`

A report on Brand equity of

Asian tiles & Investment and
Profitability analysis of major
organized Ceramic Tiles
company.
By:

PULKIT RUNGTA

0911 PGDMRM 030

POST GRADUATE
DIPLOMA IN RETAIL
AND MARKETING

INSTITUTE OF PUBLIC
ENTERPRISE
HYDERABAD
 Contents

Topic Page No.

Cover page- 1

Content page- 2

Candidate declaration- 3

Acknowledgement 4

Chap-I-

Preface &Scope of the study 5-6

Objective of the study 7

Chap-II-

Profile of the company 8

Profile of the Industry 9-11

Current status overview of the Industry 12-13

Chap-III-
Brand equity 14
Research methodology and design 15-17
Data analysis and interpretation 18-27
Investment and profitability analysis 28-32

Swot analysis & Recommendations 33-35

Bibliography 36

Declaration
2
Acknowledgement
3
I express my profound gratitude to MR. Vinay Gupta, AGM, Asian Granito India
Ltd. who assigned me as a Summer Trainee at Asian Granito India Ltd.
I want to give my sincere thanks to his kind advice and guidance that had made
my project successful. Many of his suggestions have been well taken by me which
have enabled me to achieve my goals successfully.
I am also grateful to Prof. R.K Mishra – Director, Institute of Public enterprise,
Hyderabad, Mr. V. Srikanth –Coordinator, Post Graduate diploma in Retail and
Marketing ,Miss Shaheen ,internal guide and mentor and all the faculties of IPE
who supported and gave me the permission of Summer Training at Asian Granito
India ltd.
Also I would like to give regards to my Parents, seniors & friends who have in
some way helped me in completing this project.

Pulkit Rungta

PGDM-RM 030, 09-11

Preface:

4
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 modernizing
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 Study

5
Ceramic 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 developing cities, 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 organizations for
their commercial and residential needs in the Eastern region of the country.

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 Study

6
Our soul objective of this report confines with these facts-

• To find the trend and advancement in Ceramic industry.

• Determine the market size and potential of all the listed and Non-listed
players in the industry.

• A comparative analysis among some major players of tiles industry,

especially in the Eastern region of the country Quality, Price and Customer
Service.

• Further scope and opportunity analysis.

• Competitive analysis and Brand equity analysis of Asian ceramics

• Investment and profitability of organized ceramic tiles players.

Profile of the company

7
With starting a quest for excellence a decade ago by the efforts of 3 entrepreneurs,
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 4000 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 centers & ultra modern plant
in the ceramic zone of Sabarkantha, Gujarat, spread over an area of 2, 30,000 Sq.
Mtr. and production capacity of five plants is 36800 Sq. Meter Per day.
The Current Chairman of the Company is Mr. Kamlesh patel, and the Managing
director is Mr. Hansmukh Patel.
Asian Granito have served numerous clients across the country ,few prestigious
clients being State Bank of India, State Bank of Hyderabad, Reliance Industries ltd,
DLF group, Raymond’s etc. through its ISO 9001:2008 quality certified products.

Vision
To become a leader in ceramic industry.
To uphold quality at every stage and maintain consistency to win the Trust of its
Valued Customers worldwide.
To Remain as Innovative Global Leader.

Profile of the industry

8
Industry Highlights

Ceramic Tiles today have become an integral part of home improvement. It

can make a huge difference to the way your interiors and outdoors look and
express.

The Indian tile industry, despite an overall slowdown of the economy,

continues to grow at a healthy 15% per annum.

The Indian tile industry is divided into organized and unorganized sector.

The organized sector comprises of approximately 16 players. The current size

of the unorganized sector is about Rs 3000 crores

The unorganized sector accounts for 55% of the total industry bearing
testimony of the attractive returns from this sector. The size of the
unorganized sector is approximately Rs 3500 crores
Revenue earning industry - excise mops up over Rs. 350 crores annually from
the organized sector itself.

Indian ranks in the top 5 list of countries in terms of tile production in the
world.

With proper planning and better quality control our exports (presently
insignificant) contribution can significantly increase.

Overall picture of the Industry

Ceramic tiles as a product segment has grown to a sizeable chunk today at 340
Millions Square meters production per annum. However, the potential seems to be
great, particularly as the housing sector, retail, IT & BPO sectors have been
witnessing an unprecedented boom in recent times. The ceramic tiles sector has

9
been clocking a robust growth of 12-15% consistently over the last few years.
Today, India figures in the top 5 countries in the world manufacturing ceramic
tiles.

