A Summer Training Report on Cramic Tile

8/4/2019 A Summer Training Report on Cramic Tile

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A SUMMER TRAINING REPORT ONMARKET RESEARCH ON CERAMIC TILESINDUSTRY IN GHAZIABAD AND MEERUTREGION AND FINANCIAL ANALYSIS OFORIENT CERAMICS LTD.SUBMITTED TOWARDS THE PARTIAL FULFILLMENTOF

POST GRADUATE DIPLOMA INBUSINESS ADMINISTRATION(APPROVED BY AICTE, GOVT OF INDIA)

(EQUIVALENT TO MBA)ACCADEMIC SESSION(2008-2010)Submitted To- Submitted By-Mr. T.N.Srivastava Nitesh shah B-08-28Head, Training & Placement CellGraduate School of Business &Administration, Greater Noida,U.PExternal Guide- Internal Guide-Mr. Vijay Deepak Gupta Prof. H.S.SHYAM

Regional Manager, Orient Ceramics Industries Ltd. Faculty, Marketing Dept.,GSBAGRADUATE SCHOOL OF BUSINESS & ADMINISTRATION,GREATER NOIDA1

ContentTopic Page No.Cover page- 1Content page- 2Candidate declaration- 3Acknowledgement 4Chap-I- 5-6

Preface&Scope of the study 5Objective of the study 6Chap-II- 6-17Global Tiles Industry 6-7Global Sanitary Industry 7About Indian Ceramic tiles Industry 8-15Industry Statistics 16-17Export-Import Scenario 17Chap-III- 17-26Research Methodology&Findings 17-25Limitations 25-26Chap-IV- 26-39About OCIL 26-29


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Financial Analysis &Recommendation 30-36Demand Drivers 37SWOT Analysis 38Distribution System 38Ceramic Marketing 38-39

Chap-V 39-41Other Recommendations 39Risk & Concerns 40Conclusion 40-41References 412

Candidate Declaration/Certificate of SupervisorI hereby declare that the work which is being presented in this report entitledMarket Research on Ceramic Tiles Industry in Ghaziabad & Meerut RegionAnd financial overview of company is an authentic record of my own workcarried out under the supervision of Mr. Vijay Deepak Gupta, Regional Manager,OrientCeramic Industries Ltd.The matter embodied in this report has not been submitted by me for the award ofany other degree.Dated: 4-7-09 Name ofStudentNITESH KUMAR SHAHThis is to certify that the above statements made by the candidate are correct to thebest of my knowledge.Signature

SupervisorName:MR.VIJAY DEEPAK GUPTADesignation:REGIONAL MANAGERCompany-Orient Ceramics Industry LTD.3

AcknowledgementI express my profound gratitude to Mr. Vijay Deepak Gupta, RegionalManager,

Orient Ceramics Industries Pvt. Ltd who assigned me as a Summer TraineeinOrient Ceramics Industries Pvt. Ltd. I want to give my sincere thanks tohis kind advice and guidance that had made my project successful.Manyof the sound advices have been well taken by me and it is largely due tohis patience that I was able to achieve my goals successfully.I am also grateful to DR. P.L.MagguExecutive Director, GraduateSchool of Business & Administration, Greater Noida, Mr. T.N.Srivastava

Head ,Training and Placement Cell, GSBA, Prof.V.N.Rai, Dean,GSBA,Mr. Vijay Deepak Gupta, Regional Manager, Orient Ceramic Industries

Ltd., and all the faculties of GSBA who supported a lot and gave me thepermission of Summer Training in Orient Ceramics Industries Ltd..


