.in/research.aspx 
             Buy‐ Riddhi Siddhi Gluco Biols Ltd 

FUNDAMENTALS:

The company’s revenue have been growing at a CAGR of 18.25%. There has been a consistent growth
without a drop in the revenues of the company since last 5 years.

The company is trading at a P/E of 5.83. The Industry P/E prevails at 9.27.

The EPS of the Orient Ceramics & Industries Limited on TTM Basis stood at Rs.14.63 which inturn
states that the company is on growth path.

During the current quarter i.e. Jun’10, the company’s revenue grew by 11.4% to Rs.60.5cr and the
bottomline grew by 249% to Rs.5.31cr.

The Operating profit Margin of the company for FY10 stood at 13.82% in comparison to 13.67% in FY09.
 

Notes: Figures and graph sourced from www.bseindia.com , capital market and Company reports.                                           

Disclaimer:
This publication has been solely prepared for the information purpose and does not constitute a solicitation to any person to buy or
sell a security. While the information contained therein has been obtained from sources believed reliable investors are advised to
satisfy themselves before making any investments. Fairwealth Securities Pvt Ltd does not bear any responsibility for authentication of
the information contained in the reports and consequently is not liable for any decision taken based on the same. Further Fairwealth
Research report only provides information updates and analysis. All opinions for buying and selling are available to investors when
they are registered clients Of Fairwealth Investment advisory services. As a matter of practice, Fairwealth refrains from publishing
any individual names with its reports. As per SEBI requirements it is stated that, Fairwealth securities Pvt Ltd, and/or individuals
thereof may have positions in securities referred herein and may make purchases or sale while this report is in circulation.

   
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