1ST - 31ST May 2016 . Vol 3 Issue 4. For Private Circulation Only
pg 32. INTERVIEW: Mr Rakesh Singh
pg 35. Indian Economy – Trend indicators
pg 37. PhillipCapital Coverage Universe – Valuation Summary
3GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 2
1st Apr 2016 Issue 3 1st Mar 2016 Issue 2
1st Jan 2016 Issue 1 1st Dec 2015 Issue 9
1st Dec 2015 Issue 8 1st Nov 2015 Issue 7
VOL 3 . ISSUE 4 . 1ST - 31ST MAY 2016
Vineet Bhatnagar- Managing Director and CEO
EDITORIAL BOARDNaveen Kulkarni, Manish Agarwalla, Kinshuk Bharti Tiwari
COVER & MAGAZINE DESIGN Chaitanya Modak, www.inhousedesign.co.in
EDITORRoshan Sony
RESEARCHBanking, NBFCsManish Agarwalla | Pradeep Agrawal | Paresh JainConsumerNaveen Kulkarni | Jubil Jain | Priyam ToliaCementVaibhav AgarwalEconomics Anjali Verma Engineering, Capital Goods Jonas BhuttaInfrastructure & IT ServicesVibhor Singhal | Shyamal DhruveLogistics, Transportation & MidcapVikram SuryavanshiMidcap Amol RaoMedia Manoj Behera | Naveen KulkarniMetals & AutomobilesDhawal Doshi | Nitesh Sharma | Yash DoshiOil & Gas Sabri HazarikaPharmaceuticals Surya Patra | Mehul ShethTelecomNaveen Kulkarni | Manoj Behera
PORTFOLIO STRATEGYAnindya Bhowmik
TECHNICALSSubodh Gupta
PRODUCTION MANAGERGanesh Deorukhkar
MID-CAPS & DATABASE MANAGERDeepak Agrawal
SR. MANAGER - EQUITIES SUPPORTRosie Ferns
FOR EDITORIAL QUERIESPhillipCapital (India) Private Limited No. 1, 18th Floor, Urmi Estate, 95 Ganpatrao Kadam Marg, Lower Parel West, Mumbai 400 013
SALES & DISTRIBUTION Ashvin Patil, Shubhangi Agrawal, Kishor Binwal, Bhavin Shah, Ashka Gulati, Archan Vyas
CORPORATE COMMUNICATIONS Zarine Damania
Ground View - Previous Issues
3GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 2
4. COVER STORY: Indian tile industry: Playing field levelling out
Ground View examines the Indian tile industry and the meteoric rise of the unlisted players from Gujarat
32. INTERVIEW: Mr Rakesh Singh
President Marketing, at The India Cements, south India’s largest cement company and one of the leading ones in India.
35. Indian Economy – Trend indicators
37. PhillipCapital Coverage Universe: Valuation Summary
CONTENTS
Gujarat and Gujarati’s have long been synonymous with en-
terprise. It comes as no surprise that three of the richest Indi-
ans hail from this community. Our May issue of Ground View
delves into one such global ‘Gujarati’ success story -- that of
Morbi’s tile industry and its champions, most of whom are
first-generation entrepreneurs that built world-class compa-
nies from scratch.
With a large population and increasing urbanisation, build-
ing materials has seen a sharp growth trajectory in terms of
revenues and profits and market capitalisation as well. No-
where is this more evident than in the case of tile companies
like Kajaria and Somany Ceramics. Increasing scale, improv-
ing cash flows, and strong return ratios have seen this sec-
tor and stocks outperform the broader markets over the last
decade. India’s population of more than 1.25bn people has
generated favourable tailwinds, which have not only benefit-
ted these larger and listed players, but an entire pack of mid-
and small-sized companies, which were hitherto unknown.
Our cover story peers into the world of the ‘other’ tile com-
panies that have so far existed in the shadows of their larger,
listed peers. Our analysts, Amol Rao and Deepak Agarwal
travelled to Morbi to meet with the people behind these re-
markable tile companies to understand their journeys and
their sense of the future. These interactions provide not only
valuable insights into the birth and growth of a top-notch set
of companies, but also serve to affirm the belief that with
concerted efforts, manufacturing in India is capable of attain-
ing ‘best-in-class’ and ‘best-in-price’ competencies. Confir-
mation of this came from exchanges with other stake holders
in the value-chain including dealers, architects and devel-
opers. Short-term economic cycles and a sluggish economy
notwithstanding, the Indian tile industry, and mid-sized man-
ufacturers in particular, are at an inflection point with all the
makings of another interesting decade.
Also read in this issue –- a free-wheeling interview with Mr
Rakesh Singh, President (Marketing) of The India Cements,
south India’s largest cement company and one of India’s
leading ones, where he talks about the current state of the
market in southern India.
Best Wishes
Vineet Bhatnagar
From the MD
5GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 4
Indian Tile IndustryPlaying field levelling out
5GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 4
COVER STORY
BY AMOL RAO & DEEPAK AGARWAL
pg. 7 Quick primer: Key growth enablers ____________________________________________pg. 10 Tiles: The Indian market place: The competitive landscape in India ____________________________________________pg. 11 On the ground: The Morbi Factor____________________________________________ pg. 15 Unlisted tile manufacturers: Charge of Light Brigade! ____________________________________________ pg. 17 Market feedback: Frankly Speaking____________________________________________ pg. 25 Outlook: Future “Tense’ or Future ‘Perfect’: Which is it to be? ____________________________________________
The Mango Man’s (Aam Aadmi’s) Capex
“Chaan aahe na? (nice, isn’t it?),” enquired Dr Dnyandeo Patil of his under-construction retire-
ment home in Zombadi village, Chiplun (Ratnagiri district of Maharashtra). He is in the process
of outfitting the interior of his 4,000 sq. ft. house (mansion by Mumbai standards) with pol-
ished and glazed vitrified tiles (PGVT) and the terrace and walkway with unglazed porcelain
tiles. At Rs 60-70/sq. ft., this is no cheap spend! The winner – a brand of tiles that belonged
to an unlisted, but reputed Gujarat-based player. For the GV team, this conspicuously lavish
household capex in rural India turned a routine trip to purchase the famous ‘Ratnagiri hapus
(alphonso)’ into an intriguing fact-finding mission about the status of the ceramic tiles indus-
try.
Insatiable curiosity led the intrepid GV team to the supplier of these tiles – Mr Malani of M/S
Malani & Sons. “Abhi toh PGVT tiles sabse zyaada chalte hai, finish aur variety bahut acha
hai(today PGVT tiles are in vogue, the finish and choice of products is unmatched),” he said.
Better durability and lower costs of installation compared to other forms of flooring were
also compelling factors as far as cost-sensitive but quality conscious rural customers are con-
cerned. Further into the conversation, he casually revealed that his enterprise had an annual
turnover in excess of Rs 75mn, with a sizeable chunk from unlisted brands!
Which led to the following questions - Is this a flash in the pan limited to the cash-cropping
and wealthy, Konkan belt or a nationwide phenomenon? Are unlisted Indian brands (from the
famed town of Morbi) really that good?
What followed was an extensive road trip and meetings with listed and unlisted companies,
interviews with dealers and architects, and interesting conversations with end users – which
resulted in this GV on the Indian tiles industry.
7GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 6
Despite the sluggishness of the Indian economy, particularly
the real-estate construction space, the domestic tile industry
continues to grow at 12-15% per annum. Driven by individual
construction in hinterlands and government spending on the
social sector, the Indian ceramic tile industry achieved a size
of ~Rs 250bn and 760mn square meters (msm) in CY15.
India is the third-largest tiles market in the world, accounting
for about 7% of global production. A cursory glance at the
production and consumption statistics reveals some interest-
India’s production of tiles is seeing a CAGR of 13%, higher than China and Brazil’s growth.
World production CAGR of 6.4% over CY08-14
Indian Ceramic Tiles industry: A snapshot
ing details – while global tiles production CAGR over CY08-
14 was 6.4%, the Indian industry’s was 13%. During the same
period, the domestic rate of growth in production overtook
China’s 10% and Brazil’s 4%.
In the same period on the consumption front, India’s appe-
tite for tiles has seen a CAGR of 11%, indicating increasing
exports. As with demand, growth in domestic consumption
outpaced China’s 10% and Brazil’s 6%
Global tile production (%) Global tile consumption (%)
Sour
ce: I
ndus
try D
ata,
Kaj
aria
Cer
amics
7GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 6
Sour
ce: I
ndus
try D
ata
Sour
ce: I
ndus
try D
ata
Key growth enablers
Q U I C K P R I M E R
1. Changing consumption patterns
Over the past decade, the Indian market has seen a strong
structural shift in terms of consumption pattern of tiles driven
by variables such as innovation, price efficiency, and installa-
tion costs.
2. Favourable mathematics
Over the past decade and half, ceramic tiles of all hues (solu-
ble salt, vitrified, PGVT) have found an increased acceptance
over traditional Indian flooring materials such as marble,
kota stones, granite, and mosaic). Competitive per-unit costs
of purchase, lower installation cost, shorter lead times to
delivery, and ease of installation, are key variables influencing
purchase decisions in favour of tiles.
Value chain in tiles (India)
India tiles industry: Segmental volumes India tiles industry: Segmental value
Tile Industry: Structural shift towards vitrified tiles
9GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 8
3. Moving up the value chain
The upward migration in the ceramic-tiles value chain is most
visible in its segmental consumption – while volumes of the
domestic tile industry saw 10% CAGR in CY09-14, polished
vitrified tiles (PVT) and glazed vitrified tiles (GVT) CAGRs
were 14% and 23%. Increasing affordability and a wider
variety have seen consumers upgrade their choices from a
decade and half ago.
4. Low per-capita consumption
The potential for the industry is significant, considering the
low per-capita consumption of ceramic tiles in India – at 0.59
sq. mt. per person vs. more than 2 sq. mt. per person in
countries such as China, Brazil, Vietnam, and Iran.
Indian tile consumption: At the lower end vs. developing countries
Distribution of Households by Household size - India
Household Size (%) Total Rural Urban
2001 2011 2001 2011 2001 2011
All Households 100 100 100 100 100 100
1 3.6 3.7 3.5 3.7 3.7 3.6
2 8.2 9.7 8.2 9.8 8.2 9.5
3 11.1 13.6 10.4 12.6 12.7 15.9
4 19 22.7 17.7 21 22.4 26.4
5 18.7 18.8 18.5 18.9 19.2 18.5
6 - 8 28.1 24.9 29.6 26.9 24.4 20.6
9 + 11.3 6.6 12.2 7.2 9.3 5.4Source: Census 2011
5. Rising incidence of nuclear families
With the average Indian household size expected to decline
to about 4.4x from 4.8x, demand for housing units is expect-
ed to increase by ~10mn units (Source: Kajaria FY15 Annual
Report). With ~35% of India’s population between 15-35
years, demographics seem to support housing demand driv-
ing consumption of tiles over the next 15 years.
6. Continuing urbanisation
With ~10mn people moving to Indian cities each year and
per-capita income in urban India expected to treble to
US$8,300 in 2028 from US$2,800 in 2012, the construction
of new housing units is a likely source of demand for tiles
(Source: Kajaria).
Interactions with architects, real estate developers, tile manufacturers, and government agencies showed that there is solid growth argument for the domestic tile industry.
Sour
ce: K
ajar
ia C
eram
ics
High end Chinese tiles being sold in Mumbai
9GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 8
Flooring Material Use (%)
India Rural Urban
1991 2001 2011 2001 2011 2001 2011
Mud 67 57 47 72 63 18 12
Stone - 6 8 5 6 9 12
Cement 21 27 31 18 24 48 46
Mosaic/Floor tiles 4 7 11 2 4 21 26
Others 8 3 4 3 3 4 4 Source: Census 2011
Increasing use of tiles as flooring material in India
Rates (Rs. Sq ft) Marble Tiles
Unloading at Site 8-10 4-5
Laying labor cost* 20-25 10-15
Laying material cost* 60-90 40-50
Polishing 10-20 Nil
Total 98-145 54-70Note: Rate Varies from Location to Location *Laying Italian marble is even more expensive.
Source: Industry, Phillipcapital
Cost differential in installation of flooring material
Government policies Details Tiles industry optimism
Swachh Bharat Abhiyan To build 60mn toilets across the country by 2019 Envisaged demand of ~279msm
Smart Cities Covering 100 Smart Cities -(will construct approxi-mately 5mn new houses)
Construction of new structures to utilise ~92.9msm
Housing for all by 2022 To build 110mn houses by 2022 Requirement of ~1533msm
New Real Estate Bill All builders will have to complete ongoing projects in the next year
-
Source: Industry Data, Phillipcapital
Government schemes that could influence consumption of tiles
7. Increasing government spend on the social sector
The implementation of several crucial policies should facili-
tate investment and accelerate construction activities. These
schemes aim to meet the needs of around 40% of India’s
population and hold significant promise for the prospects of
the Indian tile sector.