The key drivers for the ceramic tiles in India are the boom in housing sector
coupled by government policies fuelling strong growth in housing sector. The
retail boom in the Indian economy has also influenced the demand for higher end
products. Overall the bullish growth estimates in the Indian economy has
significantly influenced the growth of the Indian Ceramic tile industry.

The main product segments are the Wall tile, Floor tile, Vitrified tile and Porcelain
tile segments. The market shares are 35%, 53% and 12% respectively for Wall,
Floor & Vitrified/Porcelain tiles. The tiles are available in a wide variety of
designs, textures and surface effects. They cater to tastes as varied from rustics to
contemporary marble designs in super glossy mirror finishes.

Both, traditional methods of manufacturing (tunnel) and the latest single fast firing
methods are deployed in manufacturing. Some of the latest trends in manufacturing
methods can be seen in India.
The investments in the last five years are approx. Rs 2000 crores. The industry also
enjoys the unique distinction of being highly indigenous with an abundance of raw
materials, technical skills, infrastructural facilities despite being fairly capital
intensive. A total of over 5,50,000 people are employed in the sector. Out of this,
50,000 people are directly employed and 5, 00,000 are indirectly associated. The
potential is huge considering the per capita consumption of ceramic tiles in India.
Currently it is at 0.30 square meters per person in comparison to over 2 square
meters per person for like countries like China, Brazil and Malaysia

Where we stand and what we must do?

As a foreign exchange earner or a global player, Indian Tile industry has captured
the attention of the world in the ceramic tiles segment. India is projected to figure
in the top 3 countries manufacturing ceramic tiles by 2010. This however is subject
to policies favorable for the tile industry to complete with international players on
an even ground.

10
To compete internationally, our plants must be geared up to large units currently
operating in China and Turkey are driven by economies of scale. These will also
help us in lowering our cost of production significantly. Also, infrastructural
support is a key factor that determines the speed of growth. Better infrastructure
will bring in better growth in terms of consistency and sustenance. Freight, supply
of power and gas remains the key cost-related issues impacting the industry.
Availability, consistent supply and reasonable rates are extremely important for the
growth of the ceramic tile industry.

Also, the prevailing anomalies pertaining to Basic Customs Duty on import of

ceramic tiles from China and raw materials imported from abroad need to be
corrected to prevent dumping of tiles from China. Rural thrust should be enhanced
by favorable excise duty and MRP structure.

Current status of the Industry

The ceramic tiles industry in India has followed similar trends internationally
which have been characterized by excess capacities and falling margins. Countries
like Malaysia, Thailand, Indonesia, Sri Lanka and Vietnam are setting up their own
plants. China has emerged as a major competitor. Producers from Spain and Italy
have the advantage of lower transportation costs while exporting to USA and
Germany. In India, the per capita consumption is as low as 0.30 square meters per
11
person compared to China (2 square meters per person), Europe (5 to 6 square
meters per person) or Brazil (2.5 square meters per person). Rising disposable
incomes of the growing middle class and 40 million units of housing shortage hold
out a great potential.

A major change that took over the ceramic tiles industry, was the introduction of
vitrified and porcelain tiles. These new entrant product types are said to be the tiles
of the future. Internationally these tiles are already the major sellers. This category
of products account for 13% of all organized sales in this industry.

These new products and the conventional wall & floor tiles have together made the
organized industry grow to a formidable Rs. 3000 crores industry. This coupled
with a spate of expansions by many players make the industry look very promising
in the future.

Fast facts:

• World production: 6900 Million sq.mt.

• India's Share: 340 Million sq.mt.
• World ranking (in production): 5
• Per capita consumption: 0.30 sq.mt.
• Global Industry Growth Rate: 6%

12
 • Growth Rate (India Domestic Market): 15%
• Organized industry turnover (India): Rs 3000 Cr.
• Unorganized Industry Turnover Rs 3500 crores
• Investments in last 5 years: Rs 2000 crores

• Organized sector:
Share of Production: 56%
No. of units: 16
Revenue (excise duty): Rs 300 crores

• 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

• Job Potential:

50,000 direct

500,000 indirect

A research on brand equity of

Asian Granito India Ltd.
Brand equity is one of the most important levers of profitability, due to its
unique ability to contribute directly to the bottom line without adding features or

13
lowering price (both of which cost organizations money). Brand equity is an
umbrella concept that captures the overall asset value of a brand. Strong brand
equity enables organizations to:

• Command premium prices

• Capture and maintain market share
• Sustain longer product lifespan
• Support new product line extensions
• Attract investors
• Ward off competition

Factors
affecting
Brand equity.
Research
methodology and
Design. 14
Research Design:

Type of Research: Exploratory and descriptive experimental research

Size of sample: 60 major dealers of organized ceramic tiles company

Area of study: Kolkata and other cities of Eastern region.

