Content Topic

Page No. Cover page-

1 Content page-

2

Candidate declaration-

3

Acknowledgement

4

Chap-I-

5-6

Preface&Scope of the study

5

Objective of the study

6

Chap-II-

6-17

Global Tiles Industry

6-7

Global Sanitary Industry

7

About Indian Ceramic tiles Industry

8-15

Industry Statistics

16-17

Export-Import Scenario

17

Chap-III-

17-26

Research Methodology&Findings

17-25

Limitations

25-26

Chap-IV-

26-39

About OCIL

26-29

Financial Analysis &Recommendation

30-36

Demand Drivers

37

SWOT Analysis

38

Distribution System

38

Ceramic Marketing

38-39

Chap-V

39-41

Other Recommendations

39

Risk & Concerns

40

Conclusion

40-41

References

41

Chapter I Preface 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 years later, 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 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 articles including crockery, art ware, sanitary ware, 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 impressive growth propelled by the demand for high-alumina ceramics, cuttings tools and structural ceramics from the industry. Overall, the Indian ceramics industry has emerged as a major manufacturer and supplier in the global market.

Scope Of The StudyCeramic tile comes under Building Material Industry. Over the years, Indian Building Material Industry poised to grow at a fast pace of almost 16%/annum due to boom in real estate and construction industry. Increase in income levels and availability of a range of financing options for housing is enabling rapid growth in housing construction.In India, particularly in NCR region, growth rate of building material industry is at very high and constantly growing. By this project finding, 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.Also as marble prices begin to pinch purses in these times of meltdown, tiles are making deeper inroads into urban homes. And they are getting more designer makeovers to suit market demands.

Objective Of The StudyOur 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 , especially in Ghaziabad and Meerut region in terms of Quality, Brand Equity, Price and Customer Service.

Further scope and opportunity analysis.

Chapter-II Global Tiles IndustryThere are three major regions in the world, namely, Asia, Latin America and European Union (EU), that produce and export ceramic tiles in bulk. In 2008, they had jointly produced more than 87% of the global output. World production of ceramic tiles was 7565 million sq.mt. in 2008.China was the largest producer with a total production of 2200 million sq.mt. Spain and Italy were the 2nd and 3rd largest producers with production of 635 million sq.mt. and 589 million sq.mt. respectively. India ranks at 5th position with production of 270 million sq.mt., which is around 2.5% of global production.

The ratio between consumption and production has been stable at around 94 per cent. Ceramic tile production has been increasing at a cumulative rate of close to 6 per cent. Asia is the most signifcant region by production, as well as consumption, accounting for more than 50 per cent of both. China is the leading country in the production of ceramic tiles with a share of 33 per cent at a total production of 2,200 million square metres, followed by Spain and Italy. Europe accounts for 30 per cent and USA accounts for 14 per cent of the total global production of ceramic tiles. In terms of consumption the pattern remains similar, with Asia accounting for 51 per cent, Europe for 26 per cent and USA accounting for 18 per cent of the total global ceramic tile consumption.

Global Sanitaryware IndustryThe global sanitary ware industry is estimated to be 187 million pieces and growing at about 7 per cent Y-o-Y. The main sanitaryware producing countries in the world are China, Italy, Mexico, Brazil and Spain, which together account for about 35 per cent of global production India, with a size of 6.7 million pieces, accounts for about 3.3 per cent of global production. Penetration of sanitaryware in India-about 30 per cent, is much lower than even neighbouring Asian countries, indicating signifcant growth potential for this sector in the Indian market. The Indian sanitaryware market has been growing at about 10 per cent a year, as compared to the global average growth of about 7 per cent.