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Also I would like to give regards to my Parents, seniors, friends whohavein some way helped me in completing this project.Nitesh kumar shahPGDBA-III, B08-28

Chapter I4

PrefaceThe word "Ceramic" has originated from the Greek word, "Keramos", which meanspottery. 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, withthe establishment of settled communities, tiles were manufactured in Mesopotamiaand India. The first instance of functional pottery vessels being used for storing waterand 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 hasmatured over time to form a industrial base. From traditional pottery making, theindustry has evolved to find its place in the market for sophisticated insulators,electronic and electrical items. Over the years, the industry has been modernisingthrough new innovations in product profile, quality and design to emerge as amodern,world-class industry, ready to take on global competition.Though there are a number of large companies in the ceramics sector, small andmedium enterprises (SMEs) account for more than 50 per cent of the total market inIndia, offering a wide range of articles including crockery, art ware, sanitary ware,

ceramic tiles, refractory and stoneware pipes among others. Most of the players aregrouped together in clusters.Over the last two decades, the technical ceramics segment has recorded animpressive growth propelled by the demand for high-alumina ceramics, cuttings toolsand structural ceramics from the industry. Overall, the Indian ceramics industry hasemerged as a major manufacturer and supplier in the global market.

Scope Of The StudyCeramic tile comes under Building Material Industry. Over the years, Indian BuildingMaterial Industry poised to grow at a fast pace of almost 16%/annum due to boom in5real estate and construction industry. Increase in income levels and availability of arange of financing options for housing is enabling rapid growth in housingconstruction.In India, particularly in NCR region, growth rate of building material industry is at veryhigh and constantly growing. By this project finding, we have been trying to catch theopportunities and demand of various tile making organisations for their commercialand residential needs in Ghaziabad and Meerut region.Also as marble prices begin to pinch purses in these times of meltdown, tiles aremaking deeper inroads into urban homes. And they are getting more designermakeovers to suit market demands.

Objective Of The Study

Our soul objective of this report confines with these facts-To know the nitty-gritty of Ceramic tile industry as much possible


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Determine the market size and potential of all the organise and unorganisedplayers

A comparative analysis among some major players of tiles industry , especiallyin Ghaziabad and Meerut region in terms of Quality, Brand Equity, Price andCustomer Service.

Further scope and opportunity analysis.

Chapter-IIGlobal Tiles Industry6There are three major regions in the world, namely, Asia, Latin America andEuropeanUnion (EU), that produce and export ceramic tiles in bulk. In 2008, they had jointlyproduced more than 87% of the global output. World production of ceramic tiles was7565 million sq.mt. in 2008.China was the largest producer with a total production of2200 million sq.mt. Spain and Italy were the 2nd and 3rd largest producers withproduction of 635 million sq.mt. and 589 million sq.mt. respectively. India ranks at 5 thposition with production of 270 million sq.mt., which is around 2.5% of globalproduction.The ratio between consumption and production has been stable at around 94 percent. Ceramic tile production has been increasing at a cumulative rate of close to 6per 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 theproduction of ceramic tiles with a share of 33 per cent at a total production of 2,200million square metres, followed by Spain and Italy. Europe accounts for 30 per centand 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 51per cent, Europe for 26 per cent and USA accounting for 18 per cent of the totalglobal ceramic tile consumption.


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Global Sanitaryware IndustryThe global sanitary ware industry is estimated to be 187 million pieces andgrowing at about 7 per cent Y-o-Y. The main sanitaryware producing countries inthe world are China, Italy, Mexico, Brazil and Spain, which together account forabout 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 sanitarywarein 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 Indiansanitaryware market has been growing at about 10 per cent a year, as compared tothe global average growth of about 7 per cent.