8. Ease of use
Other traditional flooring materials (marble, Kota stone, gran-
ite) still pose a formidable threat to tiles at the higher end
of usage. However, lower installation costs and uniformity in
quality have seen these traditional choices being replaced by
ceramic tiles in India over the past decade, especially in the
middle of the customer pyramid.
9. Better affordability
Economies of scale and lower fuel prices have seen a dramat-
ic reduction in production costs for ceramic tiles. Coupled
with an increase in average domestic disposable income,
ceramic tiles have found widespread acceptance as flooring
material.
Kajaria Ceramics store, Mumbai
11GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 10
The competitive landscape in India
T I L E S : T H E I N D I A N M A R K E T P L A C E
The ceramic tiles industry in India is highly frag-
mented with small and mid-sized players account-
ing for a large chunk of production. The larger
(mostly listed) peers (~14 players) account for Rs
120bn (48% of total value). Within these, Kajaria,
Somany, H&R Johnson, and a couple of other
players are established leaders with an estimated
share of ~40% of the total domestic production.
Mid-small players account for ~60% of the total
industry (by volumes) – indicating the immense
demand for tiles; 80% of these are located in the
Morbi region in Gujarat – a production hub of the
domestic ceramic industry. The town has ~600
manufacturing units, which includes ~60 large fa-
While some of the significant manufacturers in Morbi (~60% companies) are currently classified
as mid-sized players, their scale of operation and growth potential would see a change in
classification over the next few years
Composition of the Indian tile industry (in volumes) Market share of large players (%) FY15
Source: Industry
cilities of mid-sized players. The location accounts
for ~70% of the total production of ceramic tiles
in India, a large chunk of which consists of vitrified
and polished tiles.
The output of India’s tile industry, classified along
broad product lines consists of wall tiles (20% by
value), floor tiles (23%), vitrified tiles (50%), and
industrial tiles (7%).
No of players Large / listed Small / mid-sized / unlisted
Turnover (Rs. bn) 120 130
Capacity (msm) 310 465
Share in volume 40% 60%
No. of players ~14 ~600
Key players Johson,Kajaria,Som-any,Nitco
RAK,Simpolo,Swastik, Var-mora,Sunheart,Other
Source: Industry Data
Difference between listed and unlisted players
11GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 10
Its a typical, blistering April in Ahmadabad when we meet up
with Mr. Girish Patel, CMD of Swastik Ceracon. Welcoming
us with a broad smile and avuncular hospitality, he talked at
length to the GV team about the evolution and current state
of the Indian tile industry. Some excerpts of the conversation:
Sir, as a first generation entrepreneur, how did you enter
the tile-manufacturing industry?
I come from a farming family and lived in a small village in
Gujarat. I always had the desire to venture into manufactur-
ing, which motivated me to try my hand at diamond crafting,
followed by a photographic colour laboratory. When I got the
chance to partner in a tile-manufacturing venture, I grabbed
the opportunity. Spenta Cera Tiles Pvt. Ltd. was my first man-
ufacturing unit, after which I branched out on my own and
formed Swastik Ceracon.
How would you describe your journey so far?
Every stage of my journey has been a learning experience. In
my initial years, I learnt on the shop floor about the intricacies
of manufacturing and product costing. Rejection, production
loss, and operating losses are concepts that I learnt first-hand
in the factory. Then came cash-flow management and working
capital. Along the way came lessons in manufacturing quality
and customer management. Even today, I try to keep learning
from my customers, my colleagues, and my peers from the
industry. Learning is a never-ending process.
At Swastik Tiles, what instances would you recollect as
turning points for your company?
While every moment has been special for me, I think one of
the most memorable moments in our history was the com-
missioning of our vitrified plant in CY07. Another important
milestone was the introduction of digital wall tiles in CY11-12,
which put us on the global map. Lastly, our international sup-
plies (Cengres Tiles), which started in CY13 was also a proud
moment for all of us.
Today, what are the important facets of the Swastik Tiles
brand? What is the USP of your operations?
We are known for providing high-end products with a lot of
innovation, which offers a very high-value-for-money proposi-
tion. And for this, it is vital to be very cost-efficient and world-
class in manufacturing.
Operational challenges today are quite different from a
decade ago. Could you give some examples of this and
how you surmounted them?
With the advent of ink-jet technology manufacturing, printing
on tiles has become easy. By adopting the latest technolo-
gies, we have been able to increase the tempo of our op-
erations and have migrated from the laid-back, artist-centric
process, to a fast-paced technologically driven setup.
The Indian tiling industry is set for some good growth
over the next several years. What is your strategy for
capitalising on this opportunity?
In order to remain relevant, we have taken a conscious deci-
sion to invest in newer technologies. Simultaneously, we are
expanding our marketing reach, not only in India, but also
through the world.
What factors could jeopardise the prospects of the tiling
industry in India?
Any untoward political situation, slower pace of reform or
executive decisions, stagnation in the rural economy – all of
these have the ability to hamper prospects.
As a successful entrepreneur, what future developments
or changes are you preparing your company for?
I see overlapping of various technologies in the coming days
to bring about novelties – which are not easy to match by con-
ventional processes. I also see lots of potential in renovation
and adoption of ‘green’ products by users. We, at Swastik,
are always quick to adopt new technologies. Additionally, we
are increasing our efforts in R&D, and are consciously going
green in our operations. This would definitely help us to sur-
vive the onslaught of competition.
Interaction with Mr. Girish PatelMD OF SWASTIK CERACON
Perseverance & focus, these mantras have enabled us to learn & grow“ ”
13GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 12
The Morbi Factor
O N T H E G R O U N D
Morbi, in the Saurashtra region of Gujarat, is a hallowed
name in the annals of the Indian manufacturing sector.
Synonymous with the concept of cluster manufacturing
of tiles, it is not commonly known that earlier this town
held the distinction of being the largest producer of wall
clocks as well as CFLs in India.
The sheer variety of housing materials manufactured
here is breathtaking. Vitrified tiles for flooring and walls,
quartz stone and mosaic tiles, tiles for roofing and sanitary
ware – the town has manufacturing units for all these and
more. Morbi accounts for 70% of all ceramic tiles manufac-
tured in India and generates in excess of Rs 170bn in annual
revenues.
On the face of it, there is sound logic for the town’s emer-
gence as a global manufacturing hub:
1. Easy availability of raw materials: Key raw materials like
clay, red and black soil, minerals (calcite and wallastonite),
frits and glazes are abundantly available locally or from
the neighbouring state, Rajasthan.
2. Reliable supply of power: Almost all the units in Morbi
have access to dedicated supplies of gas for power.
Stable supply of power ensures minuscule downtime and
higher utilisation. This is a significant driver of operational
profitability.
3. Logistics: Morbi enjoys excellent connectivity to national
and state highways. This facilitates timely and cost-effec-
tive transportation of finished goods to most parts of the
country (barring southern India). Proximity to large ports
like Kandla and Mundra not only helps manufacturers
access markets in southern India (through shipments to
Chennai and Vishakapatnam) but also large, lucrative in-
ternational markets in the SAARC region and the Middle
Morbi: Distinct logistical advantage
Royal Enfield converted into a passenger vehicle in Morbi
Kandla Morbi
MorbiMundra
By road 2hrs 10min (137km)
By road 3hrs 18min (187km)
13GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 12
Morbi: Distinct logistical advantage
Code Company Name City State Code Company Name City State
AML Antique Marbonite Pvt. Ltd. Morbi Gujarat KCL Kajaria Ceramics Ltd. Mobi Gujarat
AGL Asian Granito (India) Ltd Sabarkantha , Gujarat MCL Murudeshwar Ceramics Ltd. Karaikal Pondicherry
CGT Coral Gold Tiles Pvt. Ltd Morbi Gujarat MCL Murudeshwar Ceramics Ltd. Hubli Karnataka
CGL Coral Granito Pvt. Ltd. Morbi Gujarat OGL Oracle Granito Ltd. Sabarkantha Gujarat
CTL Cengres Tiles Ltd., Dist. Mehsana Gujarat OCL Orient Ceramics & Industries Ltd Sikandrabad UP
ECL Euro Ceramics Ltd. Kutch Gujarat OVL Jaxx Vitrified Pvt. Ltd. Morbi Gujarat
GCL Gokul Ceramics Pvt. Ltd Rajkot Gujarat RAK R.A.K Ceramics India Pvt. Ltd. Samalkot AP
HRJ H & R Johnson Dewas MP RGL Regent Granito (India) Ltd. Himatnagar Gujarat
HRJ H & R Johnson Kunigal Karnataka SGL Senso Granito Pvt. Ltd. Rajkot Gujarat
HRJ H & R Johnson Pen Maharashtra SCP Sentini Cermica Pvt. Ltd. Krishna AP
HRJ H & R Johnson Karaikal Pondicherry SIC Silica Ceramics (P) Ltd. West Godavari AP
HRJ H & R Johnson Baddi HP SCL Somany Ceramics Ltd. Bahadurgarh Haryana
KCL Kajaria Ceramics Ltd. Sikandrabad UP SCL Somany Ceramics Ltd. Kadi Gujarat
KCL Kajaria Ceramics Ltd. Gailpur Rajasthan SVP Simpolo Vitrified Pvt. Ltd. Morbi Gujarat
SJT Spectrum Johnson Tiles Pvt. Ltd. Rajkot Gujarat UCL Umiya Ceramic Pvt. Ltd. Morbi Gujarat
STL Sunshine Tile Co. Pvt. Ltd. Rajkot Gujarat VGL Varmora Granito (P) Ltd. Rajkot Gujarat
SWC Swastik Ceracon Ltd. Dist. Mehsana Gujarat
Indicates presence of ceramic tiles industries.
Location of major ceramic tile-manufacturing units in India
Largely located in Gujarat
East.
But there’s more to it than meets the eye. To
borrow from Po (Kung Fu Panda), “There has to
be a secret sauce!” Ground Zero’s two-day trip to
Morbi to find out what makes the town tick was
not just exhausting, but also most instructive and
enthralling.
In a candid conversation with GV,
Mr KG Kundalia, (President, Morbi
Ceramic Manufacturers Association)
explained’ “Yaha sab co-operation
se chalta hai, sab ek dusre ki madad
karte hai (everything here in Morbi
operates on the principle of co-opera-
tion, everybody helps each other out)”
– which pretty much sums up how
the town has metamorphosed into
the second-largest tile manufacturing
cluster in the world in a short span of
two decades.
15GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 14
Housing close to 600 units of var-
ious sizes, manufacturing in Morbi
is dominated by the enterprising
Gujarati Patel community. Said Mr
Kundalia, “Akda-shastra hamare
khoon me hai (numbers are in our
blood)”. He alludes to the skill of
cost management, born out of a
centuries-old tradition of thrift. He
went on to cite numerous instanc-
es of operational frugality – such
as the fact that many companies
outsourced specific functions
like operational maintenance to
specialists for a fraction of the cost
to lower their opex, which would
otherwise have been paid to in-
house employees. Often, manufac-
turers borrowed spares from each
other rather than block capital in
expensive inventory. In some cases,
manufacturers outsourced produc-
tion of tiles to neighbouring facto-
ries due to saturation of their own
capacities, thereby boosting utilisation levels at their peers’
facilities. The end result has been competitive operational
costs and lower selling prices.
Mr. Jagdish Varmora of SUNHEART Tiles recalled the forma-
tive years of tile manufacturing in Morbi – “Twenty five years
ago, there was an inordinately
high proportion of manual
intervention in the manufacturing
process. We owners spent most
of our time on the shop floor,
managing labour and process re-
jection. It was very tough. There
was no other way out, except for
collaboration.”
Cooperation between various
players in Morbi extends much
beyond operational resources –
to the extent of sharing precious
capital. There have been several
instances where Morbi-based
promoters have funded equity
stake in competitors for capex.
This has bred a culture of knowledge and skill transfer –
transforming the region into
a global power house in tile
manufacturing. Little wonder
that the town today boasts of
being able to manufacture one
of the largest tile sizes in the
world (2m x 1m) with relative
ease, the highest density of
digital printers globally, and the
ability to match the operational
cost of manufacturing in China
(excluding logistics costs).