INDIAN CERAMICS INDUSTRY Ceramic Tiles Indias ceramic tile industry emerged in the 1950s. Tiles form the most significant part of the Indian ceramics industry and consist of floor tiles (46 per cent), vitrified and porcelain tiles (12 per cent) and wall tiles (42 per cent). 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. It is expected that this segment will capture the bulk of the market gradually, replacing the conventional floor and wall tiles segment. These tiles are light and have the added advantage of being offered in designer looks as compared to mosaic tiles, which are heavier and more expensive to transport. Both organised and unorganised sectors play a key role in the manufacturing of ceramic tiles in India. The per capita consumption of ceramic tiles in India is very less as compared to the other countries in the world. It is as low as 0.15 sq.mtr per annum. 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. Ceramic Tiles are furnishing material apart from being utility or hygiene products. Despite an overall slowdown of the economy this sector continues to grow at a healthy 12 percent per annum. 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. India ranks 7th in terms of production in the world and the market share of India have risen from 1.7 percent to 2.7 percent in terms of ceramic tile production.

MARKET SIZE OF THE INDIAN CERAMIC INDUSTRY

The Indian ceramic tile industry is estimated at US$ 0.35 billion. It Comprises of wall tiles, floor tiles and vitrified tiles. The per capita Consumption of ceramic tiles in India is just 0.15 square metres per Annum, which is quite low as compared to developed countries.

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

Asian Granito (India) Ltd.

Euro Ceramics Pvt. Ltd.

H. & R. Johnson (India) Ltd.

Kajaria Ceramics Ltd.

Nitco Tiles Pvt.Ltd.

Orient Ceramics And Industries Ltd.

RAK Ceramics India Pvt. Ltd.

SPL Ltd.

PRESENTMARKET SHARE OF TILE PRODUCER COMPANIES IN NORTHERN INDIA

A Brief Description of Major PlayersOrient Ceramics Industries Ltd.Headquartered at New Delhi, Orient was incorporated as a Public Limited Company on 18th May 1977 for the manufacture of ceramic tiles with an installed capacity of 0.4 Million sq. mtrs. per annum which has now grown to 14 million sq. mtrs. per annum. Mr. Mahendra K. Daga currently heads Orient Ceramics as Chairman & Managing Director with the credo of delivering products of sustained excellence and superior quality.

Orients state of the art manufacturing unit at Sikandrabad (Bulandshar, U.P.) is spread across 40 acres of land and conforms to the IS 13753-56:1993 of BIS, ISO 10545-1/17 & ISO 13006 specifications. Orient has also been accredited with the ISO 9001:2000 certification for quality control management.

Since inception, OCIL has been scaling new heights and has evinced a steady growth rate. OCILs commitment to excellence and quality has earned it a wide and diverse customer base, which spreads across Europe, South East Asia, Middle East and the SAARC countries.

It plans to diversify into importing and distributing other building material products. This shall be accomplished through a strong network of over 800 dealers and 2500 sub-dealers spread all over the country.

The operative keywords are:

Quality

Durability

Aesthetic Appeal

Thus, it 'creates tiles with a distinct persona'.

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.

KAJARIA TILES: It is the largest ceramic floor and wall tile manufacturer in the second most populous country in the world. It is promoted by Mr. Ashok Kajaria and Kajaria Export Limited (Group Company) in technical collaboration with Todagres, S.A., Spain. It commenced operation in 1988 in Sikandrabad, (Uttar Pradesh) with an annual capacity of 1 MSM of floor tiles. It possesses an annual installed capacity of 21 MSM across two facilities at Sikandrabad, (Uttar Pradesh) and Gailpur (Rajasthan). It has been equipped with eight stock points, eight Kajaria World showrooms, 19 offices-cum-display centres and 7,000+ dealers and sub-dealers on a pan-India basis. It is the most prominent Indian ceramic tile brand with a favourable recall. The largest exporter of ceramic tiles in India. It has unmatched product offering (wall, floor, vitrified, Spanish and Italian tiles). It has brand-enhancing customers like Unitech, DLF, Parsvnath, Magarpatta, Sobha Developers, DSK, Mantri Group,Prestige Group, Ansals, Hiranandani, Raheja Developers, Omaxe and EMAAR-MGF, among others.