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INDIAN CERAMICS INDUSTRY

Ceramic TilesIndias ceramic tile industry emerged in the 1950s. Tiles form the most significantpart of the Indian ceramics industry and consist of floor tiles (46 per cent), vitrifiedand porcelain tiles (12 per cent) and wall tiles (42 per cent). The floor tiles segmentisgrowing faster as compared to wall tiles. Vitrifed and porcelain tiles are recententrants into the ceramic tile industry and have increased the size of the marketconsiderably. It is expected that this segment will capture the bulk of themarket gradually, replacing the conventional floor and wall tiles segment. Thesetiles are light and have the added advantage of being offered in designer looks ascompared to mosaic tiles, which are heavier and more expensive to transport. Bothorganised and unorganised sectors play a key role in the manufacturing of ceramic


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tiles in India. The per capita consumption of ceramic tiles in India is very less ascompared 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 thefuture in India as more and more development takes place. Ceramic Tiles arefurnishing 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 perannum. Growth of the unorganized sector accounted for 44 percent of the totalProduction and the revenue earnings from the organized sector accounted to overRs150 crore. India ranks 7th in terms of production in the world and the market shareof India have risen from 1.7 percent to 2.7 percent in terms of ceramic tileproduction.

MARKET SIZE OF THE INDIAN CERAMIC INDUSTRY

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


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

ORGANISED PLAYERS10


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

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A Brief Description of Major PlayersOrient Ceramics Industries Ltd.Headquartered at New Delhi, Orient was incorporated as a Public Limited Companyon 18th May 1977 for the manufacture of ceramic tiles with an installed capacity of0.4 Million sq. mtrs. per annum which has now grown to 14 million sq. mtrs. perannum.Mr. Mahendra K. Daga currently heads Orient Ceramics as Chairman & ManagingDirector with the credo of delivering products of sustained excellence and superiorquality.Orients state of the art manufacturing unit at Sikandrabad (Bulandshar, U.P.) isspread across 40 acres of land and conforms to the IS 13753-56:1993 of BIS, ISO


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10545-1/17 & ISO 13006 specifications. Orient has also been accredited with theISO 9001:2000 certification for quality control management.Since inception, OCIL has been scaling new heights and has evinced a steadygrowth rate. OCILs commitment to excellence and quality has earned it a wideand 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 materialproducts. This shall be accomplished through a strong network of over 800 dealersand 2500 sub-dealers spread all over the country.The operative keywords are:Quality12DurabilityAesthetic AppealThus, 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 andoffices.

KAJARIA TILES:It is the largest ceramic floor and wall tile manufacturer in the second mostpopulous country in the world. It is promoted by Mr. Ashok Kajaria and KajariaExport Limited (Group Company) in technical collaboration with Todagres, S.A.,Spain. It commenced operation in 1988 in Sikandrabad, (Uttar Pradesh) with anannual capacity of 1 MSM of floor tiles. It possesses an annual installed capacity of21 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 ona pan-India basis. It is the most prominent Indian ceramic tile brand with afavourable recall. The largest exporter of ceramic tiles in India. It has unmatchedproduct offering (wall, floor, vitrified, Spanish and Italian tiles). It has brandenhancingcustomers like Unitech, DLF, Parsvnath, Magarpatta, Sobha Developers,DSK, Mantri Group,Prestige Group, Ansals, Hiranandani, Raheja Developers,Omaxeand EMAAR-MGF, among others.

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

excellence a decade ago, todayAsian tiles have blazed a trail in the tile industry. With humble beginning in thefield of floor tiles, today it has expanded till the horizon, covering almost each ofthe aspects of the industry. Supported by vast man power along with mind power,Asian Tiles possesses the strength of over 3000 business associates spread acrossthe 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 theceramic 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 hasbecome India's leading wall tile manufacturer in large format size, with the biggestsize 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 addbrightness and depth to the glaze.