Says Mr Bhavesh Varmora (MD,
Varmora Granito), who has one
of the largest units in Morbi –
“Our core strength has always
been cost control. That’s the
reason why even established
brands in the country tie up with
us or source a sizeable portion
of their products from here. It is
merely a perception that we are
only cost warriors. If it weren’t
for our quality, we would have perished long ago.” He adds
almost as an afterthought, “It is this perception of not manu-
facturing world class quality that we are trying to change.”
His competitor, Mr Jagdish Varmoa of SUNHEART Tiles
agrees. Drawing from his vast experiences, he says, “We
have nearly halved our manufacturing costs to Rs 12-13/
sq. ft. over the past decade.
Rejection today is less than
2% across any product man-
ufactured in Morbi. None of
the larger brands can match
our costs, hence they buy from
us.” He adds, “We aren’t very
active on the marketing front,
that’s where we lag behind.
Unless we market ourselves to
consumers in a big way, they
won’t know about our products
and consciously ask for our
brands. And unless they don’t
consciously use our products,
they won’t realise our quality”,
he shrugs.
“Things are changing, these are all various phases of
Trends in advertising & marketing spends (%)
Morbi based players are spending more on visibility
Ad. for Simpolo Tiles in Jet Wings, in-flight magazine of Jet Airways
15GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 14
growth”, muses Mr. Girish Patel of Swastik Tiles, when ques-
tioned about branding and pricing power. “The first phase,
from the early nineties till 2000, was the toughest. Everyone
was equally inexperienced, focus was on cash flows and
survival. Manufacturing scale and quality were a far cry. The
next phase was from the start of the millennium to 2007-08
where everyone had stabilised operationally and turned their
focus on growth and balance-sheet improvement, along with
quality control on the manufacturing side. I believe the last
phase which has been in play since 2007-08 has been very
interesting, as all of us have expanded nationally in terms of
distribution reach.” He adds, “With everything now in place,
the focus for mid-sized players like us is towards improving
visibility. Branding will now be a play an important role for
Swastik as well as other companies from Gujarat.”
So is this the start of cut-throat competition, a classic ‘David
versus Goliath’ saga in the making? “Not at all – there’s
enough room in the market for everyone, whether branded
or unbranded”, concludes Mr. Parth Shah, CFO of Swastik
Tiles. He adds that only brands that have control on costs
and offer contemporary products at the right price will have
good market share. Today the customer is spoilt for choice,
so a brand will succeed only if delivers on its promise of price
and quality simultaneously.” It comes as no surprise then
that all four unlisted manufacturers that GV interviewed are
already ramping up branding and advertising budgets. One
cannot help but get the feeling that competitive intensity in
the Indian tiles market is set to move up a couple of notches.
This precipitates another question – who will be casualties?
Will larger, listed brands languish or will challengers fare
badly and shut down? Some interesting food for thought on
this – 15-20 enterprises shut shop every year in Morbi due to
various reasons, but rarely insolvency. “Bankruptcy toh yaha
1% se kam hai. Kabhi kabhi kuch karan se unit band karna
padta hai(instances of bankruptcy are less than 1% in Morbi,
there are several other reasons for closure”, says a promoter
of a large manufacturing unit. For every shutdown, new fac-
tories spring up to make up for the void – a testament to the
grit of the Patel promoters. While a definitive answer to this
would only lie with those equipped with tarot cards and crys-
tal balls, Mr Patel of Swastik Tiles summed it perfectly – “The
marketplace is the best teacher, and nothing is certain. The
only way to succeed is to be ready to unlearn and re-learn.”
Somany Capacity Profile
Plant Name/Location Owned/JV/Others Capacity (msm)
as %
Vintage - Morbi JV 2.55 4.3%
Commander - Morbi JV 4.76 8.0%
Vicon - Morbi JV 3.98 6.7%
Amora - Morbi JV 4.58 7.7%
Acer - Morbi JV 5.10 8.5%
Fine - Morbi JV 4.30 7.2%
Total JV 25.27 42.2%
Kassar Owned 17.13 28.6%
Kadi Owned 8.42 14.1%
Total Owned 25.55 42.7%
Other* 9.00 15.0%
Total Somany 59.82 100.0%
Kajaria Capacity Profile
Plant Name/Location Owned/JV/Others Capacity (msm)
as %
Soriso - Morbi JV 4.60 6.7%
Cosa - Morbi JV 5.70 8.3%
Jaxx - Morbi JV 10.20 14.9%
Taurus - Morbi JV 5.00 7.3%
Vennar - AP JV 2.30 3.4%
Total JV 27.80 40.5%
Sikandrabad- UP Owned 9.8 14.3%
Gailpur - Raj Owned 24.5 35.7%
Malootana - Raj Owned 6.5 9.5%
Total Owned 40.80 59.5%
Total Kajaria 68.60 100.0%
JVs by large listed tile companies - Morbi based players are a large chunk
Kajaria and Somany ~40% manufacturing is through JV model..
17GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 16
Charge of the Light Brigade!
U N L I S T E D T I L E M A N U F A C T U R E R S
Listed companies like Kajaria and Somany have long been
the face of the Indian tiles industry. Increase in scale, reach,
and visibility has enabled these companies to register a
superlative performance financially – something that is well
reflected in the improvement of their valuation multiples.
However, the past decade has seen the emergence of several
unlisted players from Gujarat. A tight grip over manufactur-
ing costs, focus on quality, and increasing reach are some of
the common threads that have enabled these companies to
rack up credible growth in market share and revenues. With
their eyes firmly set on becoming sizeable national brands
in the next decade, GV interacted with some of India’s best
mid-sized unlisted tile companies
SIMPOLO CERAMICS“There is no substitute for quality. Right from the days
of our legacy business of roofing materials four decades
ago, we have believed that quality would get us repeat
buyers”, says Mr Jitendra Aghara (CMD) of Simpolo.
With a reputation of superlative quality, Simpolo was
started by Mr Aghara in 1991. Today, it is one of the
most successful Indian tile manufacturers operating out
of Morbi. With a turnover of Rs 7bn and PAT margin of
12%, it is well regarded in the dealer community. The
company also has sizeable exports to markets in the
Middle East and Europe, which it plans to ramp up in
the coming years.
VARMORA GRANITOFounded in 1994, the company is currently headed by Mr
Bhavesh Varmora. It enjoys a reputation for having an ex-
tensive product range and is coming to be regarded as a
‘One Stop Shop’ in the domestic tiling market. “We have
a capacity of 115,000 sqm p.a. today, but we have sold
more than that because we are outsourcing from other
units in Morbi’, says Mr. Bhavesh Varmora, matter-of-fact-
ly. “We export all over the world; our revenues from
international sales are in excess of Rs 1.7bn this year”, he
adds, with a dash of pride. With annual sales of ~Rs 10bn,
Varmora Granito is in the process of installing India’s long-
est tile kiln (292m) at one of its facilities in Morbi.
Significant automation and minimal human intervention at Simpolo Ceramics are reasons for lower costs and higher quality
17GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 16
SUNHEARTSunheart Tiles: Sunheart is the largest ceramic
tiles exporter from India. From a turnover of ~Rs
1.67bn in FY09 it has risen to clock revenues of
around Rs 7bn in FY16. “We have achieved this
scale purely through our relentless pursuit of qual-
ity, state of art manufacturing, and the firm resolve
of our team”, says Mr. BG Varmora, the Chairman.
The company holds the distinction of being the
first manufacturer to produce porcelain tiles of
1215x605 mm size in India with digital printing
technology – this makes it the world’s largest
digitally printed tile. It has a channel of more than
500 dealers in ~28 cities and exports to more than
25 countries.
exports to Europe, which undergo strict quality and other
procedural audits by international agencies. “We have always
passed these checks with flying colours”, says Mr. Patel. The
company is now focusing on improving penetration in do-
mestic markets and is increasing its marketing and ad spends
towards this.
SWASTIK CERACON“We started with Rs 15mn of capital in 1995. It was very
tough from 1996-2001, but we never gave up”, says Mr
Girish Patel, CMD (Swastik Tiles), with a hint of nostalgia.
Swastik registered a turnover of ~Rs 4.5bn and PAT margin
of 2% in FY15. Interestingly, the company has white-label
Proj
ect s
ales
offi
ce in
subu
rban
Mum
bai
India’s largest tiles ready for despatch at SunHeart, Morbi
19GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 18
Frankly Speaking
M A R K E T F E E D B A C K
Region
States
No. of Projects under Construction in India Geographical Break up of Sample Size
In Units In % In %
North Delhi 42 1.84% 4.2%
North Rajasthan 106 4.63% 12.5%
North Uttar Pradesh 227 9.93% 10.4%
North Total 375 16.40% 27.1%
West Maharashtra 558 24.40% 45.8%
West Gujarat 64 2.80% 2.1%
West Total 622 27.20% 47.9%
South Karnataka 274 11.98% 6.3%
South Tamil Nadu 223 9.75% 6.3%
South Telangana 112 4.90% 6.3%
South Total 609 26.63% 18.8%
East West Bengal 89 3.89% 6.3%
East Total 89 3.89% 4.3%
Total 1,695 74.11% 100.0%
Construction sector survey
In light of the significant construction activity all over India and the number of stake-holders involved, it was imperative to seek a balanced opinion of the state-of-affairs by interacting with all parties. These included developers, channel partners, and architects, all of whom play a vital role in determining the fortunes of domestic tile companies.
Architect Builder Dealer Total
North 4.3% 2.1% 21.3% 27.7%
West 17.0% 6.4% 23.4% 46.8%
South 4.3% 0.0% 14.9% 19.1%
East 0.0% 0.0% 6.4% 6.4%
Total 25.5% 8.5% 66.0% 100.0%
In the tile industry, dealers have become more stronger (top-100 dealers have a revenue of more than Rs1bn per annum)
by Mr. Tapan Jena (Industry Expert, CEO SunHeart)
Breakup of survey sampleSo
urce
: CM
IE, P
hilli
pCap
ital
19GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 18
Tiles Only Tiles & Sanitary Ware Total
North 11.1% 15.6% 26.7%
West 11.1% 35.6% 46.7%
South 4.4% 15.6% 20.0%
East 4.4% 2.2% 6.7%
Total 31.1% 68.9% 100.0%
Listed Unlisted Both Total
North 6.7% 4.4% 15.6% 26.7%
West 6.7% 11.1% 28.9% 46.7%
South 6.7% 0.0% 13.3% 20.0%
East 2.2% 0.0% 4.4% 6.7%
Total 22.2% 15.6% 62.2% 100.0%
Dealer comments:
- Players from Morbi were supplying all type of quality. The range and designs of tiles varied from ~Rs30-100 per sq.ft depending on quality, design, color and brand
Q3. Is there any quality difference between listed and unlisted players?
Q2. Are you selling/consuming tiles of listed, unlisted players or both?
Q1. Do you deal in Tiles only or sanitaryware as well?
21GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 20
Dealer comments:
- Average price difference between listed and unlisted players is 10-12%
Dealer comments:
- Unlisted players (Morbi and China) are more aggres-sive in new product launches. The initial launches are by global players from Italy and China , then Morbi players follow, then the listed players.
- India’s largest tile (6*4 feet) was first launched by a Morbi player – Sunheart
- India’s strongest tile was launched by Simpolo, another Morbi player
- Listed players launch new products, but with a lag of 5-6 months.
Dealer comments:
Dealer margins are similar between listed and un-listed players, largely due to unlisted players’ lower product.
- Some unlisted players offer better margins to push sales.
- Margins depend on the size of the order.
Q4. Is there any difference between listed and unlisted players’ products prices and how much?
Q5 Is there any difference between the dealer margin of listed and unlisted brands?
Q6. Who launches new products more frequently in the market – listed, unlisted or both?
21GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 20
Dealer comments:
- On an average, channel partners stock more products of unlisted players, Chinese, and Italian tiles due to the variety in range and price
Some interesting takeaways:
- Branded players were able to effect project sales without much marketing - Many people are aware that most tiles are manufactured in Morbi, either through outsourcing or JV . Hence, the design and price are clinchers at the point of sale.- Brand comes after product selection (So not much impor-tance)
Dealer comments:
- Demand is coming from residential projects, which include individual houses, replacement demand, and some small builders. - Commercial projects are few and far between- Government projects are also picking up – but are supplied to directly by companies
Dealer comments:
- Slow market: only some builders with strong balance sheet are constructing. This movement will continue going forward for next 1 years- Fewer large projects are being developed; only ex-isting or ongoing projects are alive.- There is some demand from individual consumers
Q7. What portion of shelf space / usage consists of unlisted /listed tiles?
Q8.Do brands play an important role?
