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Corporate Presentation
November 2014
Agenda
Global Tile Industry
Indian Tile Industry
Kajaria Ceramics – overview
Financials
Shareholding Pattern
2
The production of top 10 countries…
(Million Sq Mtr)
CHINA
BRAZIL
INDIA
IRAN
SPAIN
INDONESIA
ITALY
TURKEY
VIETNAM
MEXICO
TOTAL WORLD PRODUCTION
Source: Ceramic World Review
CY09
3600
715
490
350
324
278
368
205
295
204
8581
CY10
4200
754
550
400
366
287
387
245
375
210
CY11 CY12
4800 5200
844
866
617
691
475
500
392
404
320
360
400
367
260
280
380
290
219
229
CY13
5700
871
750
500
420
390
363
340
300
228
9619
10599
11913
11194
48%
6%
3
World production scenario
• In 2013 world tile production reached 12 billion sq. mtr. - up 6.4% over 2012.
• Asia produced 8315 million sqm – up 8.4% over 2012.
Source: Ceramic World Review
4
The consumption of top 10 countries…
CHINA
BRAZIL
INDIA
INDONESIA
IRAN
VIETNAM
SAUDI ARABIA
RUSSIA
USA
TURKEY
CY09
3030
644
494
297
295
240
166
139
173
138
CY10
3500
700
557
277
335
330
182
158
186
155
CY11
4000
775
625
312
395
360
203
181
194
169
(Million Sq Mtr)
CY12 CY13
4250
4556
803
837
681
748
340
360
375
350
254
251
230
235
213
231
204
230
184
226
TOTAL WORLD CONSUMPTION
8535
9491
10436
10932
Source: Ceramic World Review
39%
7%
11574
5
Global consumption Scenario (CY13)
• The break down in consumption by geographical area is very similar to that of production.
• In Asia, the consumption maintained at 66.5% in CY13.
Source: Ceramic World Review
6
Global Scenario …
Per capita consumption of tile (Sq Mtr)
Source: Ceramic World Review
7
Indian Tile Industry
• Indian tile industry is 748 million sq. mtr. as of March 2014.
• Industry size is Rs. 21500 crore as of March 2014.
• National Brands control 50% of industry.
• The industry has been growing at a CAGR of 13 - 14% per annum
in the last 4-5 years.
8
Indian Industry – Major Players
National Brands control around 50% of the Industry
Turnover as on
31.03.2014
(Rs/Cr)
Prism Cement (TBK Division)
2125
Kajaria Ceramics
2024
Somany Ceramics
1328
Nitco Tiles
860
Asian Granito
770
RAK Ceramics
691
Orient Bell Ceramics
633
Varmora *
465
Simpolo *
500
Sun Heart *
400
Murudeshwar Ceramics
154
Others (Marbomax, Decolight, Bell Granito etc)
650
Total
10600
* estimated
9
Balance of the industry is represented by
other regional brands/unbranded players
present in Morbi/ Himmatnagar (Gujarat).
10
Indian Industry – Segmentation
How Kajaria is Catering to all the
segment of the 748 MSM tile Industry (Rs. 21500 Crore)
20
MSM
4
240 MSM
MSM
34
MSM
Manufactured at Gailpur and
Sikandrabad.Total capacity 9.30 MSM
Glazed
Vitrified Tiles
(38 MSM /
Rs. 2500 Crore)
Polished
Vitrified Tiles
Manufactured at Gailpur and Morbi (Jaxx and
Cosa). Total capacity 11.40 MSM. And
outsourcing from Morbi (Gujarat).
(260 MSM /
Rs. 9000 Crore)
10
MSM
440M
Ceramic Wall & Floor Tiles
(450 MSM / Rs. 10000 Crore)
Import Share
Domestic Share
Manufactured at Gailpur, Sikandrabad,
Morbi (Soriso) and Vijaywada
(Vennar). Total capacity 25.90
MSM. Also outsourced from
some units in Morbi.
11
Manufacturing
• Kajaria
started
production
in
August
1988
at
Sikandrabad (UP) with 1 million sq. mtr. per annum.
• Current Capacity of Sikandrabad plant is 9.80 million
sq. mtr. of ceramic floor tiles and glazed vitrified tiles.
12
Manufacturing
Commissioned 2nd Plant in March 1998 at Gailpur
(Rajasthan) with a capacity of 6 million sq mtr p.a. and
further increased the capacity in phased manner. The
present capacity of Gailpur plant is 21.50 millions sq.
mtr. per annum of ceramic wall tiles and vitrified tiles.