ASIAN TILES: This company is the result of the dreams of three entrepreneurs, materialized with the grassroots of passion, experience & dynamism With starting a quest for excellence a decade ago, today

Asian tiles have blazed a trail in the tile industry. With humble beginning in the field of floor tiles, today it has expanded till the horizon, covering almost each of the aspects of the industry. Supported by vast man power along with mind power, Asian Tiles possesses the strength of over 3000 business associates spread across the nation. Asian is all set to reach the goal of supplying world class product, through a network of 18 depots with display centres & ultra modern plant in the ceramic zone of Sabarkantha, Gujarat, spread over an area of 2, 30,000 Sq. Mtr. and production capacity of two plants is 32300 Sq. Mtr. Per day of tile. Asian has become India's leading wall tile manufacturer in large format size, with the biggest size of 300 X 900 mm, where we provide wall tiles of white body similar to European tiles, with the promise of extremely accurate size control, to add brightness and depth to the glaze.

H & R JOHNSONS: H. & R. Johnson (India) Limited is India's No. 1 tile company offering a wide range of wall and floor tile products across various segments v.i.z. Wall, Floor, Vitrified, Exterior and Industrial. The company also has diversified interests in sanitary ware and bathroom accessories. With a vast portfolio comprising of 5 well-known brands in India (Johnson, Marbonite, Porselano, Endura & Milano) the company provides the most innovative products of international standards that is coupled with the best of pre and after sales service.

EURO CERAMICS: Part of Euro Group Integral part of the Decorative industry in India.

Promoters:Mr. Nenshi Shah: Mr. Talakshi Nandu : Mr. Kumar Shah : Mr Paresh ShahCurrent Business Profile:Vitrified Ceramic Tiles :79,971 MTPA.Aluminium Extruded Sections :1800 MTPA Calcareous Tiles :45,000 MTPA Sanitary ware: 11,000 MTPA Trading in Wall Tiles through a 100% subsidiaryTechnology: SACMI (For Vitrified Tiles & Sanitary ware)Quality focus:

Vitrified Tiles :ISO 13006. Applied Consumer Services Inc.

Florida, U.S.A. VJTI, MumbaiManufacturing facilities :ISO 9001:2000 certified

NITCO TILES: A foundation laid on innovation. Since 1953.Going beyond the ordinary and leading by example is a common tradition practised at Nitco. No wonder, the company is renowned and revered for its revolutionary concepts, pioneering endeavours and premium products in the construction industry for over five decades.Today, with its rich repertoire in offering unique Floor Tiles, Mosaico, Wall Tiles and Marble, Nitco has gone to become the most preferred name and the ideal choice of millions of house-holds and the real estate fraternity. An avant-garde at the core, the company has continued to pioneer ground breaking innovations in all its offerings. Ceramic Tiles, Vitrified Tiles, Pavers, Imported Marble, Engineered Marble, Intarsia-splendours of inlay marble and Mosaico- artistic creations in mosaic rendered in stone, ceramic and marble, for instance. Winning 13 Capexil awards for innovation and design is the perfect testament to all of its achievements.

SOMANY TILES: In the Indian tiles sector, Somany has achieved a clear leadership position by wholeheartedly adopting forward thinking and an innovative and futuristic approach. Whether ceramic glazed tiles, vitrified tiles, sanitary ware or porcelain floor tiles, Somany prides itself in being at the very forefront of style and quality. From raw material imported from Italy and Spain, to the constant endeavor to be the first to introduce new products in India, Somany has been, and will always strive to be a dynamic leader in its field.

It began as a vision of things to come, and is today a trail-blazer that others follow. In 1969 Shri H L Somany incorporated a company called Somany Pilkington's, which later became Somany Ceramics Ltd. It was the power of a dream and the zeal to excel, that drove Shri H L Somany to forge a path of unparalleled success for this company.

The dynamic leadership team in Somany not only spans three generations of able leaders, it also brings together their staggering breadth of experience and wisdom. With Shri H L Somany at the helm as Founder, Shri Shreekant Somany as the CMD and Shri Abhishek Somany as the JMD, the company is heading towards an exciting phase of expansion and growth. 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. 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, both in mind and spirit.