Sampling procedure: Convenience Sampling

Research methodology:
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.
The model questionnaire is shown as follows:-

A Survey on Brand Equity and Customer

Preference of Asian Tiles

15
 1.How do you rate the Brand Awareness of the Following Companies?.

Poor Below Average Good Excellent

Average
Asian Granito ❏ ❏ ❏ ❏ ❏
Kajaria ceramics ❏ ❏ ❏ ❏ ❏
Nitco Tiles ❏ ❏ ❏ ❏ ❏
Orient Tiles ❏ ❏ ❏ ❏ ❏
Somani tiles ❏ ❏ ❏ ❏ ❏

2. Are you satisfied with the product range offered By Asian Tiles?
1. Very Dissatisfied
2. Not Satisfied
3. Neutral
4. Satisfied
5. Very Satisfied

3. How important are these Factors which influence the Buying decision of the customers?

very Important Important Neutral Less Important Not Important

Product Quality ❏ ❏ ❏ ❏ ❏
Product Price ❏ ❏ ❏ ❏ ❏
Product Size ❏ ❏ ❏ ❏ ❏
Product Availability ❏ ❏ ❏ ❏ ❏
Colour/texture/design ❏ ❏ ❏ ❏ ❏
Brand Name of the Product ❏ ❏ ❏ ❏ ❏

4. Which Quality Is Demanded Maximum by the Bulk purchaser/contractors/suppliers ?(Please

Rank as 1,2 and 3. maximum Demand as Rank 1 as so on.)

• Premium/1st quality __________

• standard/2nd quality __________
• utility/3rd quality __________

16
5. How do You Rate the Client Relationship management of Asian Tiles?

1. very good
2. good
3. Average
4. Poor
5. Very poor

6.What is the Customer Demand for the Following Flooring Sizes?

High Average Low No demand

Demand Demand Demand
300mm x 300mm ❏ ❏ ❏ ❏
405mm x 405mm ❏ ❏ ❏ ❏
618mm x 618mm ❏ ❏ ❏ ❏
808mm x 1212mm ❏ ❏ ❏ ❏

7. What do you think are the Major Threats / challenges to Vitrified Tiles Industry?

8. NAME OF THE FIRM:

17
Data Analysis
&
Interpretation

Q.How important is these Factors which influence the Buying decision of the customers?

very Important Important Neutral Less Not

Important Important

Product Quality ❏ ❏ ❏ ❏ ❏
Product Price ❏ ❏ ❏ ❏ ❏
Product Size ❏ ❏ ❏ ❏ ❏

18
 Product Availability ❏ ❏ ❏ ❏ ❏
Color/texture/design ❏ ❏ ❏ ❏ ❏
Brand Name of the Product ❏ ❏ ❏ ❏ ❏

1. Quality may be the most critical component in satisfying an organization's

customer.
Good brand is mostly associated with quality it offers.
Out of the collected data, 60% of the dealers believed that quality was an important
factor or more than important for making a buying decision by the customers.
But around 33% of the respondents were neutral about the product quality as the
major decisive factor for buying other factors such as price and design were vital.
Moreover the contractors and government suppliers as they believed gave more
emphasis on price rather than anything else.
Only around 7% believed that quality was not important in customer’s perception.
19
 Asian tiles already have the best quality in the market and thus needs to
continue its effective quality management to cater the large group of consumers
which gives quality as the major choice of preference.

2. The price of ceramic tiles depends on the various size and measurements of
the tiles. Although it have been 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
customers sticks with vitrified tiles of 2’ X 2’ size.
Now, in wall tiles segment, the general market price in Kolkata starts from
Rs.21/sqft, in floor it is Rs.22/sqft and in vitrified it is Rs.38/sqft. Bigger sizes
of vitrified tiles are further highly priced.
Coming to the price perception among respondents, 70% of the customers
consider price as the most important or considerably important factor buy
making a buying decision, whereas 25% are neutral on this aspect. Remaining
5% do not consider price as an important factor.

