Floods add to agony of tiles makers

Floods add to agony of tiles makers

Even Somany Ceramics is now less optimistic about its prospects during the current financial year than the company was in the beginning of the year

Recent spate of floods across the country has further pulled down the sentiment tiles manufacturers who have now ruled out industry posting double digit growth in the financial year. According to some leading tiles manufacturers sentiment on the ground has turned weak for the past few months and the off take too is sluggish. According to them, demand has largely been flat for the industry in the past few months. Some also feel that ravaging rainfall in September may curtail the demand for festive season.

It should be noted that ongoing slowdown in real estate industry has already its impact on ceramics industry which sees lesser growth in volume in the coming months than had earlier estimated. For example, Kajaria Ceramics, the largest manufacturer of ceramic/vitrified tiles in India and the 9th largest in the world, has cut down its full year volume guidance from 15% to 12-13%. Even Somany Ceramics is now less optimistic about its prospects during the current financial year than the company was in the beginning of the year.

Though there are good news on natural gas front the cost of which has gone down in dollar terms, recent rupee value fall may dampen the spirit and take away the advantage, especially for those who don’t have export income. However, those who have substantial exports income are thinking of passing on part of the benefit to the customers.

Industry people, however, rule out large scale price discounts of the scale seen during last year but possibility of temporary price cuts may be resorted to achieve volume. However, such cuts may be at the distributors level and also may be temporary in nature.

Interestingly, most of the players are giving added focus in working capital management and efforts are on to ensure that debtors outstanding doesn’t increase in terms of number of days. Most of the manufacturers are comfortable with debtors outstanding of around 85 days.

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