Q9.How is the overall market shaping up? Q10. Which sectors are contributing to growth?
23GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 22
-
QUOTE - UNQUOTESome interesting tit-bits from GV’s interactions across the country
“Thoda slow toh hai (business is indeed slow),” says a Mum-
bai based dealer matter of factly. “But it isn’t as if business
has stopped”, he adds quickly. Metros across the country
reflect this scenario. Smaller constructions, coupled with
staggered purchases by builders (depending on individual
liquidity) have seen tile dealers and distributors growing at
a slower clip in the recent past. From the break-neck dou-
ble-digit growth of 2-3 years ago, a more conservative 8-10%
increase in revenues is what most channel partners are regis-
tering at the moment.
Hertz-Avis Redux?
“Chota hai toh kya hua, bhaav aur quality main toh yeh sab
world class hai (so what if they’re smaller companies, their
quality is world class),” said a dealer from Nashik.
With prompt service and comparable quality, homegrown
Gujarat brands like Varmora, Swastik, and Simpolo were
trying harder to win market share through improved business
practices like shorter turnaround time, prompt deliveries and
equitable trade terms. While the quality of products offered
were comparable to
larger, listed peers,
it was on servicing
that they seem to
be going the extra
mile. Dealers and
architects alike were
unanimous in their
feedback that Gu-
jarat-based compa-
nies have stepped
up follow-ups and
servicing over the
past few years and
are faster in closing
sales compared to
larger, listed brands.
This seems like a
replay of the famous
Hertz- Avis rivalry of yesteryears, wherein the smaller player
opted to highlight the improved quality of its servicing in-
stead of targeting the larger established competitor.
Horses for courses
While larger listed players have a vast repertoire of tiling
products, smaller, unlisted manufacturers are not far behind.
With the flexibility to customise the size of the tiles and
monthly introduction of new designs, they have carved out a
reputation for tailoring their products to match specifications
of architects and builders. “Quality and delivery were as per
specifications. The finish was superb”, replied a mid-sized
builder from Maharashtra. About the quality of the product
from a smaller brand he said that, “While the product costing
was very competitive, their speed and efficiency was amaz-
ing”.. Apparently, the adoption of digital printing technology
has enabled manufacturers today to close out supplies of
even smaller batch sizes, making them more amenable to
customizing for relatively sized orders.
Show me the money!
“Cash is always King”,
says Mr Aghara of
Simpolo Ceramics,
from Gujarat. Sales
were being made
against advanc-
es in many cases,
something which an
overwhelming majority
of dealers confirmed.
With the appetite
for counter-party risk
down dramatically,
credit offered by tile
manufacturers has
shrunk to 15-30 days,
from 30-45 days
Exquisite printed tiles, (~Rs 45,000/set) ready for despatch
23GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 22
-
previously. This practice has also been adopted by most tile
dealers on a pan-India basis, since they are becoming averse
to lending their liquidity to contractors/builders.
Chinese dragon being contained
Anti-dumping duty (levied a couple of weeks ago in Mar’16)
is forcing stockists of imported tiles to liquidate inventory.
With US$ 1.37/sqm of punitive duties on glazed, unglazed,
and porcelain tiles, imports are expected to subside – espe-
cially in the southern parts of India.
“Demand for Chinese tiles in the luxury/super-premium cate-
gories is relatively price insensitive – these will remain. It is in
the premium and economy ranges that the difference will be
felt”, says Ronak, a dealer of imported tiles into India. “It is
only in the economy range of tiles in southern India that the
impact will be really noticeable”, he adds.
This view was endorsed by all kinds of domestic tile manufac-
turers – they are upbeat about the revival of sales, especially
since southern India is a sizeable and stable market.
What’s in a name? Apparently, quite a bit!
With all manufacturers usually carrying out ‘point-of-sale’
promotional activities, smaller brands are stepping up their
game. Branding and advertising is now a top priority, as man-
agements of several smaller unlisted companies are keen to
increase brand awareness and visibility at the pan-India level.
Traditional media aside, focused
efforts are being made through
advertisements in business and
trade magazines. Participation
in trade shows and organising
specific events also seem to be
picking up. The use of social
media is also rising, with few
Gujarat-based brands encourag-
ing interactions through plat-
forms like Twitter, Facebook, and
Instagram.
Variety is the spice of life
Design additions in the tile port-
folio have now become a regular
feature every month, with 3-4
new designs being introduced
by companies on an average, every quarter. “Indian taste is
now sophisticated. Being contemporary is the name of the
game”, says Mr. Muthuraman of Lakshmi Ceramics, Coim-
batore. “If we’re not spoiling the customer for choice today,
we’re doing something seriously wrong”, he adds, emphasis-
ing the importance of breadth in product offering. This was
a common refrain across most channel partners in the tile in-
dustry. While international companies usually introduce new
patterns and designs every six months, companies operating
out of Gujarat usually introduce these every quarter and at
numerous SKUs. Larger domestic brands
usually follow suit in a couple of months.
Discipline, discipline, discipline!
The mantra is loud and clear for companies
like Simpolo Ceramics, Swastik Tiles, and
Varmora Ceramics who are currently just be-
low the Rs 10bn threshold for annual sales.
A strict control on the rejection rate, focus
on value-added products and lean manu-
facturing set up are some ingredients that
these companies are focusing on to make
the leap into the big league. “If we don’t
continuously streamline operations, we risk
losing out on opportunities in the future”,
says Mr. Girish Patel (M.D.), Swastik Tiles,
very succinctly.
Wood finished tiles are the rage currently and sell very well
Printed wall tiles with contemporary designs on display in Ahmedabad
25GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 24
Indian Tile EXIM trade: A transforming equation
Imports into India: Imports into the country paint an interesting
picture. While the upper-end of the premium range consists of
Chinese tiles, Italian and Spanish tiles make up for a vast major-
ity of imports at the luxury end. Accounting for about 8% of the
overall Indian market in CY15 (by volume), Chinese tiles were
being shipped in large quantities to southern India until recently,
given the freight disadvantage encountered by local compa-
nies in inland transportation. However, the recent imposition of
anti-dumping duty (ADD) on Chinese imports could see these
imports reducing gradually.
Increasing export focus: With domestic production outpacing
demand by a few percentage points, Indian tile manufacturers
have been increasingly focusing on exports. While the Middle
East is one of the largest export markets, countries such as
Bangladesh, Sri Lanka, Brazil, and Africa are also sizeable export
destinations.
Overseas sales account for ~5% of revenues of the Indian tile industry at present, but this metric is
expected to rise significantly over the coming decade on several factors such as capex by Indian man-
ufacturers, increasing customisation for international markets, and a globally competitive manufactur-
ing-cost profile. Global imposition of ADD on Chinese tiles should result in an abatement of supplies,
serving as a kicker for Indian manufacturers to ramp up exports.
Indian tile export (msm) Indian tile import (msm)
Imports to decrease from 7% to 4% (of the total Indian Tile Industry) with imposition of anti-dumping duty
Exports to increase with more value-added products introduced by the India and with anti-dumping duty on Chinese tiles in other countries
Sour
ce: I
ndus
try
Spanish tiles and sanitary ware are favourites in the luxury segment
Imported Italian tiles & sanitary ware being sold in Mumbai
25GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 24
The China factor – taming the dragon
As is with most other industries, China’s manu-
facturing might has swayed the dynamics in the
global tile market. With production of ceramic tiles
far outstripping consumption, China’s exports have
had a disruptive impact on production in various
parts of the world. To put things in perspective,
China produced about 6,000msm of ceramic tiles
in 2014, but consumed only 4,894msm.
What has made matters difficult for local manu-
facturers in India is the proximity of south India to
China. With shipping costs from south China to
southern India lower than the cost of transporting
from Gujarat, local manufacturers have faced stiff
competition in this large and lucrative geography.
In several instances, Chinese tiles have been 15-
20% cheaper than Indian tiles. Moreover, volumes
imported into India (largely into south India) have
also dented sales, which by
some estimates stood at
~38msm. Indian exports
to SAARC countries have
also encountered stiff
price competition from
Chinese tiles due to the
price differential arising
from the latter’s much
larger scale.
However, the past few
years have seen reme-
dial action globally, to
counter the threat posed
by cheaper Chinese
imports. The imposition
of antidumping/coun-
tervailing duties (ADD/
CVD) by several European
countries, Taiwan, Brazil,
etc, on imports of Chinese
tiles has opened the
export markets for Indian
tile companies.
Chinese tile production (msm)
Chinese tile consumption (msm)
India, too, has recently levied ADD to the tune of US$
1.37/ sqm, which is likely to be raised to US$ 2/sqm
over the next few quarters. This is likely to restore price
parity between domestic prices of tile and Chinese
imports, thereby boosting competitiveness of Indian
manufacturers. Channel checks indicate a reduction
in the competitive intensity of these imports, espe-
cially at lower price points – where demand is likely
to shift in favour of Indian manufacturers. However,
in the premium and luxury segments, competition is
likely to persist, in light of limited offerings by Indian
players. Indian players expect imports from China to
nearly halve from 7% of total industry size to 4% in the
One of the largest single piece tiles imported from China (64” x 32”)
27GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 26
O U T L O O K
Future “Tense’ or Future ‘Perfect’: Which is it to be?
On the Horizon (mid-term view)
1.Prices to soften / remain static in the near term
While a subtle increase in competitive intensity coupled with
subdued growth in consumption (8-10%) could contribute to
static prices across tiling products, the decline in manufactur-
ing costs (Power & fuel) and the dip in logistics costs could
result in a mark-down in prices across the industry. While
all this is contingent on gas prices and transportation costs
maintaining their current trajectory, channel checks point to
such a scenario panning out over the next few quarters.
2. Frequency of product range expansion by unlisted
players to rise
Most companies in the industry follow the norm of intro-
ducing 3-4 new designs of tiles every month. Dealers and
architects point out that in order to step up their game and
compete effectively against imports and larger, listed players,
players from Gujarat are gradually stepping up the tempo
of designs and SKU introductions. While this could not be
individually verified from Gujarat-based unlisted players, it
seems perfectly logical since this would contribute immense-
ly towards brand development and customer acquisition.
3.Export focus to intensify
The imposition of punitive duties on Chinese tile exports
in most global markets has opened up avenues for exports
for Indian companies, either through white-label supplies or
under their own brand. While markets in the neighbouring
SAARC countries have always been targeted, manufacturers
in Morbi are increasing their shipments to the Middle East
and Europe. Using dynamic feedback, exporters from Morbi
are stepping up customisation and broadening their range.
This, coupled with competitive pricing, is enabling several
unlisted Indian manufacturers on increasing their quantum of
exports – a trend that should gather momentum in the near
term.
A little bit of both, actually. Extensive interactions with companies (listed and unlisted), channel partners, architects, and in-
dustry observers indicate several changes on the horizon for the domestic tiles industry. The real questions are really about
the extent and timing of these shifts, and not the probability of their occurrence.
Into the wild blue yonder (long-term view)
1. Growth through the JV model to be pursued more
aggressively
Several rounds of capacity expansions are envisaged over
the next decade, as manufactures move to satisfy the volume
and variety demand at home and overseas. However, capital
efficiency and compartmentalisation of competencies could
lead to companies collaborating with each other through JVs.
These alliances could be for outsourcing production, sharing
of specified output, marketing tie-ups, or a combination of all
three in a hybrid form.
2. Shelf size to increase, but share to drop
With the entry of additional players into the branded tile
segment, most dealers and distributors said that the range of
products stocked at their end was definitely expanding. How-
ever, competition and a wide variety of products would result
in a change in the market share dynamics of older players,
despite the market growing.
3.Smaller players may have to up their game or face
stagnation
The gradual build up in competitive intensity in the domestic
tile industry would necessitate innovation and operational
flexibility in production, distribution, and financial control.
Thus, companies with smaller scale may have to invest more
bandwidth and material resources to be fleet-footed in order
to survive and grow. “Traditional soch se hatna padega, nahi
toh mushkil ho jayegi (it will be difficult unless the conven-
tional thought process is modified),” responded Mr. Kunda-
lia, when questioned about the future of small-scale manu-
facturers in Morbi.
27GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 26
One could easily mistake the office of Mr. Abhishek Somany (JMD,
Somany Ceramics) for a museum of miniature cars. An afficianado of all
things automotive and racing, Mr. Somany took time out to patiently
talk about the operations of Somany Ceramic, detailing with mechanical
precision the transformation of the Indian tile market. Key takeaways of
the chat:
Could you tell us about your company?
