FORMING PART OF THE DIRECTORS REPORT Industry Structure and
Development
The Global Ceramic Tiles Market size was estimated at USD 227.09
billion m 2022, and is projected to grow at a Compound Annual Growth Rate (CAGR) of 7,54%
to reach USD 320,50 billion by 2027, Spending in infrastructure is a key diver of global
and regional economies. It is expected that spending on capital projects and
infrastructure will grow significantly in the next decade. The US, China, Japan, Germany,
Australia, Canada, India, Indonesia, Brazil, and Spain are investing large amounts in the
construction industry, with the aim of achieving rapid and sustained economic growth, Asia
Pacific such as India, China, Indonesia, and Vietnam etc. contribute a major share in the
global market due to rapid infrastructural developments in these countries and rising
population and housing sector in the Asian region is also expected to boost demand for
ceramic tiles.
The Indian tile industry is certainly being driven by increased
spending on infrastructure by the government, speeding urbanization, emerging trends, and
the growing need for more infrastructures, further increasing the demand for vitrified
tiles. Growth in the construction of Airports, office spaces, shopping malls, lodging
spaces, and other utility spaces in India is likely to ascend the demand for the products.
About ceramic market and competition:
India is one of the fastest-growing ceramic tile marketplaces at the
global level. The Indian ceramic tiles market size reached 1,125.5 million sq. meters in
2022 and is projected to grow at a CAGR of around 8.2% during the forecast penod, i.e.,
2023-28. The market is driven by concrete government policies and frameworks that have led
to the growth of the real estate sector in the historical penod. Besides, a swift upsurge
in projects demanding immediate beautification of living and working spaces, renovation
and remodeling, construction of new Airport, homes, apartments, commercial establishments,
rapid urbanization of Indian States etc. IS likely to boost the sales of ceramic tiles in
the coming years.
The Indian tile industry is extremely competitive as a result of the
presence of major players as well as various organized and unorganized businesses. Major
firms are creating new items like digital printing and germ-free tiles in order to stay
competitive in the market. Because of the potential for growth, businesses are entering
the sector. However, with technological advancement and product innovation, mid-size to
smaller companies are increasing their market presence by securing new contracts and by
tapping new markets.
Opportunities and Threats:
Rapid industrialization; favorable government policies in emerging
countries, such as China, India, and Russia; expanding foreign investments, increasing
disposable income, and growing focus on interior decoration have resulted in the growth of
the construction industry, which, in turn, drives the demand for ceramic tiles from
emerging economies. The increasing population in India is one of the prime factors for the
increase in demand for the ceramic tiles market. India is urbanizing rapidly and
urbanization boosts the demand for residential and commercial construction markets in the
country, which has fueled rapid growth for the Indian ceramic tiles market. The industry
enjoys some inherent advantages such as abundant raw material from indigenous sources,
advanced infrastructure and low labour costs. Investments are made in housing, smart
cities, and other forms of urban management. Whereas, the ceramic tiles market is
extremely competitive in India. The market has a presence of many global and regional
players. One of the major challenges is the determination of competitive pricing and the
difficulty lies in keeping prices lower than competitors for long enough to gain an
advantage without sacrificing profitability. Apart from these challenges. Ceramic industry
is facing challenges with regards to raw material availability, environmental issues,
social issues, products dumping from China and energy availability and now, Russia vs.
Ukraine Conflict will be biggest threat to the market.
Outlook:
The Ceramic Tiles market is expected to register fluctuating growth
trends in the long term, while inflation and supply chain concerns are expected to
continue in 2023-24. The Global Ceramic Tiles Market size was estimated at USD 227.09
billion in 2022, and is projected to growat a Compound Annual Growth Rate (CAGR) of 7.54%
to reach USD 320.50 billion by 2027. India is one of the fastest-growing ceramic tile
marketplaces at the global level. The Indian ceramic tiles market size reached 1,126.5
million sq. meters in 2022 and is projected to grow at a CAGR of around 8.2% during the
forecast period, i.e. 2023-28.