13
The total present capacity is 54.10 msm per annum
14
Geographical Spread of the
Tile Production Capacity
9.80 MSM
(Sikandrabad, U P)
21.50 MSM
(Gailpur, Rajasthan)
4.60 MSM
(JV with Soriso, Morbi Gujarat)
5.70 MSM
(JV with Cosa, Morbi, Gujarat)
10.20 MSM
(JV with Jaxx, Morbi, Gujarat)
MSM
Plant
Ceramic Polished Glazed
Vitrified Vitrified
Tiles
Tiles
Tiles
Total
1. Sikandrabad (UP)
3.50
-
6.30
9.80
2. Gailpur (Rajasthan)
15.50
3.00
3.00
21.50
3. Morbi (Gujarat)
4.60
15.90
-
20.50
4. Vijayawada (AP)
2.30
-
-
2.30
25.90
18.90
9.30
54.10
Total
2.30 MSM
(JV with Vennar, Vijayawada,
Andhra Pradesh)
15
Ongoing Expansions /Acqusitions
A. Standalone:
Greenfield Project (Rajasthan)
In the Board Meeting dated 7th May 2014 the company decided to put up 5 MSM annual
capacity of polished vitrified tiles at a new location in Rajasthan. The project is expected to
be completed by June 2015.
Brownfield Project (Rajasthan)
Also, the company, in the Board Meeting dated 1st August 2014 decided to put a brownfield
facility at its existing location in Rajasthan for production of 3 MSM Capacity of ceramic wall
tiles. The production is expected to commence by March 2015.
B. Joint Ventures:
Taurus Tiles Pvt Ltd
The Company has entered into another JV, Taurus Tiles Pvt. Ltd., Which is putting
up an 5 MSM polished vitrified tile capacity at Morbi (Gujarat). Kajaria owns 51%
equity in Taurus. The production is expected to commence by Q4FY15.
16
Diversification
KAJARIA BATHWARE (P) LIMITED
We have incorporated a new company, a wholly owned subsidiary for venturing into allied
products.
a) Sanitaryware: Kajaria Sanitaryware (P) Ltd., in which KBL holds majority
shares, has started the production of sanitaryware on 6th April 2014.
However, the production has started momentum in October 2014. We
hope to achieve full production in Q4FY15.
b) Faucet:The Company has initiated putting up a faucet plant of 1.50
million pieces facility at Gailpur (Rajasthan) at a cost of Rs. 50 crore. The
civil work is in progress. The project is expected to commence operation
in Q1FY16.
17
Distribution Network of Strong & Loyal 900 dealers all Over the country
A stand alone shop that gives dedicated space to
all tile verticals.
A stand alone shop that gives 2000 sq. ft. + dedicated
space to high end tiles made or imported by the
company.
A shop where a dealer gives dedicated space for
display of Ceramic Wall & Floor Tiles without keeping
any other ceramic tile brands.
A shop in shop concept where dealer gives a
dedicated space to Polished Vitrified or Glazed
Vitrified Tile verticals without keeping any other
vitrified tile brands.
Multi brand dealers
The above 900 dealers cater to around 10000 sales points across the country
18
23 Corporate Offices /
Display Centers across the
country
Amritsar
Ludhiana
Dehradun
Chandigarh
New Delhi
Lucknow
Jaipur
Guwahati
Varanasi
Patna
Ahmedabad
Indore
Kolkata
Raipur
Nagpur
Mumbai
Pune
Aurangabad
Hyderabad
Bengaluru
Chennai
Coimbatore
Cochin
Customers / Architects come to select the tiles,
then buy from their nearest dealer.
19
TAKING PART IN EXHIBITIONS ACROSS THE COUNTRY
20
Only Ceramic Tile Company in India
conferred with “Superbrand” for
Seventh consecutive time.