As per the opinion of a major dealer, Asian tiles have priced their
products above the average price of the tiles of other brands, mainly due to
the product quality it offers.
But making buying possible for the average buying capacity customers, it
still needs to come out with economical products mainly in vitrified tiles
segment.

3. Tiles making companies on a fast pace are importing technologies to

produce large sized flooring and wall tiles to make its presence felt in the
market, but from the research it seems that there is not much demand for the
tiles sized above 2 X 2 floor segment.
As much as 46% of the responded believed that the customers didn’t give much
significance to the product size while 45% people found it important.

20
 4. Availability of a product and design was found to be a major concern for
the dealers and retailers. Since the trade is still not very organized, there are
concerns with supply and demand of the “best selling designs”.
At the time of customers placing the order, availability of that particular
product plays a vital role and as much as 73.33% of the respondents believed
that availability of the products were either important or more than important.

5. Out of the total factors considered for research, Color/texture/design of the

product turned out to be the most significant factor for consumer in making a
buying decision. As many as 85% of the respondents believed that design
and texture are either very important or relatively important for customers in
making buying decision. The 1st basic impression on a customer is the
appearance of the product and then they look for other issues.

6. The perception for brand name as a buying decision was moderately

distributed. Brand name of a product is the most vital component of brand
equity. Since the entire trade is still under the process of being an organized
sector, the responses were scattered throughout.
25% of the responses were in favor of considering brand name as a very
important factor; while 20% each came under the important and neutral
category, while 18.33% considered it to be less important.

Q. Are you satisfied with the product range offered By Asian Tiles?
1. Very Dissatisfied
2. Not Satisfied
3. Neutral
4. Satisfied
5. Very Satisfied

21
For this question, the responses from only those dealers were considered who were
having significant product width and depth at their stores and were the major
dealers of Asian.
59% of the respondents believed that Asian offered a good range of products and
they were satisfied with the range offered.
24% of respondents were just about satisfied while 14% said that the company
further needed to diversify its product.
New products launched in 397mm x 397mm segment were also appreciated.
It was suggested that diversification in the lower end products would really be
appreciated.

Q. How do you rate the Brand Awareness of the Following Companies?.

Poor Below Average Good Excellent

Average
Asian Granito ❏ ❏ ❏ ❏ ❏
Kajaria ceramics ❏ ❏ ❏ ❏ ❏
Nitco Tiles ❏ ❏ ❏ ❏ ❏
Orient Tiles ❏ ❏ ❏ ❏ ❏

22
 Somani tiles ❏ ❏ ❏ ❏ ❏

For the purpose of brand awareness rating of different companies, qualitative

attributes like poor, below average, average etc were quantified as numbers from 1
to 5 in the following manner:-

1=poor
2=below average
3=average
4=good
5=excellent
Thereafter, weighted average mean for all the data were calculated to arrive at
following conclusions.
Kajaria with a weighted average mean of 3.95 which is equivalent to good, turned
out to be most known brand.
With aggressive ad campaign, they are the most sought out brand and are well
known even by people not much related to the sector or product.

23
 Orient and Nitco were found to be just about average known brand,
whereas Johnson was rated as above average brand.
The report on Asian was not so encouraging as it was rated at 2.63 which is
somewhere between below average and average.

It is therefore highly recommended to give emphasis on various promotional

campaigns through different channels so as to increase the brand awareness of
Asian tiles.

Q. Which Quality is Demanded Maximum by the Bulk purchaser/contractors?

(Please Rank as 1, 2 and 3. maximum Demand as Rank 1 as so on.)

• Premium/1st quality __________

• standard/2nd quality __________
• utility/3rd quality __________

24
From the data collected to this question it was found that 42 dealers(70%)
believed that premium quality was at maximum demand and 1st choice of
preference,whereas 26% believed standard or second quality as 1st choice
preference.

Around 52% of respondents believed that standard/2nd quality was the second
choice of preference, 26% stated that premium quality was 2nd preferred choice and
22% believed that economy or 3rd quality was the second choice of preference.

Economy or 3rd quality is neither much produced nor much consumed and an
obvious result shows that 75% of the dealers suggested it to be the 3rd preferred
choice.
Dealers informed that the premium quality was in high demand with increased
quality awareness and was extensively used for malls, households and various
other projects.