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H & R JOHNSONS:13H. & R. Johnson (India) Limited is India's No. 1 tile company offering a wide rangeof 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 brandsin India (Johnson, Marbonite, Porselano, Endura & Milano) the company providesthe most innovative products of international standards that is coupled with thebest 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 MTPACalcareous Tiles : 45,000 MTPASanitary ware : 11,000 MTPATrading 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 leadingby example is a common tradition practised at Nitco. No wonder, the company isrenowned and revered for its revolutionary concepts, pioneering endeavours andpremium products in the construction industry for over five decades.Today, with itsrich repertoire in offering unique Floor Tiles, Mosaico, Wall Tiles and Marble, Nitcohas gone to become the most preferred name and the ideal choice of millions ofhouse-holds and the real estate fraternity. An avant-garde at the core, the14company has continued to pioneer ground breaking innovations in all its offerings.Ceramic Tiles, Vitrified Tiles, Pavers, Imported Marble, Engineered Marble,Intarsiasplendours

of inlay marble and Mosaico- artistic creations in mosaic rendered instone, ceramic and marble, for instance. Winning 13 Capexil awards for innovationand design is the perfect testament to all of its achievements.

SOMANY TILES:In the Indian tiles sector, Somany has achieved a clear leadership position bywholeheartedly adopting forward thinking and an innovative and futuristicapproach. Whether ceramic glazed tiles, vitrified tiles, sanitary ware or porcelainfloor 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 bethe 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.


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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 thezeal to excel, that drove Shri H L Somany to forge a path of unparalleled successfor 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 CMDand Shri Abhishek Somany as the JMD, the company is heading towards an excitingphase of expansion and growth. This core leadership team along with a large teamof highly dedicated and talented people is continuously working towards creatingmore value for all stakeholders. Their commitment to excel in every sphere and tofuel growth in the core as well as new sectors has truly created a powerful vitalitywithin the company, both in mind and spirit.In 1971 the very first unit of Somany started production in Kassar, Haryana. Sincethen Somany has reached and surpassed many milestones setting-up of secondunit 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 thetiles industry); getting ISO 9002 certification in 1998; achieving ISO 14001 forenvironment friendly facilities, in 1999; ventured in retailing in 2007, joint venturewith Keraben under brand name Synergy, got patent for VC technology-a firstever 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 tobe opened in leading centres. These showrooms cater to high-end customers andoffer imported tiles as well as exclusive Aquaware brand sanitary ware. A largenetwork of Somany display centers are also spread across the country.A wide cutting-edge array of designs and material make up the inspiring Somanyrange 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 pridesitself in the sheer variety of design and finish, and constantly looks to bring new15and trend-setting ideas into the tile industry. The futuristic patented VC Shieldrange of tiles from Somany, are the world's most durable floor tiles. Created usingthe breakthrough, 'Veilcraft technology', that creates a special layer on the tilesthat keep them free from abrasion, scratches and stains, these tiles retain theoriginal glaze and finish for years. No wonder then, that these tilescomprehensively outperform ordinary ceramic tiles including PEI grade 5 tiles.

Venturing into the burgeoning sanitary ware sector, Somany has already mademajor in-roads into this market. With its range of high quality products andofferings under the brand name of Aquaware, Somany is focusing on creating aniche 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 materialfrom as far as Italy, Spain, and China besides Rajasthan, Uttar Pradesh, MadhyaPradesh and other major centers in the country.Somany has a production capacity of 15.7 million sq mt per annum from itsHaryana and Gujarat units. It has always focused on acquiring and leveraging thelatest 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 researchand development. This has borne fruit in the form of Somany's achievement of


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establishing the very first Government Recognized In-house Research &Development Centre.Somany has also brought in some ground-breaking technologies into the Indianmarket. Their highly advanced Rotocolour Machine has the capacity to decorateceramic tiles with glazes, using a serigraphic decorating system that employs

silicon cylinders. This integrated system that optimizes decoration of tiles enablesany kind of random design and also a marble effect. A truly trend-settingachievement, it has helped Somany to set new industry benchmarks in quality andproduction standards for ceramic tiles.Another exceptional technological advantage has been achieved with Somany'snew Laser Guided Vehicle system. This cutting-edge material transportationsystem has automated the movement of ceramic materials in the productionsystem. 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 itsvalued stakeholders and customers in India.