Superbrand is a concept that originated in the UK
in 1993 and currently operating in 86 countires
21
Net Sales (Rs. Crore)
PAT (Rs. Crore)
2000
160
1839
1800
124
1582
1600
120
105
1400
1312
81
1200
1000
80
61
952
800
40
FY-11
FY-12
FY-13
FY-14
FY-11
EBDITA MARGIN (%)
16.00
15.64
15.83
15.65
FY-12
FY-13
FY-14
PAT MARGIN (%)
15.61
8.00
6.37
6.17
FY-11
FY-12
6.61
6.76
FY-13
FY-14
6.00
14.00
4.00
2.00
12.00
0.00
FY-11
FY-12
FY-13
FY-14
22
Debt Equity (X)
Standalone
1.05
Debt (Rs. Crore)
Consolidated
Standalone
Consolidated
330
0.96
320
0.80
0.86
0.82
0.61
0.55
278
230
242
216
180
207
0.32
80
0.17
0.05
Mar-12
Mar-13
Mar-14
0.10
89
Mar-12
Sep-14
Consolidated
Standalone
34.00
32.00
38.00
28.00
Mar-13
32.06
32.00
32
27.91
26.70
26.00
27
27
27.58
27.23
24.00
28
25
23.00
Consolidated
32.51
28.00
25
Sep-14
31.49
30.00
32
Mar-14
Return on Equity (Avg.) *
43.00
33.00
57
30
Working Capital Cycle (days) #
Standalone
236
130
0.41
0.30
280
22
22.00
20.00
18.00
Mar-12
Mar-13
Mar-14
Sep-14
Mar-12
# Capex creditors not considered in working capital cycle.
* ROE as on 30th Sep. 14 taken at average net worth as on 31st Mar. 14 and 30th Sep. 14 and Q2 FY15 PAT.
Mar-13
Mar-14
Sep-14
23
Income Statement
Financial highlights
Q2FY15
(Rs in Crore)
Q2FY14
Standalone
Consolidated
Gross Sales
582.37
591.40
505.19
Net Sales
544.80
537.70
EBIDTA
69.53
H1FY14
Growth
Consolidated
Standalone
Consolidated
Standalone
Consolidated
Standalone
Consolidated
509.81
15%
16%
1128.08
1145.42
964.65
974.60
17%
18%
473.93
463.32
15%
16%
1056.36
1040.63
906.56
887.44
17%
17%
82.74
54.29
67.55
28%
22%
136.02
164.17
108.03
132.44
26%
24%
12.76%
15.39%
11.46%
14.58%
12.88%
15.78%
11.92%
14.92%
2.42
8.41
7.80
11.40
-69%
-26%
4.81
15.97
16.21
23.14
-70%
-31%
Depreciation
10.27
13.54
9.10
11.74
13%
15%
20.13
26.21
18.08
23.23
11%
13%
Profit Before Tax
56.84
60.79
37.39
44.41
52%
37%
111.08
121.99
73.74
86.07
51%
42%
Tax
17.62
19.29
12.81
15.25
38%
27%
35.52
39.79
25.17
29.41
41%
35%
-
1.75
-
2.24
-
-
-
3.87
-
3.94
-
-
49.49
53.29
33.68
38.66
47%
38%
95.69
104.54
66.65
75.95
44%
38%
Profit After Tax
39.22
39.75
24.58
26.92
60%
48%
75.56
78.33
48.57
52.72
56%
49%
Equity
15.12
15.12
14.72
14.72
15.12
15.12
14.72
14.72
5.19
5.26
10.00
10.36
6.60
7.16
52%
45%
Interest
Minority Interest
Cash Profit
EPS (Basic) (Rs)
3.34
Consolidated
H1FY15
Standalone
EBIDTA MARGIN
Standalone
Growth
3.66
55%
44%
24
Shareholding Pattern
As on 30th Sep. 2014
Equity Shares Outstanding – 75.58 millions
NRI's
0.91%
Public / Others
16.34%
FIs / FIIs / Mutual
Funds
30.66%
Promoters
52.09%
The Board in its meeting held on 27th October 2014 has allotted 3885420 equity shares of Rs 2/- each @ Rs. 257.37 per equity shares
(including premium of Rs. 255.37 per shares) on preferential basis to WestBridge Crossover Fund.
25
Forward looking and cautionary statement
Certain statements in this report concerning our future growth prospects are forward looking
statements, which involve a number of risks, and uncertainties that could cause actual results
to differ materially from those in such forward looking statements. The risk and uncertainties
relating to these statements include, but are not limited to risks and uncertainties regarding
fluctuations in earnings, our ability to manage growth, completion, including those factors
which may affect our cost advantage, wage increases in India, our ability to attract and retain
highly skilled professionals, contracts, our ability to commission, our ability to raise the
finance within time and cost, our ability to manage our internal operations, reduced demand
for tiles , our ability to successfully complete and integrate potential acquisitions, withdrawal
of fiscal/governmental incentives, impact of regulatory measures, political instability,
unauthorized use of our intellectual property and general economic conditions affecting our
industry. The company does not undertake to update any forward looking statements that
may be made from time to time by or on behalf of the company.
26
Thank You!
27