Q. How do you Rate the Client Relationship management of Asian Tiles?

1. very good
2. good
3. Average
4. Poor
5. Very poor

25
Client/customer relationship is another important aspect of brand equity.
A good association with clients results in smooth functioning of the entire trade
process.
From the survey it is found that 43% of the respondents believe the CRM practice
of Asian is just about average while 20% states it to be very good.
30% of the respondeds are satisfied and finds the CRM practice as good.
Only 7% of the dealers find it to be below average, which can be controlled by
effective day to day communications and dealer visits.

Q. What is the Customer Demand for the Following Flooring Sizes?

High Average Low No demand

Demand Demand Demand
300mm x 300mm ❏ ❏ ❏ ❏
405mm x 405mm ❏ ❏ ❏ ❏

26
 618mm x 618mm ❏ ❏ ❏ ❏
808mm x 1212mm ❏ ❏ ❏ ❏

The responses to this question were not uniform mainly because:

The dealers were not trading in all sizes produced by different tiles making
companies.

The customers of vitrified and wall tiles are unaware of the larger size goods
in the market. They only come to know about these sizes either after
noticing it in displays or through dealer’s information.

Therefore it turned out to be an open ended question where the demand for
618mm x 618mm (24 inc. x 24 inc.) was found to be maximum and not
much scope for bigger sizes were available in the near future.

Q. What do you think are the Major Threats / challenges to Vitrified Tiles
Industry?

This was an open ended question in which the major dealers suggested that a large
import from Chinese ceramic market, which is the largest in the world, is the
biggest threat to Indian ceramic Industry which is still in developing stage.

Majority of respondents suggested that natural stones like marble, Granite & other
stones are still the preference for a large set of customers as these stones are
associated with durability and other benefits.

Investment and
Efforts have been made to make ceramics look more natural but still the
technology have a long way to go match the durability of natural stones.

Profitability analysis
of major organized
Ceramic Tiles
Players. 27
Financial analysis determines the viability of a business. While it is related to
accounting, it's focused on looking at the business or market sector as a whole
and attempting to figure out how it will behave in the future.
Several ratios and profit indices have been selected from the Audited financial
statement, year ending 2010 so as to compare the position of Asian Granito
India ltd. As to its peers and major competitors, namely

• Kajaria ceramics
• Nitco tiles &
• Orient Ceramics

* Note: Only Listed Companies have been taken into Consideration.

Profitability and Investment Valuation of the Organized Players

28
1.Return on equity measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have invested.

ROE is expressed as a percentage and calculated as:

29
 Return on Equity = Net Income/Shareholder's Equity

Thus from the graph we can analyze that the Return on equity (ROE) for Asian
Granito is maximum at 13.57 followed by Orient Industries which is at 12.13

Kajaria, which is the biggest organized player after HSIL, have comparatively
lower ROE at 5.49 followed by Nitco at mere 4.81.

An Investor always prefers to Invest where they perceive maximum returns on

their Investment, and the current scenario shows a good positive sign for Asian
Granito and Orient Industries.

2. Dividends may be in the form of cash, stock or property. Most secure and
stable companies offer dividends to their stockholders. Their share prices might
not move much, but the dividend attempts to make up for this.
Dividend is calculated as a % of face value of the share.

Here we see that Kajaria have the highest Dividend payout % of 50,but should
also be noticed that the face value of the same is only Rs 2/- i.e. Rs 1 on each
share which is low against its market value of Rs 62.
Asian on the other hand along with Nitco,have paid out 10% dividend i.e. RS 1/-

High-growth companies rarely offer dividends because all

of their profits are reinvested to help sustain higher-than-average growth, one of
the major parameter of Dividend policy. But in the current scenario with restricted
growth, Companies are opting to Pay out some amount rather than Reinvesting so
as to meet the shareholders expectations.

3.Net profit margin is the total of net profit after taxes divided by the total
revenue or sales.
Profit as we know is the reward for the risk taken by the enterprise.

30
 Form the data we have we can find that Asian is having the highest Net Profit
Margin at 7.46 when compared to the other Players whose net profit margin lies
between 1 to 4,which states a sound business tactics by Asian tiles.

Surprisingly, Kajaria being the market leader have the lowest

Net Profit margin at 1.32, but in some cases, lower profit margins represent a
pricing strategy. Some businesses, especially retailers, may be known for their
low-cost, high-volume approach. In other cases, a low net profit margin may
represent a price war which is lowering profits, and in Ceramic Industry, with
threats by Chinese cheap and efficiently made tiles, Indian ceramic companies
have begun to feel the price reduction pressure as well.