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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 DomesticMarket):15%

7. Organized industry turnover (India): Rs 3000 croresGlazed Wall Tile share: 40%Glazed Floor Tile share: 46%Unglazed Vitrified Tileshare: 8%Glazed Porcelain Tile Share: 6%Unorganised Industry Turnover Rs 3500 croresGlazed Wall Tile share: 57%Glazed Floor Tile share: 35%Unglazed Vitrified Tileshare: 6%

Glazed Porcelain Tile Share:2%8. Investments in last 5 years: Rs 2000 crores9. Organized sector:Share of Production: 56%No. of units: 16Revenue (excise duty): Rs 300 crores10. Unorganized sector:Share of Production: 44%17No. of units: 200 (approx..) (70% basedin Gujarat region)

Revenue (excise duty): Rs 350 crores per annum orless


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11. Job Potential: 50,000 direct500,000 indirect

Export & Import ScenarioApart from domestic demand, exports of ceramic tiles from India have alsobeen 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 aCAGR of 12 per cent. India exports tiles to other parts of Asia, Africa and WestEurope. The other main exports of ceramic products consist of chemical porcelainand insulators, handicraft artware and stoneware crockery. Imports of tiles havegone up rapidly in recent years, to almost match the level of exports. Fromaround US$ 8.3 million in 2001-02, imports have gone up to nearly US$ 55 millionin 2006-07, at a CAGR of 46 per cent. Rising imports indicate the rapid growth indomestic demand for tiles, due to boom in real estate construction.

CHAPTER-IIIResearch MethodologyTitle:

To determine the perception about various tiles quality, brand equity, price andcustomer 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 productsand 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 oftiles.

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 20architects, 25 dealers & 150 customers. This data can be explorated to take in thetrends across the industry. The significance for the industry lies in studying thesetrends 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 currenttrends.Also the views of the architects and dealers would help in determining the futurestrategies 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 andsecondary data sources would help in shaping a good notion about the industrytrends and its future prospects. Also recommending measures to improve thepresent scenario of a company would boost up the confidence of the researcher.

Research Design:

Type of Research: Exploratory and descriptive experimental research19


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Size of sample: 20 Architect, 25 dealers and 150 customers.Area of study: Lucknow citySampling procedure: Convenience SamplingMethod: 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 wereconducted 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 followedby Somany tiles, H.R.Johnsons Pvt. Ltd., Orient tiles and Nitco Tiles.

Quality Analysis:

Quality RatingQuality Mean21

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

Dealers Network:Dealers Network RatingDealers Networks Mean22

INTERPRETATION:According to Architects view, Kajaria ceramics has the widest dealers network in

0

1

2

3

4

5

6

1/poor 2/avg. 3/good 4/very good 5/Excellent

johnson

kajaria

sumani

asign

oters


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the sample area followed by Orient Tiles, Somany Tiles, H.R.Johnson Pvt. Ltd, andNitco Tiles.

Overall Architects Choice:

INTERPRETATION:23Overall view of the Architects leads to this fact that the surveyed region ismostly 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 tilessegment.Customer Experience Study:A total number of 100 customers (new user) being interviewed at various locationsof Ghaziabad and being asked to rate the above mentioned tile brands in terms oftheir awareness and choice and usage.The parameters are as follows:1. Price2. Durability and quality

3. Awareness4. Response pace5. Availability6. VarietyOverall Customer RatingOverall Customer Experience Mean24Interpretation:The above mentioned graph shows a very tough competition among all themajor organised players. Kajaria tiles is ahead in terms of customer rating followedby 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

Sales

Johnson

sumani

kajaria

others


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interviewed in Ghaziabad and Meerut Region on the basis of following parameters:

Brand availability in the store

Frequency of the inventoryTimely delivery

Special/urgent supplySupply timeRepresentative relationCash/dealers discount

Frequency of taking dealers adviceCustomers prerequisite specification needs, if any

Variety in quality and size of the tilesDealers ranking25Overall Dealers Experience RatingOverall Dealers Experience Mean

Interpretation:In terms of dealers study, Kajaria Tiles is the most sought after brandfollowed by Somany Tiles,Orient Tiles, H.R.Johnson Ltd. And Nitco Tiles.26

Limitations of the Study:The sample size is very less, hence it does not imply for the completepopulation.