Somany Ceramics was founded in 1969 by Mr HL Somany in collabora-
tion with Pilkington’s Tile Holding, UK. Today, we are one of the leading
manufacturers and marketers of tiles, sanitary-ware, and bath fittings in
India, and produce 60 mn sqm of vitrified and ceramic tiles from two
fully-owned facilities (one in Kadi in Gujarat and one in Kassar, Haryana)
and seven six joint-venture facilities at Morbi in Gujarat.
We have a pan-India presence with vast distribution network comprising
of 10000-plus dealers and sub-dealers, and 180 franchisee-managed
showrooms and owned display centres.
What are the market trends for 2016?
Greater utility, decorative qualities, easier maintenance are some of the
reasons for tiles becoming popular over the last two decades. Inter-
national trends are the first ones to be adapted by consumers in India
and as more and more Indians have started often visiting/living abroad,
expectations have transformed completely.
Buyers today are looking beyond traditionally designed tiles and are
moving towards specialised tiles for different usage areas. Mainte-
nance-resistant, hygienic, yet stylish tiles are preferred for kitchen and
bathrooms. Consumers pick up design options that reflect their lifestyle,
but are cost effective as well. Taking the technologically driven route,
3D tiles add an additional aspect to space. These tiles have started
picking up in the market and are expected to experience an upsurge in
the coming year. The demand for ‘green’ tiles is also on the rise and is
likely to increase. Tiles using leather, metal, and other non-traditional
natural hues and surfaces are a popular choice these days, especially
when used as decorative embellishments. Mosaic patterned tiles, to
create a picture or a repeating design are now preferred over bland
printed tiles.
Even the size of the tiles is expanding to suit the modern needs. It is a
growing trend to prepare large continuous surfaces and minimize joints,
Interaction with Mr. Abhishek SomanyJMD, SOMANY CERAMICS
Innovation has been the key to our success. Increased capacity utilisation and wider footprint have enabled us to stay ahead.
“
”
29GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 28
allowing them to install with minimal grout lines.
Somany produces tiles in various sizes – 600x1200,
800x1200, and 800x800mm.
What is the USP of your company?
Innovation is our USP. Somany has been investing
its energies in product innovation and increas-
ing capacities across segments, with more focus
on the higher-margin segments. To cater to the
dynamic sentiments of our consumers, we have
a product basket of tiles (floor and wall), sani-
tary-ware, and CP fittings.
What are your future plans?
We are focusing on doubling output in the next
three years. New construction and renovation of
existing properties will boost demand for ceramic
tiles. Over the years, we have realised that the
best way to grow is to outsource production to
smaller players and leverage our brand and distri-
bution network for marketing and selling. We shall
continue with our asset-light model for growth,
where we will keep adding to our capacity by tak-
ing stakes in the equity of smaller manufacturers,
who will then produce exclusively for us.
We shall also expand the plants of our existing
associates and continue to enhance our offerings
through more value-added products. To be a one-
stop destination for all home-decor needs, we will
ramp-up our sanitary-ware and bathroom-fittings
segments.
We will strengthen our retail footprint further by
adding more franchisee-run stores year-on-year.
In addition, tier-2 and tier-3 towns and exports
would be thrust areas for enhancing sales. These
strategies should result in sustainable top- and
bottom-line growth. We will invest accordingly for
expanding our business operations and upgrad-
ing our manufacturing facilities. We are targeting
+20% growth in FY16, as there is high growth
potential in the ceramic tile industry.
We have no diversification plans for the time
being, and will continue with the existing business
verticals.
What strategies do you follow to handle com-
petition from your organised and unorganised
counterparts?
Every company has a different business strategy.
We believe in ours. We offer multiple platforms to
customers, so that we are in their reach radius. We
have highly equipped centres with a wide range
of tiles, sanitaryware, and bath fittings to offer.
The number of stores, either dealer-operated or
company-owned, across the country, enhances
our brand visibility through improved accessibility
for customers. Our website is also a major touch
point, which is regularly updated.
For beating competition from the organied sector,
we have been investing our energies in prod-
uct innovation and increasing capacities across
segments – with more focus on the higher-margin
segments. To cater to the dynamic sentiments of
the consumers, we offer a comprehensive bouquet
of products, thus becoming a ‘One-Stop-Shop’ for
customers.
Our strategy for beating competition from the
unorganised sector is basically to increase our
footprint in the country and increase our range
to more and more tier-2 and 3 towns, as most of
the construction activity is going on there. These
markets have a huge potential, as more people
are switching over to the use of tiles in their homes
as well as in commercial areas.
Apart from this, we are also focusing a lot on
branding – at the end of the day, it is the brand
that sells as customers are aware that a good
brand not only guarantees consistent quality but
also offers a huge range.
What is the demand scenario like outside tier-1
cities?
With urbanisation spreading to tier-2 and 3 cities,
there is healthy demand for tiles, sanitary-ware,
and bathroom fittings. These cities are growing
commercially, industrially, and have rising popula-
tion and education opportunities. These markets
have a huge potential; our distribution network
covers almost all tier-2 and tier-3 cities in India.
29GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 28
Interaction with Mr. Tapan JenaCEO OF SUNHEART CERAMICS
As an industry veteran of the Indian tile market, there are very few
district headquarters in India that Mr. Tapan Jena hasn’t visited to
sell his product. By virtue of more than two decades in the business,
handling numerous functions ranging from sales, marketing, logistics
etc he is CEO of SunHeart Ceramics. A cheerful disposition and
keen sense of humour apart, his incisive observations about the tile
industry formed the basis of this GV report. A selection of some of
the choicest bits of conversation with him are enclosed below:
Today, players from Gujarat, and from Morbi in particular, have
created an enviable reputation for themselves. Yet, the quality
of their output is sometimes questioned. Your thoughts on this?
In the current tiles market, Morbi controls around 60% market share
(in volumes) and every year around 40 to 50 new plants enter the
market. All these plants start with good product quality and con-
temporary designs. However, sometimes, due to costing pressures,
some companies compromise on quality and gradually lose their
reputations.
Thankfully, the occurrences of such cases is reducing, as operations
these days are handled by the new second-generation entrepre-
neurs who are educated and understand the importance of good
quality.
How important is it to have a brand in the tile industry today?
How do you see brands evolving over the next decade?
A brand plays a vital role in in this industry, but only if you can match
quality expectations and produce sufficient quantities. If you look at
the previous decade, there were fourteen brands operating in India,
but today there are only six to seven. Several companies perished
because they could not sustain the pressure of supply and quality.
There are ample opportunities for brands to grow, as most of them
are buying/sourcing from Morbi as per their quality requirements.
This enables them to be more competitive and affordable and
simultaneously provide customers with a wide choice.
Additionally, the price gap between branded and non-branded has
narrowed significantly over the past decade, mainly due to efficien-
Quantity is not the only factor today, Quality is equally important. Without quality, the consumer will not come back to a brand.
“
”
31GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 30
cies in manufacturing and lower logistics costs. As
a result, customers are opting for branded prod-
ucts. This is a huge opportunity for players who
are competent, but do not have a brand.
How do you see brand development evolving
for the smaller and mid-sized tile manufacturers
over the next few years?
The change is happening as we speak. Until
recently, such spends were ~1-2% of net sales –in
the form of distribution of free samples. Howev-
er, several prominent unlisted companies have
earmarked 3-4% of their sales in coming years for
brand-building activities like trade exhibitions,
radio jingles, appointing brand ambassadors etc.
In the light of the anti-dumping duty imposed
on Chinese imports into India and in other
countries, what is your outlook for the tile
trade in the country?
Imports have picked up in the last one year and
are available 15-20% cheaper, specifically in the
polished vitrified segment. The imposition of
anti-dumping duties in several European countries,
Taiwan, and Brazil among others on imports from
China may have prompted Chinese tile manufac-
turing companies to look at the Indian market in a
big way.
The import of these tiles has been rampant in
port towns such as Mumbai, Chennai, Kolkata,
and Kochi. So far, the practice has been mainly
concentrated in port cities, but it will soon spread
and can reach out to the hinterland.
With the imposition of anti-dumping duties, the
PVT segment will definitely grow, specifically in
ports and surrounding areas. Meanwhile, Indian
exports are growing at an extremely encouraging
clip and should be able to sustain this tempo in
the future.
What new concepts do you see evolving in
the tile industry that would carry the industry
forward?
The Indian consumer is very quick to adopt the
latest trends. Consequently, manufacturers are also
upgrading technology to keep pace with global
trends. Five years ago, there were no digital-print-
ing technology, but today there are more than 250
machines – a number that is growing.
Tiles are no longer only a flooring medium, but a
style statement. New and exciting products, which
are relevant, are quick to be accepted in the coun-
try. A good example of this is that larger-format
GVT and slim tiles are finding increasing accept-
ance in India.
Going forward, interesting innovations in terms of
thickness, finish, design, and size will continue to
drive growth for the industry, which I think will be
in double-digits for the next decade.
31GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 30
Annexures: Tile manufacturing process
STEP-1
STEP-7
STEP-2
STEP-8
STEP-3
STEP-9
STEP-4
STEP-10
STEP-5
STEP-11
STEP-6
STEP-12
STEP-13
- Raw material procurement and weighing: Various raw materials used are procured and accurately weighed,
Shaping:-The granules are then compressed under high pressure to form a biscuit by means of an automatic hydraulic press. It facilitates formation of tiles of different sizes and shapes.
Raw material feeder: Raw material is fed into the ball mills for crushing and grinding via conveyor system.
Speed pre drying: The tiles are then moved into a horizontal dryer, where the moisture content in the tile evaporates and the tile picks up its strength.
Crushing, grinding, and milling: Raw material is crushed and ground to the requisite particle size and subsequently milled down to as low as 1.0 micro-meter in diameter.
Kiln firing: Firing is the process by which ceramics are thermally consolidated into a dense, cohesive body composed of fine, uniform grains. The peak temperature is approximately 1250C. The flux in the body melts and re-solidifies to form porcelain stoneware.
Storage vats: The slip is discharged into storage Vats and agitated continuously with high efficiency stirring blades to ensure homogeneity.
Calibrating /sizing: Calibration is done to make the surface even by removing a certain amount of material to provide a flat surface. Diamond tools are employed for calibration.
Spray drier: The slip from storage vats is sieved and is fed into the spray drier at constant pressure by means of a high-pressure piston pump to convert slip into granules.
Polishing: Polishing employs to give the tile a mirror like finish without any scratches, shadows or signs of machining. Not all ceramics are polished.
Powder storage: The spray-dried granules are stored in silos for their ageing which increases its working properties by homogenizing the moisture and making the granules more pliable.
Sorting: The tiles are automatically sorted into different grades depending on the categorization. The tiles are checked for dimensions and flatness automatically.
Packing: The finished products are then packed and stored or shipped.
33GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 32
BY VAIBHAV AGARWAL
President (Marketing)
The India Cements
Mr. Rakesh Singh
We talked to Mr Rakesh Singh, President (Marketing) at The India Cements, south India’s largest cement company and one of the leading ones in India. He has been working with ICL for the last 18 years, before which he was with behemoth ACC for 12 years in its marketing division. Mr Singh has been in marketing for about 30 years. He is a mechanical engineer from IIT-BHU (1977-83) and a PGDBM (1984-86) from XLRI, Jamshedpur.
Disclaimer: These are Mr Rakesh Singh’s personal views and not India Cements’
33GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 32
Q. What is your outlook on demand?
My views are a bit different on the spike that we saw
in Q4 in terms of growth across the country includ-
ing south, which was otherwise showing negative
growth through and through. This is good news,
but I am not too sure if it can sustain at the same
pace. What we have seen in February-March is an
outlier in my view, and growth numbers are likely to
taper off. If I have to compare Q4FY16 to Q4FY15,
there seems to be almost 45% growth in Andhra and
Telangana combined, while Tamil Nadu did not grow
beyond 1.5%-1.6% and Karnataka was at a modest
8%. Overall, south had a growth of around 13.5%.
Q. Why do you think demand growth may taper
off?
It is interesting to note that during Q4, the move-
ment from south into the rest of India – specifically
west and east – came down by almost 7%. This indi-
cates that the south growth numbers were skewed.
Possibly because of low prices in AP/TS , cement
that was meant to go to the west or east was being
sold in south itself. In other words sale recorded in
AP /TS was partially moving to neighbouring state,
unofficially. Therefore , it is not an apple-to-apple
comparison.
Moreover, large portion of the sales during Febru-
ary-March in AP/Telangana was driven by contrac-
tors’ demand. In these two states contractors were
to finish their work and submit bill by the end of
March, so they went on an overdrive. In addition,
Lower Cement price acted as a motivation for dis-
tributors to buy more in anticipation of price hikes.