4.Market price is the current price at which an asset or service can be bought
or sold. Economic theory contends that the market price converges at a point
where the forces of supply and demand meet.
The market price as on 14th June for Kajaria ceramics is Rs 62.55 and that of
Orient and Asian is Rs. 69.25/- & 57.15/- respectively, but with the face value
of Kajaria at Rs 2/- it is definitely the market leader. Whereas the face value of
Asian, orient and Nitco are Rs 10/- each.

This signifies that even after paying 50% dividend, Kajaria still has the highest
market value. Normally after paying huge dividends, the market value tends to
fall not to be in the case of Kajaria ceramics.
The Market price depends upon several other factors such as Bonus issue,
market capitalization, demand supply situation etc.
The market price of the other players including Asian seems to be constant over
a longer period of time.
1. EPS (Earning per share) is the portion of a company's profit allocated to each
outstanding share of common stock. Earnings per share serve as an indicator
of a company's profitability.

Calculated as:

Net income – Dividends on preferred stock

31
 Average outstanding shares

Earnings per share is generally considered to be the single most important variable
in determining a share's price. It is also a major component used to calculate the
price-to-earnings valuation ratio.

Here, we see that the EPS of Asian and orient tiles are high as Compared to Kajaria
ceramics and Nitco (which is negative).

Higher EPS determines better utilization of shareholders fund in generating profits

and earnings. Thus it can be stated that on the financial front, Asian tiles which
have given a high EPS of 9.22, have justified the investors decision to invest in the
company. High EPS always attracts Investors as they always aspire for maximum
return.

But, EPS is not the sole factor for investment decision. Operating and profit
margins, cash-flow, revenue growth, debt/equity etc are other important parameters
for Investments.

6.PE ratio is given by

Since the P/E ratio is calculated with the help of EPS or earnings per share,we can
see that Kajaria ceramics again have the highest P/E ratio at 12.6,where as Nitco
tiles have a highly negative P/E ratio of (16.31) , Asian and orient seems to have a
moderate P/E ratio at 6.03 and 6 resp.
P/E ratio is an effective investment analysis tool, but sometimes P/E ratio appears
to be much higher just due to the overpriced market value of the share,as of in case
of Kajaria,where P/E ratio is high but face value is only 2/-

32
 Swot analysis

&
Recommendations

SWOT ANALYSIS

Strengths
• Consistent growth of 12-15 percent in spite of
Slowdown in economy.

33
• The Indian ceramic export market is rising at the
rate of 15 percent per annum.

Weakness
• Not much importance given on brand building
and network thus creating hindrance for export
growth.
• Low per capita consumption (0.15 sq.mt. p.a.)
as compared to developed nations.

Opportunities
• The construction and Housing Boom to provide
bolstering demand for ceramic tiles.

• The untapped rural market supported by a

strong growth witnessed by Indian Agriculture
provides tremendous potential for the domestic
ceramic manufacturers.

Threats

• Freight, supply of power and gas remains the

key cost-related issues impacting the industry.

• Basic Customs Duty on import of ceramic tiles

from China and raw materials imported from
abroad should be corrected to prevent dumping
of tiles from China.

Recommendations

BRANDING:

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 • Asian granito may introduce a specific dedicated team to look after the
overall brand equity. They will ensure that all showrooms and dealer
display centers were in synchronization with the Asian profile. Also they
will look after the external packing material which creates an eye on look-
and-feel, resulting in a holistic branding approach.

• More focus on Research and design-development activities to achieve the

cost and product design leadership.

• More TV ads and commercials so as to increase greater awareness.

MARKETING:

• Should adopt the widest distribution network model to deliver products to

the end user in quickest and most effective way. It would also accelerate the
sales. It may include company owned showrooms, franchises, multi-product
dealers and sub-dealers.

• May introduce three dimensional catalogue visual experiences to its

customers and also give customer a chance to design product in their own
way of choice (customized design specification).

• Setting up exclusive showrooms for special products instead of keeping with

with the regular range.

• More introductions of lower segment matching wall and floor tiles.

• To grow its institutional business, the company should organize more

interactions with architects, developers and government agencies at its
dealer outlets. This would serve a dual purpose: it would enable the
company to acquire an insight into evolving preferences of some of the most
prominent and trend- influencing architects; on the other hand, it helped the
company cater to their evolving preferences.
BIBLIOGRAPHY

For primary data-

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 • Questionnaire

• Supervisor’s advice and information

For secondary data-

• KRC report

• www.icctas.com

• Moneycontrol.com

• Company website

• Previous summer training projects &

• Annual reports.

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