fbpx

Industry Sheet – Tiles Industry in India

Industry Sheet - Tiles Industry in India - As of 10 June 2021

VALUE PROPOSITION

Customer Segments

Customer Segments in the tiles industry in India can be classified on the basis of:
1. Purpose – residential, commercial, replacement
2. Geography – rural, urban
3. Income Group – LIG, MIG, HIG.
4. Distribution channel – traditional retail, organised retail, ecommerce
5. City/state wise – Top 8 cities, other cities

Read More »

Customer Gains and Pains

Products and Services

Tiles are available in various forms such as ceramic, granite, marble, limestone, porcelain and so on.

However, Ceramic tiles are the most commonly used tiles. These can be further classified on the basis of
1. Usage – roof tiles, wall times, floor tiles
2. Application – GVT, PVT etc

Read More »

Activities and Participants

Value Chain

Key activities to be performed are:
1. Sourcing of raw materials
2. Manufacturing of tiles
3. Distribution through various channels
4. Marketing & branding activities
5. Inventory Management
6. Logistics & warehousing

Read More »

Industry Map

Demand- Supply Scenario

Industry Characteristics

Market Size

(All numbers are in INR crores)

Read More »

Market Stability

The Revenue share of companies has been stable over the years. As a result, Tiles Industry in India is a Stable Industry.

Read More »

Pricing Power

The Industry has not been able to increase realisation per square meter. The industry has Low Pricing Power.

Read More »

Competitive Life Cycle

Industry is in Mature Stage. The reasons are –
1. Slow growth of the industry, in line with GDP.
2. No significant product introductions.
3. Stable Margins
4. Low capital Investment entering the field.

Read More »

Disruptive Forces

Indian Tiles Industry does not face any major disruptive threats. However, an increased use of wooden flooring, marble, granite etc has been observed. There is no major technological threat faced by the industry

Read More »

Regulations

Major regulations in the Indian Tiles Industry are as followings
1. Implementation of RERA to protect the interests of industry players
2. Reduced GST rates to augur demand for new houses
3. Unorganised industry shifting to natural gas due to regulatory requirements
4. Ban on use of coal gasifiers by NGT (National Green Tribunal)
5. Various government initiatives that boost the demand
6. Various licenses and clearances required for business commencement

Read More »

Porter's Profit Forces

Supplier Power

Low to Moderate Supplier Power

Read More »

Buyer Power

Moderate Buyer Power

Read More »

Threat of Substitution

High threat of substitutes

Read More »

Threat of New Entrants

Moderate threat to new entrants

Read More »

Threat of Competitive Rivalry

High Competitive Rivalry

Read More »

Financial Health of Companies in the Industry

ROE and DuPont Analysis

ROE = Profit Margin x Asset Turnover x Leverage
Kajaria Ceramics Ltd (FY21) –11% x 1.1 x 1.31 = 16%
Somany Ceramics Ltd. (H1FY21 TTM) – (-0.1%) x 0.95 x 2.1 = (-0.2%)
Asian Granito(FY21) – 4% x 0.95 x 2.08 = 8%
Orient Bell Ltd.(FY21) – 2% x 1.16 x 1.74 = 3%

Read More »

Growth

Investment Needs

Kajaria Ceramics Ltd. – High CFO and moderate CFI, leads to positicve FCF each year.
Somany Ltd. – Moderate CFO and cyclical CFI. FCF Fluctuates as a result.
Asian Granito – Moderate CFO and CFI. Occasional large investments outflow.
Orient Bell Ltd. – Positive FCF generated each year.

Read More »

Outlook

Trends in Industry

Major trends observed in the tiles industry include the followings:
1. Technological trends (3D printing, nano technology, etc)
2. Shift from decorative to utility products
3. Growing demand from unconventional areas (rooms, malls, offices etc)
4. Growing demand of vetrified tiles
5. Shift from unorganised to organised players (45% share)
6. Inspite of COVID-19, tiles demand has been growing

Read More »

Industry Specific Risks

Major risks faced by the industry are
•Competition from unorganised players
•Unfavourable movement in natural gas prices
•Dumping of Chinese tiles
•Rising raw materials costs
•Anti-dumping duty on Indian export from country like GCC
•Dependent directly on real estate sector
•Over-capacity and Pricing pressure from unorganised market
•Economic slow-down may affect prospects of smaller dealers

Read More »

Growth Factors

Factors that indicate a healthy growth for the industry are
1. Shift from traditional materials to tiles
2. Govt. initiative of developing 100 smart cities, Housing for all by 2022
3. Shift from unorganised to organised sector
4. New segment opportunities (faucets, sanitary ware etc)
5. Emergence of concept bathrooms
6. Increasing replacement demand
7. Favourable demographics and disposable income

Read More »

Variables for success in Industry

Key variables of success are as follows –
1. Margin sustainability (increasing realization/sqm.)
2. Pan-India Distribution Network
3. Extensive focus on Branding
4. High Volume orders
5. High exports
6. Entering into asset-light models
7. Focusing on after-sale services

Read More »

Additional Notes

Branding & Advertisement

Branding is a key activity in the tiles industry as recognition plays a crucial role in the purchase consideration.

Companies spend a large amount getting celebrities to endorse their brands and benefit from the same. Salman Khan, Akshay kumar and others have endorsed Tiles Brands in the past.

Read More »

We plan to have this for every Industry with listed company in it in India. Join to stay updated.

Got something that you would like to be added?  Suggest Improvements