The tense global geopolitical situation concerns of global economic
slowdown, the Impact of war in Ukraine, lockdowns in China with resurging covid cases, and
the nsks of stagflation envisaging numerous market scenarios are pressing the need for
Ceramic Tiles industry players to be more vigilant and forward-looking. Robust changes
brought in by the pandemic covid-19 in the Ceramic Tiles supply chain.
Segment-Wise or Product-Wise Performance:
ThefinancialperformanceandoperationalperformancehavebeenmorefullydescnbedintheDirectorsReport.
Shareholders may refer to the same in the Directors report and financial statements
for further reference.
(Rs.m lakhs)
Segment |
Sale of Products |
Sale of Serv |
2022-2023 |
11,530.14 |
5,585. |
2021-2022 |
8,224.24 |
4,054. |
> The sale of productshas increased by 41.41% atRs. 11630.14 lakhs
in compared to Rs. 8224.24 lakhs of the previous year
> Sale of services has marginally increased by 37.78% at Rs. 5585.98
lakhs in compare to Rs. 4054.22 Lakhs of the previous year.
Significant change in production pian:
To produce high value GVT, PGVT Vitrified tiles in bigger sizes at Sira
plant and Wall tiles at Karaikal. The figures of different sizes of Vitrified Tiles &
Wall tile production for the year and corresponding period of previous year are given
below:
Size |
2022-23 |
2021-22 |
| Sq. Mtr. |
% to total |
Sq. Mtr. |
% to total |
30 X 30 cm |
93 |
- |
308 |
0.01 |
50 X 60 cm |
12,99,803 |
38.75 |
8,51,924 |
35.84 |
60 X 120 cm |
8,63,564 |
25.75 |
5,44,332 |
22.90 |
Wall Tiles |
11,90,586 |
35.50 |
9,80,306 |
41.25 |
TOTAL |
33,54,046 |
100.00 |
23,76,870 |
100.00 |
Risks and concerns:
The domestic ceramic tiles industry was grappling over past 4-5 years
on account of issues like real estate sector slowdown, demonetization, adoption of RERA,
GST implementation, NBFC funding crisis and covid-19. The Cost of power and fuel are the
largest cost components for ceramic production. Natural gas is the key source of fuel for
the tiles industry and the price of Natural Gas IS increasing day by day The
domestic gas price in Karaikal unit ofyour company is increased by 195% from April-2022.
The natural gas price in Sira unit of your company is also increasing month by month.
The organised manufacturing sector which benefitted from the lower base
as well as softer raw material costs during 2021-22 faced the brunt of rising raw material
costs in 2022-23. Rising costs and unexpected deviations in raw material price levels
destabilize the supply chains and render it difficult for manufacturers to sustain in the
competitive ceramic tiles market. Further, slowdown in demand and elevated level of gas
costs were major cause of concern for Indian ceramic tiles industry, which got reflected
in weak performance of tile players in Q2/Q3FY23.
Discussion on financial performance with respect to operational
performance:
ThefinancialperformanceandoperationalperformancehavebeenmorefullydescnbedintheDirectorsReport.
Shareholders may refer to the same in the Directors report for further reference.