There was a bit of inventory built at secondary level,
coupled with a cut in inter-region movement (to
Maharashtra or to east India). All of above lead to
inflated demand in Q4 which I believe will taper off
going forward.
Q What would south India demand growth num-
bers look like in your opinion?
For the past 5-6 years in a row, Andhra specifically
has seen negative growth; this was the first year
after a very long time that we have seen positive
growth of 5% in Andhra and Telangana. So while Q4
growth was good, the year’s growth was 5% – which
is reasonable. Going forward, this 5-8% growth in
Andhra and Telangana should be sustainable. You
should not expect double-digit growth that we saw
in Q4, but we should definitely see a modest growth
of 5-8%. Obviously, we have to really keep a close
watch on what happens to the capital, the many
promises that the Telengana government has made,
demand triggers from the so-called Swachh Bharat
Scheme, and also on the road projects.
Q. What is your take on the demand growth in
other states in the south?
I do not see much growth coming from Tamil Nadu
and Kerala because of elections for the first 3-4
months of FY17. Until the new government settles, I
do not see much activity happening. In these states,
normally, the money spent before and after elec-
tions is more on social welfare and not construction.
Kerala is seeing some strain because the Middle East
not doing well. Karnataka will see a modest growth
of 8%, mostly from south Karnataka, and because
of some of the activities that the government has
taken up at the rural level. Maharashtra saw 15%
growth last year, and this pace should continue. This
is a very important state, given its close integration
to the south. Obviously, all these numbers have a
bearing on how the monsoon behaves this year;
things are pretty bad now and if the monsoon is
below average, construction activity will definitely
get majorly impacted.
Q. What is your take on cement prices?
This is where I have a different view from people
who get very bullish on growth. My view is that
growth without profit makes no sense. Earlier in
south India, because of lack of growth, companies
used to sell cement while maintaining their brand
equity – trying to position themselves at higher price
levels, and cutting distribution costs – because fight-
ing for market share was not a viable route. Howev-
er, in Q4, as growth came back, a little greed set in
– which resulted in prices falling, quite substantially
in Andhra and Telengana. Prices in Hyderabad in Q4
touched ~Rs 230-240 while they were as high as Rs
35GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 34
340 a few months ago. Rs 70-80 has just gone down
the drain because a few companies were trying to
increase their market share. In one of the cases, a
smaller player apparently got an assurance from a
third party to fund its expansion plans, which made
them greedy and this accelerated the pace of price
war . I believe good sense will prevail in the long
run, and we will start focusing on better prices again.
Even if the growth comes (my guess is 5-7% or even
10% at best), demand-supply gap of around 80mn
tonnes will take about five years to match. What we
were doing was best – maintaining our positioning
while trying to sell in the right market at the right
price. We have to go back to that era instead of try-
ing to fight for market share in a commodity space.
Q. How is the current price scenario?
Prices have now improved by Rs 50/bag in markets
where a sharp price correction took place. We ex-
pect another Rs 50-60 price improvement in a couple
of tranches over the next few months, for it to reach
its original levels.. In other markets, cement prices
remain fairly stable. Just to give you an indication,
I believe Bangalore is in the range of Rs 380-390,
Chennai Rs 390-395, and Kerala Rs 400-410. Since
we operate a little bit in the north, I think north has
seen an improvement, but again in specific pock-
ets – some pockets have gone up smartly and some
pockets, not so well. Gujarat remains Rs 260-280,
Rajasthan Rs 265-270, and further north it is Rs 275-
285. Similarly, Orissa, which used to hover around
Rs 340 a few months ago, is down to Rs 290-300.
However, because of demand improving, I see price
improvements happening. While it cannot be seen
at the ground level yet, I expect prices in the east
rising.
Q. What are the bottlenecks for demand growth?
Basically – stuck for funding. There is no fund with
most of these governments. Telengana for exam-
ple – structurally, its revenue is good, but I think the
priority is different and therefore the government is
not able to spare enough money for projects that
they had talked about. They were supposed to have
done a lot of flyovers, white topping across Hydera-
bad, two bedroom houses for all those who are below
poverty line, a little bit of irrigation projects which are
only at very initial stages), and of course the Swacch
Bharat and Smart City projects. While they were
supposed to have funds, at least on paper, they have
possibly spent them on welfare activities. In fact, the
contractors tell us that even the jobs that were done
are facing delayed payments. Coming to Andhra, they
do not have money to implement the grand plans
they have. I always say I have tremendous confidence
in the chief minister, but unfortunately, he is not able
to get things started. Activity will ultimately happen,
question is timing ! What is happening today is only
activity in terms of transaction of land – more of spec-
ulative trading. However, this will eventually lead to
construction and thus cement consumption.
Q. How will you summarise the industry scenario?
In a nutshell, at the ground level, nothing earth-shak-
ing is happening – which strengthens my assumption
that the demand will not grow at the pace in which it
had grown in Q4. I do not see major construction hap-
pening around the capital of Andhra in near future.
We were expecting a lot of activity from Telangana –
in the form of roads and houses. We thought National
highway projects will add to lot of cement consump-
tion, but if you look at the list, except for two major
projects that have been awarded recently, there are
no other road projects in the south – anywhere – right
from Andhra to Kerala. Most of the projects that have
been cleared are in central and north India.
The most important contributor to demand creation
is driven by middle class and from the rural areas – it
accounts for almost 55% of cement demand in India in
terms of individual houses, plus 15% in terms of what
you call the builder segment, which adds upto 70%.
In this component, we are not seeing anything great
happening, because it is linked to the economy and
job creation and people becoming comfortable that
they can repay loans or have savings to invest. One
has to really wait for those real turnaround triggers.
Given the low base and lack of economic activity, I see
5-8% demand growth with reasonably fair prices in
south India.
35GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 34
Indian Economy – Trend Indicators
Monthly Economic Indicators
Quarterly Economic Indicators
Growth Rates (%) Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16
IIP 4.8 2.5 3.0 2.5 4.2 4.3 6.3 3.7 9.9 -3.4 -0.9 -1.5 2.0 0.1
PMI 51.2 52.1 51.3 52.6 51.3 52.7 52.3 51.2 50.7 50.3 49.1 51.1 51.1 52.4
Core sector 2.3 -0.7 -0.4 4.4 3.0 1.1 2.6 3.2 3.2 -1.3 0.9 2.9 5.7 6.4
WPI -2.1 -2.3 -2.4 -2.2 -2.1 -4.0 -5.1 -4.6 -3.7 -2.0 -0.7 -0.9 -1.0 -0.9
CPI 5.4 5.3 4.9 5.0 5.4 3.7 3.7 4.4 5.0 5.4 5.6 5.7 5.3 4.8
Money Supply 11.2 10.8 10.8 11.0 11.0 11.5 11.3 11.0 10.9 10.7 11.0 11.1 11.3 10.3
Deposit 11.2 10.7 10.7 11.5 11.4 11.8 11.9 11.3 11.1 10.4 10.9 11.1 11.0 9.9
Credit 7.2 8.7 9.2 8.8 9.5 9.4 9.0 7.5 9.0 9.8 11.1 11.4 11.6 11.3
Exports -13.3 -20.8 -14.0 -20.2 -15.8 -10.3 -20.7 -24.3 -17.5 -24.4 -14.7 -13.6 -5.7 -5.5
Imports -14.7 -14.2 -7.5 -16.5 -13.4 -10.3 -9.9 -25.4 -21.2 -30.3 -3.9 -11.0 -5.0 -21.6
Trade deficit (USD Bn) -6.7 -11.4 -11.0 -10.4 -10.8 -12.8 -12.5 -10.5 -9.8 -9.8 -11.7 -7.6 -6.5 -5.1
Net FDI (USD Bn) 3.2 2.7 3.3 3.8 1.7 1.7 2.2 2.8 4.9 2.7 3.6 4.1 2.8 1.5
FII (USD Bn) 3.8 2.0 3.1 -2.8 -2.0 -0.7 -3.5 -2.4 4.5 -3.8 -2.6 -1.5 -2.4 4.3
ECB (USD Bn) 2.3 2.7 7.3 2.4 3.2 2.1 0.8 2.6 2.1 3.2 3.0 1.4 1.4 1.5
NRI Deposits (USD Bn) 61.8 62.5 63.4 63.8 63.7 64.1 66.5 65.6 65.3 66.7 66.2 67.8 68.4 66.2
Dollar-Rupee 338.1 341.4 344.6 352.5 355.2 353.3 355.4 350.0 353.6 351.6 352.1 349.2 346.8 355.6
FOREX Reserves (USD Bn) 295.8 291.9 293.4 296.4 287.9 284.6 280.2 275.5 276.3 283.0 291.3 295.7 292.2 294.4
Balance of Payment (USD Bn) Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16Exports 79.8 83.7 81.7 85.3 79.0 70.8 68.0 67.6 64.9Imports 112.9 114.3 116.3 123.9 118.3 102.5 102.2 105.0 98.9Trade deficit -33.2 -30.7 -34.6 -38.6 -39.3 -31.7 -34.2 -37.4 -34.0Net Invisibles 29.1 29.3 26.7 28.5 30.9 30.2 28.0 29.2 26.9CAD -4.1 -1.3 -7.9 -10.1 -8.4 -1.5 -6.1 -8.2 -7.1CAD (% of GDP) 0.9 0.3 1.6 2.0 1.7 0.3 1.2 1.6 1.3Capital Account 23.8 9.2 19.2 16.5 23.6 30.7 18.1 7.2 10.5BoP 19.1 7.1 11.2 6.9 13.2 30.1 11.4 -0.9 4.1
GDP and its Components (YoY, %) Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16Agriculture & allied activities 3.8 4.4 2.6 2.8 -2.4 -1.4 1.6 2.0 -1.0Industry 5.5 5.5 8.1 6.2 3.4 7.2 7.1 8.4 11.0Mining & Quarrying 4.2 11.5 4.3 7.0 9.1 2.3 8.6 5.0 6.5Manufacturing 5.9 4.4 8.4 5.8 1.7 8.4 7.3 9.0 12.6Electricity, Gas & Water Supply 3.9 5.9 10.1 8.8 8.8 4.2 4.0 7.5 6.0Services 8.3 5.6 8.4 9.9 11.7 8.0 8.5 8.3 8.6Construction 3.8 1.2 6.5 5.3 4.9 1.4 6.0 1.2 4.0Trade, Hotel, Transport and Communications 12.4 9.9 12.1 8.4 6.2 14.1 10.5 8.1 10.1Finance, Insurance, Real Estate & Business Services 5.7 5.5 9.3 12.7 12.1 10.2 9.3 11.6 9.9Community, Social & Personal Services 9.1 2.4 2.8 10.3 25.3 0.1 6.1 7.1 7.5GDP at FC 6.6 5.3 7.4 8.1 6.7 6.1 7.2 7.5 7.1
37GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 36
Annual Economic Indicators and Forecasts Indicators Units FY8 FY9 FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E
Real GDP growth % 9.3 6.7 8.6 8.9 6.7 4.5 4.7 7.2 6.8 7.5
Agriculture % 5.8 0.1 0.8 8.6 5.0 1.4 4.7 0.2 2.0 4.0
Industry % 9.2 4.1 10.2 8.3 6.7 0.9 -0.1 6.6 5.7 6.7
Services % 10.3 9.4 10.0 9.2 7.1 6.2 6.0 9.4 8.5 8.8
Real GDP Rs Bn 38966 41587 45161 49185 52475 54821 91698 98271 104953 112825
Real GDP US$ Bn 967 908 953 1079 1096 1008 1517 1611 1615 1684
Nominal GDP Rs Bn 49864 56301 64778 77841 90097 101133 113451 126538 137626 153212
Nominal GDP US$ Bn 1237 1229 1367 1707 1881 1859 1876 2074 2117 2287
Population Mn 1138 1154 1170 1186 1202 1219 1236 1254 1271 1302
Per Capita Income US$ 1087 1065 1168 1439 1565 1525 1518 1655 1666 1757
WPI (Average) % 4.7 8.1 3.8 9.6 8.7 7.4 6.0 2.0 -2.0 4.0
CPI (Average) % 6.4 9.0 12.4 10.4 8.3 10.2 9.5 6.0 5.0 5.0
Money Supply % 22.1 20.5 19.2 16.2 15.8 13.6 13.5 12.0 12.0 13.0
CRR % 7.50 5.00 5.75 6.00 4.75 4.00 4.00 4.0 4.0 4.0
Repo rate % 7.75 5.00 5.00 6.75 8.50 7.50 8.00 7.50 6.75 6.25-6.5
Reverse repo rate % 6.00 3.50 3.50 5.75 7.50 6.50 7.00 6.50 5.75 5.25-5.5
Bank Deposit growth % 22.4 19.9 17.2 15.9 13.5 14.4 14.6 11.4 12.0 13.5
Bank Credit growth % 22.3 17.5 16.9 21.5 17.0 15.0 14.3 9.5 10.0 12.0
Centre Fiscal Deficit Rs Bn 1437 3370 4140 3736 5160 5209 5245 5107 5351 5339
Centre Fiscal Deficit % of GDP 2.9 6.0 6.4 4.8 5.7 5.2 4.6 4.1 3.9 3.5
Gross Central Govt Borrowings Rs Bn 1681 2730 4510 4370 5098 5580 5641 5920 5850 6000
Net Central Govt Borrowings Rs Bn 1318 2336 3984 3254 4362 4674 4536 4531 4406 4252
State Fiscal Deficit % of GDP 1.5 2.4 2.9 2.1 1.9 2.0 2.5 2.4 2.0 1.5
Consolidted Fiscal Deficit % of GDP 4.4 8.4 9.3 6.9 7.6 6.9 7.1 6.6 5.9 5.0
Exports US$ Bn 166.2 189.0 182.4 251.1 309.8 306.6 318.6 316.7 270.0 283.5
YoY Growth % 28.9 13.7 -3.5 37.6 23.4 -1.0 3.9 -0.6 -14.8 5.0
Imports US$ Bn 257.6 308.5 300.6 381.1 499.5 502.2 466.2 460.9 406.0 428.3
YoY Growth % 35.1 19.7 -2.5 26.7 31.1 0.5 -7.2 -1.1 -11.9 5.5
Trade Balance US$ Bn -91.5 -119.5 -118.2 -129.9 -189.8 -195.6 -147.6 -144.2 -136.0 -144.8
Net Invisibles US$ Bn 75.7 91.6 80.0 84.6 111.604 107.5 115.2 116.2 118.8 121.1
Current Account Deficit US$ Bn -15.7 -27.9 -38.2 -45.3 -78.2 -88.2 -32.4 -27.9 -17.2 -23.7
CAD (% of GDP) % -1.3 -2.3 -2.8 -2.6 -4.2 -4.7 -1.7 -1.4 -0.8 -1.0
Capital Account Balance US$ Bn 106.6 7.8 51.6 62.0 67.8 89.3 48.8 90.0 50.4 75.5
Dollar-Rupee (Average) 40.3 45.8 47.4 45.6 47.9 54.4 60.5 61.2 65.0 67.0
Source: RBI, CSO, CGA, Ministry of Agriculture, Ministry of commerce, Bloomberg, PhillipCapital India Research
37GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 36
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16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
Cham
bal F
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ts 6
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Tata
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411
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181
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sant
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Mot
ors
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mob
iles
387
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Auto
mob
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uti S
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obile
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Mah
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iles
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j Aut
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obile
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Cum
min
s Ind
iaCa
pita
l Goo
ds 8
65
239
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4
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1
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2
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9 3
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3 7
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2
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7 2
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7
Engi
neer
s Ind
iaCa
pita
l Goo
ds 1
86
62,
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8
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6 3
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0 2
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2
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0 1
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Siem
ens
Capi
tal G
oods
1,1
73
417
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1
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09
112
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8
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1
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7 2
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6 8
.8
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4
8.2
37.