There was lack of time and resources that prevented from carrying out an indepth 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 thefollowing 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 anddoes not necessarily shows a pattern applicable to all of Country.

Some respondents were reluctant to divulge personal information whichcan affect the validity of all responses.

In a rapidly changing industry, analysis on one day or in one segmentcan change very quickly. The environmental changes are vital to beconsidered in order to assimilate the findings.

Chapter IV27

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, weconstantly endeavour to provide customers with the finest ceramic floor and walltiles, through our exhaustive product range, innovative designs & sophisticatedcolours. This endeavour is accomplished using a state-of-the-art environment


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friendly manufacturing unit at Sikandrabad, UP. Here, the latest technology isemployed to manufacture products that adhere to international quality standards.The patterns used ensure that the tiles crafted provide both aesthetic appeal anddurable 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 SAARCcountries.We plan to diversify into importing and distributing other building materialproducts. This shall be accomplished through a strong network of over 800 dealersand 2500 sub-dealers spread all over the country.The operative keywords are:QualityDurabilityAesthetic AppealThus, we 'create tiles with a distinct persona'.

We are not just a tiles manufacturer but a company devoted to offer 'extraordinarywall and floor solutions'to create and enliven exclusive designer homes andoffices.

History of OCIL:Headquartered at New Delhi, Orient was incorporated as a Public Limited Companyon 18th May 1977 for the manufacture of ceramic tiles with an installed capacity of0.4 Million sq. mtrs. per annum which has now grown to 14 million sq. mtrs. perannum.28Mr. Mahendra K. Daga currently heads Orient Ceramics as Chairman & Managing

Director with the credo of delivering products of sustained excellence and superiorquality.Our state of the art manufacturing unit at Sikandrabad (Bulandshar, U.P.) is spreadacross 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 ISO9001:2000 certification for quality control management.Since inception, OCIL has been scaling new heights and has evinced a steadygrowth rate. Our commitment to excellence and quality has earned us a wide anddiverse customer base, which spreads across Europe, South East Asia, Middle Eastand the SAARC countries.

Market Potential of OCIL

The industrys potential appears attractive, following the realty growth in thehousing, retail, IT and BPO sectors. The low per capita consumption projects arising demand for ceramic tiles in India as they are used for aesthetic, besidesutility and hygiene reasons. To capitalise on the latent demand, the industryplayers have expanded their distribution networks significantly. Owing to thedelicate nature of the product, distribution and logistics costs form a substantialportion of the total costs and the success of the distribution chain marked bydelivery promptness, well-equipped dealer stocks and wide market reach iscritical to the success of retail sales.Indian economy is poised to grow at 7-8 percent and with growing incomes andurbanization, demand for houses is slated for growth. The increasing focus on rural

areas, by government and corporate, the demand for housing would also increasein rural areas. The ceramic industry will also benefit from the above


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developments. Increasing demand is just one part of the story the availability ofFinance is the other part. With the availability of loans at low interest rate and taxincentives have enabled the people to buy houses and build up their ownestablishment. With the increasing competition amongst both Banks and HousingFinance 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 ORIENTTiles Range:Interior RangeFloor Tiles29.5*29.530*3039.5*39.52940*4049.5*49.560*6060.5*60.5Wall Tiles (in cm.)14.8*14.820*2020*3020*4029.5*59.560*6060.5*60.5

Exterior RangeFloor Tiles (in cm.)30*3039.5*39.540*40Wall Tiles (in cm.)14.8*14.820*40

Price Analysis30The 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 detailsfairly, somehow we have managed to extract some of the tiles prices of variousplayers.the mostly used vitrified tile size for living room is 2 X 2, for kitchen and for toiletpeople used to install ceramic tiles of 16 X 16 and 12 X 12. For dining they usedto stick with vitrified tiles of 2 X 2 size.Now , in wall tiles segment, the general market price in Ghaziabad starts fromRs.21/sqft,in floor it is Rs.22/sqft and in vitrified it is Rs.35/sqft.