In 1971 the very first unit of Somany started production in Kassar, Haryana. Since then Somany has reached and surpassed many milestones setting-up of second unit in 1981, buyout of all equity shares by Somany's Indian promoters in 1994; achieving Government recognition for its R&D Department in 1996 (a first in the tiles industry); getting ISO 9002 certification in 1998; achieving ISO 14001 for environment friendly facilities, in 1999; ventured in retailing in 2007, joint venture with Keraben under brand name Synergy, got patent for VC technology-a first ever in Indian Ceramics industry and incorporation of HL Somany group.

Somany Global flagship retail showrooms are currently located in Delhi, Gurgaon, Ludhiana and Mumbai, Pune and Indore. Many other retail showrooms are about to be opened in leading centres. These showrooms cater to high-end customers and offer imported tiles as well as exclusive Aquaware brand sanitary ware. A large network of Somany display centers are also spread across the country.

A wide cutting-edge array of designs and material make up the inspiring Somany range of tiles. Somany strives to bring its customers floor, wall, vitrified, ceramic, porcelain and innovative tiles that are the very latest in the world. Somany prides itself in the sheer variety of design and finish, and constantly looks to bring new and trend-setting ideas into the tile industry. The futuristic patented VC Shield range of tiles from Somany, are the world's most durable floor tiles. Created using the breakthrough, 'Veilcraft technology', that creates a special layer on the tiles that keep them free from abrasion, scratches and stains, these tiles retain the original glaze and finish for years. No wonder then, that these tiles comprehensively outperform ordinary ceramic tiles including PEI grade 5 tiles.

Venturing into the burgeoning sanitary ware sector, Somany has already made major in-roads into this market. With its range of high quality products and offerings under the brand name of Aquaware, Somany is focusing on creating a niche for itself in this sector, by bringing in and adopting the latest in design, concept and technology.

In the endeavor to bring the very best to customers, we source our raw material from as far as Italy, Spain, and China besides Rajasthan, Uttar Pradesh, Madhya Pradesh and other major centers in the country.

Somany has a production capacity of 15.7 million sq mt per annum from its Haryana and Gujarat units. It has always focused on acquiring and leveraging the latest technologies and know-how. 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 has borne fruit in the form of Somany's achievement of establishing the very first Government Recognized In-house Research & Development Centre.

Somany has also brought in some ground-breaking technologies into the Indian market. Their highly advanced Rotocolour Machine has the capacity to decorate ceramic tiles with glazes, using a serigraphic decorating system that employs silicon cylinders. This integrated system that optimizes decoration of tiles enables any kind of random design and also a marble effect. A truly trend-setting achievement, it has helped Somany to set new industry benchmarks in quality and production standards for ceramic tiles.

Another exceptional technological advantage has been achieved with Somany's new Laser Guided Vehicle system. This cutting-edge material transportation system has automated the movement of ceramic materials in the production system. The Laser Guided Vehicle facilitates optimal and accurate handling, thereby minimizing rejection of in-process materials during the production of tiles. 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.INDUSTRY STATISTICS:1.World production:

6900 Million sq.mt.2.India's Share:

340 Million sq.mt..3.World ranking (in production):

54.Per capita consumption:

0.30 sq.mt.5.Global Industry Growth Rate:

6%

6.Growth Rate (India Domestic Market):

15%7.Organized industry turnover (India):

Rs 3000 crores

Glazed Wall Tile share:

40%

Glazed Floor Tile share:

46%

Unglazed Vitrified Tile share:8%

Glazed Porcelain Tile Share:

6%

Unorganised Industry TurnoverRs 3500 crores

Glazed Wall Tile share:57%

Glazed Floor Tile share: 35%

Unglazed Vitrified Tile share:

6%

Glazed Porcelain Tile Share:2%8.Investments in last 5 years:

Rs 2000 crores 9.Organized sector:

Share of Production:

56%

No. of units:

16

Revenue (excise duty):

Rs 300 crores 10.Unorganized sector:

Share of Production:

44%

No. of units:

200 (approx..) (70% based in Gujarat region)

Revenue (excise duty):

Rs 350 crores per annum or less 11.Job Potential:

50,000 direct

500,000 indirect

Export & Import ScenarioApart from domestic demand, exports of ceramic tiles from India have also been increasing. From a level of US$ 33.3 million in 2001-02, exports of ceramic tiles from India have gone up to US$ 58.5 million in 2006-07, at a CAGR of 12 per cent. India exports tiles to other parts of Asia, Africa and West Europe. The other main exports of ceramic products consist of chemical porcelain and insulators, handicraft artware and stoneware crockery. Imports of tiles have gone up rapidly in recent years, to almost match the level of exports. From around US$ 8.3 million in 2001-02, imports have gone up to nearly US$ 55 million in 2006-07, at a CAGR of 46 per cent. Rising imports indicate the rapid growth in domestic demand for tiles, due to boom in real estate construction.

CHAPTER-III Research MethodologyTitle:

To determine the perception about various tiles quality, brand equity, price and customer service.

Title Justification:Title is self-explanatory. The study mainly deals with the quality, brand awareness, price analysis and above all customer experience about the various tile products and categories.

Objective: To determine the awareness level of different major tile players among the architects. To determine the customer awareness level, particularly for new users of tiles. In depth study on the dealer network of various tiles manufacturers.

Significance of the study:Significance for the industry:This is a limited study which takes into consideration the responses of 20 architects, 25 dealers & 150 customers. This data can be explorated to take in the trends across the industry. The significance for the industry lies in studying these trends that emerge from the study. It is a rapidly changing and evolving sector. A study like this can attempt to guide the future of the industry based on current trends.

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.Significance for the researcher:To have a firsthand research experience about tiles industry. Various primary and secondary data sources would help in shaping a good notion about the industry trends and its future prospects. Also recommending measures to improve the present scenario of a company would boost up the confidence of the researcher.

Research Design:Type of Research: Exploratory and descriptive experimental research

Size of sample: 20 Architect, 25 dealers and 150 customers.

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. A well-structured questionnaire was prepared and personal interviews were conducted to come to the conclusion.

Brand Awareness Analysis: BRAND AWARENESS RATING

MEAN RATING

INTERPRETATION:According to the architects brand awareness, Kajaria Tiles is on the top followed by Somany tiles, H.R.Johnsons Pvt. Ltd., Orient tiles and Nitco Tiles.Quality Analysis: Quality Rating

Quality Mean

INTERPRETATION: According to the Architects, quality wise Kajaria Tiles is leading the market followed by H.R.Johnson Pvt. Ltd., Somany Tiles, Orient Tiles and Nitco Tiles.

Dealers Network: Dealers Network Rating

Dealers Networks Mean

INTERPRETATION: According to Architects view, Kajaria ceramics has the widest dealers network in the sample area followed by Orient Tiles, Somany Tiles, H.R.Johnson Pvt. Ltd, and Nitco Tiles.

Overall Architects Choice:

INTERPRETATION: Overall view of the Architects leads to this fact that the surveyed region is mostly favoured by Kajaria Tiles Pvt. Ltd., followed by Somany Tiles Pvt. Ltd., Orient Tiles Pvt. Ltd. And Nitco Tiles in the branded and organised ceramic tiles segment.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.

The parameters are as follows:

1. Price2. Durability and quality3. Awareness4. Response pace5. Availability6. Variety Overall Customer Rating

Overall Customer Experience Mean

Interpretation:

The above mentioned graph shows a very tough competition among all the major organised players. Kajaria tiles is ahead in terms of customer rating followed by Orient Tiles, H.R.Johnson Ltd., Somany Tiles and Nitco Tiles.Dealers Experience Study:

A total number of 25 dealers 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/dealers discount

Frequency of taking dealers advice

Customers prerequisite specification needs, if any

Variety in quality and size of the tiles Dealers ranking

Overall Dealers Experience Rating

Overall Dealers Experience Mean

Interpretation:In terms of dealers study, Kajaria Tiles is the most sought after brand followed by Somany Tiles,Orient Tiles, H.R.Johnson Ltd. And Nitco Tiles.

Limitations of the Study: The sample size is very less, 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.

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.

There is some respondents bias which cannot be removed.

some amount of error exists in the data filling process because of the following reasons:

Influence of others.

Misunderstanding of the concept.