3 1
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6
Crom
pton
Gre
aves
Capi
tal G
oods
64
39,
861
127
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1
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20
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09
1,4
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2
6
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3 1
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2
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11.
1 1
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0.9
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3
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8.4
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VA Te
ch W
abag
Capi
tal G
oods
592
3
2,27
5 2
8,94
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2 2
,388
2
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7 9
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4 9
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6
Volta
sCa
pita
l Goo
ds 3
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9
BHEL
Capi
tal G
oods
126
3
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904
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n.a
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m T&
DCa
pita
l Goo
ds 3
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904
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4 1
3.1
39GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 38
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
ABB
Indi
aCa
pita
l Goo
ds 1
,284
2
72,1
65
81,
403
92,
625
7,1
25
8,6
33
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99
3,8
85
14
18
15.
8 2
9.6
90.
8 7
0.1
9.0
8
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38.
2 3
1.5
10.
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9.5
1
1.0
Lars
en &
Toub
roCa
pita
l Goo
ds 1
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1
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1
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1
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1
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138
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24.
3 2
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22.
5 2
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2.6
1
8.5
15.
7 1
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11.
4 4
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4.9
KEC
Inte
rnat
iona
lCa
pita
l Goo
ds 1
31
33,
563
87,
242
93,
074
6,7
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7,5
31
1,8
07
2,2
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7
9
59.
4 2
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18.
6 1
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2.3
2
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7
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2 1
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9.5
1
0.3
Ther
max
Capi
tal G
oods
768
9
1,52
4 5
4,82
8 5
1,41
6 4
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4
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2
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2
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2
4 2
3 2
1.0
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3
2.4
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7 3
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1
9.9
19.
6 1
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8.6
Inox
Win
dCa
pita
l Goo
ds 2
37
52,
539
42,
332
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830
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64
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15
20
26
71.
0 2
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11.
6 9
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3.0
2
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7
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18.
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8.3
Alsto
m In
dia
Capi
tal G
oods
618
4
1,53
6 2
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7,90
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14
22
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8 6
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45.
2 2
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3.6
2
5.5
16.
3 8
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8
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25.
8
Dalm
ia B
hara
t Ltd
Cem
ent
880
7
8,17
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0 1
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5
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1
5 5
9
1,20
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297
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59.
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1
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6 7
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7
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Shre
e Ce
men
tCe
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469
469
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6
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04
320
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1
Man
gala
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64
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OCL I
ndia
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ent
507
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JK La
kshm
i Cem
ent
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344
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JK C
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90
41,
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Indi
a Cem
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28,
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Ambu
ja C
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tCe
men
t 2
21
342
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2
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7
ACC
Cem
ent
1,4
62
274
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1
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28
126
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Ultra
tech
Cem
ent
Cem
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3,2
28
885
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4
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4.2
3
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20.
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1
1.0
LIC H
ousin
g Fin
ance
Finan
cials
469
2
36,7
88
124
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1
47,1
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25,
186
29,
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DCB
Bank
Finan
cials
92
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122
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Indu
sind
Bank
Finan
cials
1,0
66
634
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4
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2 2
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8 3
9 4
6 1
4.1
18.
3 2
7.6
23.
3 3
.7
3.3
1
4.9
12.
6 1
6.6
14.
6 1
.9
1.8
Repc
o Ho
me
Finan
ce
Finan
cials
648
4
0,55
2 2
,508
1
0,98
7 2
,508
3
,196
1
,492
1
,901
2
4 3
0 2
0.7
- 2
7.2
21.
4 4
.3
0.1
1
6.2
16.
1 1
7.0
18.
4 2
.2
2.2
Punj
ab N
atio
nal B
ank
Finan
cials
79
155
,811
1
72,7
75
195
,620
1
27,1
47
140
,053
3
1,25
9 4
3,19
5 1
6 2
1 -3
.9
31.
7 5
.0
3.8
0
.5
0.5
1
.2
1.1
7
.9
9.8
0
.5
0.6
Bank
of I
ndia
Fin
ancia
ls 8
7 7
1,04
0 1
13,0
51
127
,049
6
3,90
2 7
4,17
6 -3
1,88
7 1
1,07
6 -2
1 1
7 -1
82.5
-1
78.1
-4
.1
5.3
0
.6
0.5
1
.1
1.0
-1
1.5
3.8
-0
.5
0.2
39GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 38
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
Cana
ra B
ank
Finan
cials
188
1
02,2
72
91,
757
99,
117
69,
458
71,
508
10,
027
14,
946
48
65
-15.
4 3
5.3
3.9
2
.9
0.5
0
.4
1.5
1
.4
3.7
5
.1
0.2
0
.2
Indi
an B
ank
Finan
cials
86
41,
401
44,
674
48,
420
31,
614
33,
215
7,3
86
9,1
03
22
28
5.3
2
8.6
3.9
3
.0
0.4
0
.4
1.3
1
.2
5.7
6
.7
0.4
0
.4
Orie
ntal
Ban
k of C
omFin
ancia
ls 8
4 2
7,09
4 5
3,53
8 5
9,12
6 3
8,91
3 4
1,59
6 5
47
4,2
62
31
43
86.
7 3
8.7
2.7
2
.0
0.3
0
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0.7
0
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0.4
3
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0.0
0
.2
ICIC
I Ban
kFin
ancia
ls 2
32
1,3
48,0
40
211
,212
2
43,0
27
250
,632
2
56,0
01
120
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1
30,5
80
21
22
7.9
7
.8
11.
1 1
0.3
1.7
1
.6
5.4
5
.3
14.
3 1
4.0
1.8
1
.7
Shrir
am Tr
ansp
ort F
inFin
ancia
ls 1
,120
2
54,0
29
50,
117
58,
103
36,
904
43,
284
13,
587
14,
911
60
66
9.8
9
.7
18.
7 1
7.0
112
.0
112
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6.9
5
.9
13.
9 1
3.5
2.1
2
.0
Shrir
am C
ity U
nion
Fin
Finan
cials
1,6
44
108
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2
3,84
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9 1
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7 6
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6
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9
3 1
04
10.
3 1
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17.
6 1
5.7
2.4
2
.2
7.8
6
.8
14.
3 1
4.4
3.2
3
.2
AXIS
Ban
kFin
ancia
ls 4
93
1,1
74,5
97
163
,255
1
92,6
98
159
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1
81,8
27
85,
465
99,
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34
37
10.
6 7
.5
14.
3 1
3.3
2.5
2
.2
7.4
6
.5
17.
7 1
7.8
1.7
1
.7
CIFC
Finan
cials
894
1
39,5
63
20,
710
24,
084
12,
220
14,
700
5,3
04
7,2
24
34
46
12.
5 3
6.2
26.
2 1
9.2
3.8
3
.2
11.
4 9
.5
15.
6 1
8.2
2.1
2
.4
HDFC
Lim
ited
Finan
cials
1,1
96
1,8
89,2
52
311
,386
3
53,6
56
100
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1
14,4
00
69,
114
79,
030
32
38
17.
4 -
37.
1 3
1.4
5.4
4
.7
18.
8 1
6.5
21.
0 2
1.1
2.6
2
.6
Mah
& M
ah Fi
naFin
ancia
ls 2
99
169
,919
3
1,75
5 3
5,66
6 2
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0 2
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2 5
,509
7
,602
1
0 1
3 -3
3.8
38.
0 3
0.6
22.
2 2
.8
2.6
8
.4
7.5
9
.5
12.
3 1
.5
1.9
HDFC
Ban
kFin
ancia
ls 1
,149
2
,906
,343
2
74,1
49
324
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2
23,3
51
263
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1
24,1
09
147
,056
5
0 5
9 2
1.5
18.
5 2
3.2
19.
6 4
.1
3.5
1
3.0
11.
0 1
8.6
19.
1 1
.9
1.9
SKS
Micr
ofina
nce
Finan
cials
598
7
6,12
2 1
2,61
4 1
9,29
0 4
,149
6
,085
2
,964
4
,301
2
4 3
4 5
8.5
45.
1 2
5.4
17.
5 5
.6
4.3
1
8.3
12.
5 2
4.9
27.
7 4
.8
4.2
Andh
ra B
ank
Finan
cials
51
34,
944
52,
389
59,
881
36,
449
41,
930
4,8
14
9,6
68
14
18
32.
4 2
6.6
3.7
2
.9
0.4
0
.4
1.0
0
.8
4.9
8
.9
0.2
0
.4
Indi
an O
vers
eas B
ank
Finan
cials
30
53,
495
73,
446
n.a
. 4
8,07
2 n
.a.
11,
896
n.a
. 8
-
72.
2 -
3.5
-
0.4
-
1.1
-
7.1
-
0.3
-
Asia
n Pa
ints
FMCG
929
8
90,9
03
151
,051
1
72,6
81
27,
732
32,
997
17,
910
21,
074
19
22
25.
9 1
7.7
49.
7 4
2.3
15.
9 1
3.4
32.
0 2
6.6
31.
9 3
1.6
32.
6 3
1.9
Hind
usta
n Un
ileve
rFM
CG 8
53
1,8
45,8
38
317
,059
3
50,5
77
63,
333
71,
861
41,
131
46,
775
19
22
6.7
1
3.7
45.
0 3
9.5
52.
3 5
4.4
28.