Particulars |
Financial year
2022-23 |
Financial year
2021-22 |
| Standalone |
Consolidated |
Standalone |
Consolidated |
Total Income |
17340.79 |
17340.79 |
12433.21 |
12433.21 |
Total Expenditure |
16603.72 |
16603.72 |
12061.13 |
12061.13 |
Profit /(loss) before Tax
Expense |
737.07 |
737.07 |
372.08 |
372.08 |
Profit /(loss) after Tax
Expense |
660.30 |
660.30 |
214.70 |
214.70 |
Other comprehensive income |
- |
(42.54) |
56.65 |
56.65 |
Comprehensive Income |
617.76 |
617.76 |
271.35 |
271.35 |
Profit or (loss) of an
Associate |
- |
25.45 |
- |
(48.95) |
Total Comprehensive income |
617.76 |
643.21 |
271.35 |
222.40 |
Earing Per share: Basis |
1.08 |
1.13 |
0.49 |
0.40 |
: Diluted |
1.03 |
1.07 |
0.47 |
0.39 |
Internal control systems and adequacy:
The Companys Internal Control System, is line with its size,
scale and complexity of operations and with the requirement of Companies Act 2013, which
is intended to increase transparency and accountability in an organizations process
of designing and implementing a system of internal control. The Company has also appointed
a practicing chartered accountant to conduct the internal audit and to submit a report to
the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of
internal control system in the company, its compliance with operating systems, accounting
procedures and policies at all locations of the company
Material development in human resources/ industrial relations:
Over the last year Human Resource Department has taken various
initiatives for employee benefit and retention. Management also continues to give due
importance for Manpower training and motivation from time to time. The Company continued
to engage services of senior level personnel even at branches level to ensure better
control and coordination. The understanding between the Management and workers continues
to be cordial. As at the end of the year the Company had 295 employees on the rolls.
Details of significant changes in key financial ratios:
During the year under review, the followings are significant changes
(i.e., changes of 25% or more as compared to the immediate previous financial year) in key
financial ratios have been occurred. Please Financial Statements may be referred for more
details.
Ratio |
FY
2022-23 |
FY
2021-22 |
Variance
(%) |
Remarks |
Debt Equity Ratio |
0.15 |
0.05 |
22S.61 |
Additional Borrowings in the
current year to the extent of Rs. 4,351.61 lacs to part finance the ongoing Expansion
project have made significant impact on Debt Equity Ratio |
Debt Service Coverage Ratio |
1.17 |
2.13 |
(44.99) |
Covid Loans & GECL Loans
availed during the period of pandemic have been repaid |
Return on Equity |
0.02 |
0.01 |
(121.00) |
There is an increase in
profitability for the current year. |
Inventory Turnover Ratio |
1.50 |
1.13 |
32.03 |
There is increase m sales
turnover in the current year compare to previous year. |
Trade receivables turnover
ratio |
9.04 |
4.57 |
95.51 |
The receivable is reduced
even though there is increase in sales turnover in the current year. |
Net capital turnover ratio |
4.50 |
2.17 |
107.77 |
Substantial increase m Working
Capital Gap. |
Net Profit Ratio |
0.04 |
0.02 |
(62.31) |
Substantial increase in
profitability. |
Details of any change in return on net worth as compared to the
immediately previous financial year along with a detailed explanation thereof:
There are no major changes in return on Net Worth as compared to the
immediately previous financial year except carry forward profit or losses. However, return
on net worth was impacted due to higher profitability. Please Financial Statements may be
referred for more details.
Disclosure of accounting treatment:
The financial statements have been prepared in accordance with Indian
Accounting Standards (Ind AS), the provisions of the Companies Act, 2013 (to the extent
notified) and guidelines issued by SEBI. Your Company has been adopted "IndAS"
since Apnl 01, 2017. There are no changes in accounting treatments for the financial year
ended March 31, 2023.
Cautionary statement:
Opportunities, threats, outlook, forecasts etc. in any form and manner,
made in this section or any other sections of this Annual Report are purely based on
certain assumptions and expectation of future event, actual results could differ from
those expressed or implied. Important factors that could make a difference to the
Companys operations include economic conditions affecting domestic demand supply
conditions, finished goods prices, changes in Government Regulations and Tax regime, etc.
The Company assumes no responsibility to publicly amend, modify or revise any
forward-looking statements on the basis of subsequent developments, information or events.
Place; Bengaluru Date: 05.08.2023
By Order of the Board For Murudeshwar Ceramics Limited Sd/-
Satish Rama Shetty Chairman & Managing Director DIN: 00037526
By Order of die Board For Murudeshwar Ceramics Limited Sd/-
Naveen Rama Shetty Director DIN:00058779
+91-9892691696