Hurried filling of the questionnaire. The research is confined to a certain parts of Ghaziabad and Meerut and does not necessarily shows a pattern applicable to all of Country. Some respondents were reluctant to divulge personal information which can affect the validity of all responses.

In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings. Chapter IV ORIENT TILES

. (OCIL) spearheaded by Mr. Mahendra K.Daga, has earned a reputation of being the frontrunner in innovation in home dcor.

In line with the company's credo of sustained excellence and superior quality, we constantly endeavour to provide customers with the finest ceramic floor and wall tiles, through our exhaustive product range, innovative designs & sophisticated colours. This endeavour is accomplished using a state-of-the-art environment friendly manufacturing unit at Sikandrabad, UP. Here, the latest technology is employed to manufacture products that adhere to international quality standards. The patterns used ensure that the tiles crafted provide both aesthetic appeal and durable functionality.

Such commitment to quality and product innovation has earned us a wide and diverse customer base. Our clientele extends beyond house builders, architects, and institutions in India to Europe, South East Asia, Middle East and the SAARC countries.

We plan to diversify into importing and distributing other building material products. This shall be accomplished through a strong network of over 800 dealers and 2500 sub-dealers spread all over the country.

The operative keywords are:

Quality

Durability

Aesthetic Appeal

Thus, we 'create tiles with a distinct persona'.

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.

History of OCIL:Headquartered at New Delhi, Orient was incorporated as a Public Limited Company on 18th May 1977 for the manufacture of ceramic tiles with an installed capacity of 0.4 Million sq. mtrs. per annum which has now grown to 14 million sq. mtrs. per annum.

Mr. Mahendra K. Daga currently heads Orient Ceramics as Chairman & Managing Director with the credo of delivering products of sustained excellence and superior quality.

Our state of the art manufacturing unit at Sikandrabad (Bulandshar, U.P.) is spread across 40 acres of land and conforms to the IS 13753-56:1993 of BIS, ISO 10545-1/17 & ISO 13006 specifications. We have also been accredited with the ISO 9001:2000 certification for quality control management.

Since inception, OCIL has been scaling new heights and has evinced a steady growth rate. Our commitment to excellence and quality has earned us a wide and diverse customer base, which spreads across Europe, South East Asia, Middle East and the SAARC countries.Market Potential of OCILThe industrys potential appears attractive, following the realty growth in the housing, retail, IT and BPO sectors. The low per capita consumption projects a rising demand for ceramic tiles in India as they are used for aesthetic, besides utility and hygiene reasons. To capitalise on the latent demand, the industry players have expanded their distribution networks significantly. Owing to the delicate nature of the product, distribution and logistics costs form a substantial portion of the total costs and the success of the distribution chain marked by delivery promptness, well-equipped dealer stocks and wide market reach is critical to the success of retail sales.

Indian economy is poised to grow at 7-8 percent and with growing incomes and urbanization, demand for houses is slated for growth. The increasing focus on rural areas, by government and corporate, the demand for housing would also increase in rural areas. The ceramic industry will also benefit from the above developments. Increasing demand is just one part of the story the availability of Finance is the other part. 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. 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. This would further increase the demand for tiles.THE WORLD OF ORIENT

Tiles Range:

Interior RangeFloor Tiles29.5*29.5

30*30

39.5*39.5

40*40

49.5*49.5

60*60

60.5*60.5

Wall Tiles (in cm.)

14.8*14.8

20*20

20*30

20*40

29.5*59.5

60*6060.5*60.5

Exterior Range

Floor Tiles (in cm.)

30*30

39.5*39.5

40*40

Wall Tiles (in cm.)

14.8*14.8

20*40

Price Analysis

The price of ceramic tiles depends on the various size and measurements of the tiles. Although we have noticed that tile dealers are not ready to give price details fairly, somehow we have managed to extract some of the tiles prices of various players.

the mostly used vitrified tile size for living room is 2 X 2, for kitchen and for toilet people used to install ceramic tiles of 16 X 16 and 12 X 12. For dining they used to stick with vitrified tiles of 2 X 2 size.