7 2
5.3
116
.4
137
.6
113
.6
135
.2
Baja
j Cor
pFM
CG 3
93
57,
923
8,7
42
9,5
00
2,7
16
2,9
59
2,4
34
2,5
77
17
17
10.
9 5
.8
23.
8 2
2.5
12.
1 1
2.1
20.
8 1
9.0
50.
7 5
3.7
40.
6 4
9.9
ITCFM
CG 3
18
2,5
60,6
21
360
,747
4
04,2
07
143
,653
1
65,7
20
96,
700
111
,857
1
2 1
4 5
.3
15.
7 2
6.3
22.
7 7
.3
6.3
1
7.1
14.
6 2
7.8
27.
8 2
3.6
24.
5
Emam
iFM
CG 1
,075
2
43,8
77
26,
597
32,
691
7,1
71
9,6
52
5,7
37
7,6
02
25
33
18.
2 3
2.5
42.
5 3
2.1
16.
6 1
3.7
34.
7 2
5.2
39.
1 4
2.8
22.
6 2
0.8
Nestl
eFM
CG 5
,710
5
50,5
63
81,
236
99,
957
16,
018
21,
369
10,
410
12,
236
108
1
27
-12.
2 1
7.5
52.
9 4
5.0
22.
6 2
1.6
33.
9 2
5.3
42.
8 4
8.0
39.
5 4
9.1
Jubi
lant
Food
work
sFM
CG 1
,178
7
7,50
7 2
4,32
0 2
8,92
3 2
,730
3
,564
1
,081
1
,502
1
7 2
3 -1
2.3
38.
9 7
1.3
51.
3 9
.9
8.3
2
8.5
21.
8 1
3.9
16.
2 1
4.3
17.
0
Mar
ico In
dustr
ies
FMCG
254
3
28,0
91
61,
223
66,
307
10,
655
12,
687
7,2
50
8,6
61
6
7
30.
1 1
9.5
45.
3 3
7.9
15.
2 1
2.7
30.
6 2
5.5
33.
6 3
3.5
31.
1 3
2.6
Colg
ate
FMCG
837
2
27,6
38
40,
943
45,
004
9,4
77
10,
594
6,2
25
6,6
81
23
25
11.
4 7
.3
36.
6 3
4.1
27.
0 2
4.6
23.
7 2
1.1
73.
9 7
2.3
77.
2 7
5.6
Agro
Tech
Food
sFM
CG 4
83
11,
765
7,8
02
8,4
15
543
6
38
235
3
37
10
14
-36.
9 4
3.4
50.
0 3
4.9
3.5
3
.3
21.
4 1
7.8
7.1
9
.4
7.5
9
.4
Dabu
r Ind
ia Lt
dFM
CG 2
91
512
,614
8
4,36
0 9
6,11
2 1
5,19
9 1
7,39
9 1
2,52
8 1
4,31
7 7
8
1
7.5
14.
3 4
0.9
35.
8 1
2.3
10.
4 3
3.6
28.
9 3
0.2
29.
0 2
8.0
27.
2
Godr
ej C
onsu
mer
Pro
dFM
CG 1
,439
4
90,1
13
89,
573
99,
180
16,
242
18,
119
11,
312
12,
856
33
38
24.
4 1
3.7
43.
3 3
8.1
9.4
7
.9
31.
3 2
7.7
21.
8 2
0.8
16.
5 1
6.9
Brita
nnia
FMCG
2,9
36
352
,303
8
6,92
9 9
9,72
8 1
1,99
9 1
4,27
0 8
,528
1
0,20
9 7
1 8
5 5
7.2
19.
7 4
1.3
34.
5 1
9.5
14.
3 2
9.4
24.
1 4
7.1
41.
3 5
0.0
44.
5
41GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 40
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
EFY
16E
FY17
E
Apco
tex I
ndus
tries
FMCG
288
5
,982
2
,765
5
,382
4
06
531
2
26
299
1
1 1
4 -8
.3
32.
3 2
6.6
20.
1 5
.5
4.9
1
4.5
11.
0 2
0.5
24.
3 2
0.1
23.
9
Glax
o Sm
ithkl
ine
Cons
FMCG
6,0
83
255
,820
4
2,89
1 4
6,97
3 7
,104
7
,953
7
,023
7
,970
1
67
190
2
0.4
13.
5 3
6.4
32.
1 1
0.3
8.9
3
3.2
28.
9 2
8.2
27.
8 3
0.3
29.
6
J Kum
ar In
frapr
ojec
tsIn
frastr
uctu
re 2
49
18,
829
14,
775
18,
469
2,7
19
3,3
71
1,1
54
1,6
14
15
21
4.2
3
9.8
16.
3 1
1.7
1.5
1
.3
6.7
6
.0
11.
1 1
1.8
10.
8 1
1.4
PNC
Infra
tech
Ltd
Infra
struc
ture
534
2
7,42
1 1
9,51
2 2
3,41
5 2
,576
3
,091
1
,264
1
,640
2
5 3
2 -2
.3
29.
8 2
1.7
16.
7 2
.2
1.9
1
1.0
9.5
1
2.7
12.
2 1
1.6
11.
3
GMR
Infra
struc
ture
Infra
struc
ture
12
72,
431
108
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9
4,38
8 4
6,07
6 3
3,26
7 -1
6,98
3 -2
8,98
5 -3
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-4
6.1
70.
7 -3
.9
-2.3
1
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1.7
1
1.1
14.
7 -2
4.9
-73.
7 2
.2
-0.6
GVK
Powe
rIn
frastr
uctu
re 6
1
0,10
7 2
9,88
5 4
8,60
5 1
8,89
7 2
8,26
4 -6
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-3
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-2
3
3.8
-53.
9 -1
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0
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0.7
1
2.7
8.4
-4
5.7
-21.
7 1
.2
3.4
MBL
Infra
struc
ture
s Ltd
In
frastr
uctu
re 1
31
5,4
31
21,
433
24,
648
2,3
58
2,7
11
705
7
83
17
19
-56.
0 1
1.1
7.7
6
.9
0.8
0
.7
5.4
5
.4
10.
4 1
0.5
9.9
9
.9
KNR
Cons
tructi
onIn
frastr
uctu
re 5
18
14,
569
10,
076
12,
594
1,5
11
1,8
89
1,1
60
1,1
24
41
40
58.
9 -3
.1
12.
6 1
3.0
2.1
1
.8
9.8
7
.9
18.
5 1
5.3
17.
4 1
4.6
NCC
Infra
struc
ture
78
43,
168
79,
658
83,
644
7,1
29
7,7
37
2,1
77
3,0
03
4
5
94.
8 3
7.9
19.
8 1
4.4
1.3
1
.2
8.6
7
.5
6.4
8
.1
10.
0 1
0.4
ITD C
emen
tatio
n In
frastr
uctu
re 1
33
20,
566
36,
304
41,
750
3,0
86
3,9
66
1,0
16
1,5
32
7
10
957
.1
50.
8 2
0.2
13.
4 3
.5
2.8
9
.3
7.4
1
7.2
20.
6 1
4.1
15.
8
Asho
ka B
uild
con
Infra
struc
ture
139
2
6,04
2 2
6,75
8 3
3,20
1 7
,950
1
0,98
9 9
63
1,3
93
5
7
0.3
4
4.5
27.
0 1
8.7
1.3
1
.3
8.5
6
.1
5.0
6
.7
4.5
6
.1
Adan
i Por
ts &
SEZ
Infra
struc
ture
195
4
04,1
46
69,
353
71,
132
46,
211
49,
181
26,
677
29,
109
13
14
15.
1 9
.1
15.
1 1
3.9
3.1
2
.6
12.
4 1
1.4
20.
4 1
8.5
10.
7 1
1.0
IRB
Infra
struc
ture
Infra
struc
ture
220
7
7,21
4 4
9,10
4 5
5,49
2 2
6,35
5 3
1,49
5 5
,904
6
,378
1
7 1
8 2
.8
8.0
1
3.1
12.
1 1
.5
1.2
8
.1
7.4
1
1.2
10.
1 3
.2
3.5
Min
dtre
e Lt
dIT
Serv
ices
660
1
10,8
09
46,
896
55,
710
8,2
99
10,
163
6,0
33
7,2
72
36
43
12.
3 2
0.5
18.
3 1
5.2
4.6
3
.8
13.
1 1
0.3
25.
2 2
5.0
26.
5 2
6.3
Wip
roIT
Serv
ices
542
1
,339
,868
5
12,4
40
560
,902
1
11,9
86
117
,579
8
8,94
3 9
1,51
4 3
6 3
7 3
.0
2.9
1
5.0
14.
6 2
.9
2.5
1
2.4
11.
5 1
9.1
17.
4 1
9.0
17.
2
NIIT
Tech
nolo
gies
IT Se
rvice
s 4
74
29,
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26,
810
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4,7
49
5,0
10
2,7
88
3,0
10
46
50
144
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8.0
1
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9.5
1
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1.6
5
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1
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16.
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7.9
16.
3
Info
sys T
echn
olog
ies
IT Se
rvice
s 1
,210
2
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6
24,4
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704
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90
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1
34,9
20
155
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5
9 6
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Tata
Con
sulta
ncy
IT Se
rvice
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1
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1
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3
06,7
80
328
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48
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1
HCL T
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ies
IT Se
rvice
s 7
15
1,0
08,1
27
455
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4
98,1
15
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567
108
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8
0,66
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8,31
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1
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2
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Pers
isten
t Sys
tem
sIT
Serv
ices
737
5
8,93
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3,12
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8,70
5 4
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4
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2
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3
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3
7 4
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1
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KPIT
Tech
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IT Se
rvice
s 1
65
32,
518
32,
243
33,
766
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56
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15
16.
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11.
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6
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17.
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7.3
Tech
Mah
indr
aIT
Serv
ices
481
4
66,9
07
263
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2
85,9
73
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873
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668
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30
31
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Ente
rtain
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4
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01
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367
69,
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545
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10
14
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orp
Limite
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edia
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6
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Jagr
an P
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ia 1
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ia 8
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1
41GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 40
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
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EFY
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FY17
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FY17
EFY
16E
FY17
EFY
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EFY
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FY17
EFY
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EFY
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E
HMVL
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ia 2
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Eros
Inte
rnat
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als
43
175
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49
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elM
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31
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nta L
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elM
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l Ste
el &
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erM
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alco
Inds
Met
als
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Have
lls In
dia L
tdEL
ECTR
ICAL
S 3
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213
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8
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1
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Finol
ex C
able
s Ltd
ELEC
TRIC
ALS
292
4
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ies L
tdEL
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S 1
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02
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ndus
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ELEC
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ALS
110
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54.
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4.8
-
- 5
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3
Baja
j Ele
ctrica
ls Lt
dEL
ECTR
ICAL
S 2
32
23,
410
47,
064
52,
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3,1
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1
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11.
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rgo
Logi
stics
Logi
stics
148
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8
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VRL L
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d Lo
gisti
cs 3
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Cont
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r Cor
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ex In
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cap
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166
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7
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Praj
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6
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The
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cap
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cap
149
5
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78
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Indr
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asOi
l & G
as 5
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97
7,9
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3.3
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10.
2 9
.6
18.
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14.
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4.1
Petro
net L
NGOi
l & G
as 2
84
212
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2
81,1
50
272
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1
7,25
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3 1
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0,91
9 1
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1
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3.3
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Guja
rat S
tate
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rone
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l & G
as 1
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9.2
1
1.2
43GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 42
CMP
Mkt
Cap
Ne
t Sal
es (R
s mn)
EB
IDTA
(Rs
mn)
PAT (
Rs m
n)EP
S (R
s)
EPS
Grow
th (%
) P
/E (x
) P
/B (x
) EV
/EBI
TDA
(x)
ROE
(%)
ROCE
(%)
Nam
e of
com
pany
Sect
orRs
Rs m
nFY
16E
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EFY
16E
FY17
EFY
16E
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EFY
16E
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EFY
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FY17
EFY
16E
FY17
EFY
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16E
FY17
EFY
16E
FY17
E
Guja
rat G
as Lt
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l & G
as 5
23
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8
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Cadi
la H
ealth
care
Phar
ma
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789
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Sun
Phar
ma
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ma
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ma
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arm
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Labo
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ma
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he 1
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Note
: For
ban
ks, E
BITD
A is
pre-
prov
ision
pro
fit
Phill
ipC
apita
l Ind
ia C
over
age
Uni
vers
e: V
alua
tio
n Su
mm
ary
43GROUND VIEW GROUND VIEW 1 - 31 May 2016 1 - 31 May 2016 42
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