According to leading tiles manufacturers, price fall in Glazed Vitrified Tiles (GVT) has abated and they expect no further price correction in the coming months. However, price is unlikely to rise from the current level due to excess GVT manufacturing capacity in Morbi area and tiles makers expect the price to languish at the current level for next 2-3 quarters.
GVT prices came under pressure in the second half of last financial year due to additional capacities going on stream, especially amongst unorganized players. Price war had become intense in the fourth quarter of the last financial year and had continued in April too. It is believed that most of the players who have set up plants recently are operating at breakeven level and further correction in GVT price will force them to shutdown production.
GVT manufacturers last year had received double whammy in the form of falling price and rising gas prices. Till recently gas price was consistently moving up in tandem with crude oil price. Also, rupee depreciation during the same period has not helped the cause of LNG users who had to shell out more for the gas supplied. However, now the major manufacturers of tiles say that there are signs of gas prices getting stabilised and they don’t expect the price to go up from the current level.
Also, the manufacturers in organised sector complain that unauthorised sales, that is, sales without raising bills, take place even today and they attribute it to poor surveillance mechanism which has failed to prevent such sales. Once the surveillance mechanism improves things should improve for the tiles manufacturers. However, this may take at least 2-3 quarters to happen.