Investment opportunities are all around us, often these opportunities go unnoticed. One such industry which is often overlooked is the Indian ceramic industry. In this article, we take a look at the Indian ceramic industry and the top ceramic stocks in India. Keep Reading to find out!
Table of Contents
About the Indian Ceramic Industry
You may wander out of all the industries we could look into, why the ceramic industry. Not known to many the Indian ceramic industry is the second largest in the world.
However, despite being the second largest the market disparity between India and China is humongous.
As of 2020, China had a production capacity of 8,474 million square meters. India on the other hand pales in comparison to this producing 1,320 million square meters.
But this difference also brings with it a silver lining. With the world desperate to find an alternative to China, India becomes the next stop for global ceramic shoppers.
With such a huge market gap to fill if it stands up to the opportunity presented, Indian companies could stand to benefit.
Top Ceramic Stocks in India
Top Ceramic Stocks in India #1 – Kajaria Ceramic
| Face Value (₹): 1 | ROE (%): 17.29 |
| Market Cap (Cr): ₹14,558Cr | Net Profit Margin: 11.11% |
| EPS (₹): 26 | Current Ratio: 2.81 |
| Stock P/E (TTM): 35.56 | Debt to Equity: 0.05 |
| Dividend Yield (%): 1.09 | Promoter’s Holdings (%): 47.51% |
Kajaria Ceramics is the largest manufacturer of ceramic and vitrified tiles in India. This company alone has a production capacity of 73 million square meters.
The company has a total of eight plants all equipped with the latest technology in the industry. Their product category includes kitchen tiles, bathroom tiles, wall tiles, floor tiles, and exterior wall tiles.
Let us take a look at the financials of the company. Being the largest company in the country the company has a Mcap of Rs. 14,558 crores.
When we take a look at the revenues their revenues followed an upward trend from 2017 to 2019 from Rs. 2549 crores to Rs. 2956 crores.
However post the pandemic, being a labour intensive and infrastructure dependant industry the company’s revenues have stagnated too.
However, despite the stagnation in its revenues, its profits have grown from Rs. 228 crores in 2019 to Rs. 308 crores in 2021.
Its 3-year profit CAGR stands at 16.24%. The company comes with very minimal debt.
It has a debt-equity ratio of 0.05. The financials of the company keep getting better as it has provided a good ROE and ROCE of 16.48% and 20.48% as of March 2021.
However, the stock currently trades at a PE of 35.65 which is above the industry average of 27.3.
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Top Ceramic Stocks in India #1 – Cera Sanitary
| Face Value (₹): 1 | ROE (%): 12.17 |
| Market Cap (Cr): ₹5,562.22 Cr | Net Profit Margin: 8.16% |
| EPS (₹): 111 | Current Ratio: 2.42 |
| Stock P/E (TTM): 38.75 | Debt to Equity: 0.06 |
| Dividend Yield (%): 0.31 | Promoter’s Holdings (%): 54.48% |
Cera Sanitary is the second largest ceramic stock in India. The company has a product portfolio of 114 products.
Their products include Sanitaryware, Faucets, Tiles, kitchen sinks, tiles, mirrors, etc. Their brands include Isvea, Senator, and Jeet.
The company has a market cap of Rs. 5,562 cr. Similar to Kajaria Ceramics the revenues of Cera too increase from 2017 to 2019.
Their revenues increase from Rs. 1008 cr to Rs. 1351 cr. during this period. And similar to industry leaders their revenues fall post the pandemic to Rs. 1224 cr.
However, unlike its peers, its profits have been on a decline from Rs. 115 cr to Rs. 99 cr. Its 3-year profit CAGR stands at -2.97%.
The company comes with very minimal debt. It has a debt-equity ratio of 0.06. The financials of the company keep getting better as it has provided a good ROE and ROCE of 11.56% and 14.97% as of March 2021.
However, the stock currently trades at a PE of 38.55 which is above the industry average of 27.3.
Here Is A List Of Ceramic Stocks In India
| Name of the Company | Market Cap (Rs. in cr) |
|---|---|
| Kajaria Ceramic | 14,558.41 |
| Cera Sanitary | 5,562.22 |
| Somany Ceramics | 2,621.80 |
| Pokarna | 1,898.06 |
| HSIL | 1,787.91 |
| Orient Bell | 814.12 |
In Closing
It is without a doubt that the Indian ceramic industry holds the potential to become the largest in the world. The industry is currently looking to double its income by 2024.
The growth of the Indian ceramic industry is driven by growth in construction opportunities in the country. The industry is expected to have a CAGR of 8% over the next few fiscals.
That’s all for this post, let us know what you think about the ceramic industry in the comments below. Happy Investing!
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Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