Financial Overview of OCIL31

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FINANCIAL ANALYSIS AND RECOMMENDATIONSAfter the analysis of profit & loss account and balance sheet of orient ceramics wehave got some financial analysis about the company and tried to give ourrecommendations according to it.We went for ratio analysis to find the actual financial condition of the company.

1. Liquidity ratios2. Profitability ratios343. Investors interests ratios1. CURRENT RATIO- It is an indicator of the firms commitment to meet itsshort term liabilities.It is expressed as follows- current assets/current liabilitiesFrom balance sheet=inventories+sundry debtors+cash+bankBalances+short term loans & advances/Current liabilities +provision=423999406+404470339+6962801+149639658/

411841400+23653137=2.26RECOMMENDATIONS- An ideal current ratio is 2.this is just above 2 but acompany should maintain ratio between 1.5-2 so company should decrease itsome points as it is showing less efficient use of funds.This is due to because of high dependence on long term sources of raisingfunds.Long term liabilities are costlier than current liabilities therefore this will resultin considerably lowering down the profitability of the company.In balance sheet of 31-03-2008 and 31-03-2007 we can also observe that longterm 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= 985072204-423999406/43549435735= 1.28Recommendation-satisfactory ratio should be 1.so it is just above 1 so

company needs to reduce its inventory level as it blocks cash of thecompany.3. DEBT EQUITY RATIO- the debt-equity ratio is determined to ascertain thesoundness of the long term financial policies of the company.=long term debt/equity=942762446/479817704=2:1So it can be said as satisfactory that company has 2/3 part debt and 1/3 partas equity.4.RETURN ON INVESTMENT/RETURN ON CAPITAL EMPLOYEDITINDICATES THE PERCENTAGE OF RETURN ON THE TOTAL CAPITAL

EMPLOYED IN THE BUSINESS.=operating profit/capital employed


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=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 youroperating 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 thisa.High operating cost due to high inflation.b. The maximum projects that company undertook were in bulk discountedso they increased the sales revenue but could not increase profit margin.36c. 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 satisfactoryas 8-10% is easily available through in fixed deposits,bonds ,debentures soinvestors will go away.Recommendation-company needs to decrease its operating cost such asinventory cost, manufacturing costs because this year they were having higherpercentage in operating costs.6.GROSS PROFIT RATIO-this ratio is the relationship between gross profit andnet sales.=gross profit/net sales=net sales-cost of goods sold/net sales=2145679729-(199560672+1829127984)/2145679729=5.45%(poor)Suggested reasonsa.The cost of goods sold has grown up without corresponding increase in theselling price of goods.b. There may be decrease in the selling price of the goods sold withoutcorresponding decrease in the cost pf goods sold.We found out from the company sources that due to bulk discounted orders in2007-08 which were got by dealing high competition resulted decrease in sellingprices without decreasing in the cost of goods.

7DIVIDEND PAYOUT RATIO-=DIVIDEND PER SHARE/EARNING PER share=.50/2.4637=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 highyield in other investments so company should consider shareholders benefits or try

to increase dividend yield.


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9.EARNING PER SHARE- THE EPS HELPS IN DETERMINING THE MARKETPRICE OFTHE EQUITY SHARE OF THE COMPANY.=PROFIT AFTER TAX/NO OF SHARESCOMPARISON

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 thatthe capital of shareholders is not being effectively used.10. PRICE EARNING RATIO-=MARKET PRICE PER SHARE/EARNING PER SHAREEURO-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 COMPARISONEURO

Documents

A Summer Training Report on Cramic Tile