Now , in wall tiles segment, the general market price in Ghaziabad starts from Rs.21/sqft,in floor it is Rs.22/sqft and in vitrified it is Rs.35/sqft.

Financial Overview of OCIL

FINANCIAL ANALYSIS AND RECOMMENDATIONSAfter 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. Profitability ratios

3. Investors interests ratios

1. CURRENT RATIO- It is an indicator of the firms commitment to meet its short term liabilities.It is expressed as follows- 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

=2.26

RECOMMENDATIONS- An ideal current ratio is 2.this is just above 2 but a company should maintain ratio between 1.5-2 so company should decrease it some points as it is showing less efficient use of funds.

This is due to because of high dependence on long term sources of raising funds.

Long term liabilities are costlier than current liabilities therefore this will result in considerably lowering down the profitability of the company.

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.to 942762466 rs.in 2008 by 57% increased.

2. LIQUIDITY RATIO- (acid test ratio or quick ratio)This ratio is the indicator of the short term solvency of the company.

It shows the comparison of inventory holds up.

We will not consider prepaid expenses and stocks in liquid assets.

Liquidity ratio- liquid asset/current liabilities

= 985072204-423999406/435494357

= 1.28

Recommendation-satisfactory ratio should be 1.so it is just above 1 so company needs to reduce its inventory level as it blocks cash of the company.

3. DEBT EQUITY RATIO- the debt-equity ratio is determined to ascertain the soundness of the long term financial policies of the company.=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.

4.RETURN ON INVESTMENT/RETURN ON CAPITAL EMPLOYED-IT INDICATES THE PERCENTAGE OF RETURN ON THE TOTAL CAPITAL EMPLOYED IN THE BUSINESS.

=operating profit/capital employed

=43685580/14939220722=2.92%(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.no one can dare to run a investment in just 3% which is below than to the interest of banks saving account.

Company gave some reasons behind this-

a. High operating cost due to high inflation.

b. The maximum projects that company undertook were in bulk discounted so they increased the sales revenue but could not increase profit margin.

c. High competition from local players.

5.RETURN ON EQUITY SHARE HOLDERS FUND-=PROFIT AFTER TAX/EQUITY SHARE HOLDERS FUND

=24873117/479817704

=5.1%(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,bonds ,debentures so investors will go away.

Recommendation-company needs to decrease its operating cost such as inventory cost, manufacturing costs because this year they were having higher percentage in operating costs.

6.GROSS PROFIT RATIO-this ratio is the relationship between gross profit and net sales.

=gross profit/net sales

=net sales-cost of goods sold/net sales

=2145679729-(199560672+1829127984)/2145679729

=5.45%(poor)

Suggested reasons-

a. The cost of goods sold has grown up without corresponding increase in the selling price of goods.

b. There may be decrease in the selling price of the goods sold without corresponding decrease in the cost pf goods sold.

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.

7DIVIDEND PAYOUT RATIO-=DIVIDEND PER SHARE/EARNING PER share

=.50/2.46

=20%

8. DIVIDEND YIELD RATIO-=DIVIDEND PER SHARE/MARKET PRICE PER SHARE

=.50*100/30

=1.67%

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.

9.EARNING PER SHARE- THE EPS HELPS IN DETERMINING THE MARKET PRICE OF THE EQUITY SHARE OF THE COMPANY.

=PROFIT AFTER TAX/NO OF SHARES

COMPARISON

Euro ceramics=16(F.V.=10) 160%

KAJARIA=2.3(F.V.=2)115%

Orient=2.46(F.V.=10)24.6%

So in comparison with other company orient has got less EPS.so we can say that the capital of shareholders is not being effectively used.

10. PRICE EARNING RATIO-=MARKET PRICE PER SHARE/EARNING PER SHARE

EURO-2.5=40.05/EPS=16.02(F.V.=10)

KAJARIA-24.9=29.25/EPS=1.17(F.V.=2)

BELL-46=6.90/EPS=.15(F.V.=10)

ORIENT=16.9=30/EPS=1.79(F.V.=10)

P/E RATIO COMPARISON-

EURO