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India Tiles: Premium Shift Boosts Big Players
16 Aug
Summary
- Consumers are shifting from basic ceramic to premium vitrified tiles.
- Kajaria, Somany, and Orient Bell show varied stock performance.
- Premiumization aims to drive margins and volume growth.
The Indian tile market is experiencing a significant premiumization trend, with consumers moving towards higher-value vitrified and Glazed Vitrified Tiles (GVT). This shift is driven by increased spending on home finishes and a preference for premium products that offer better realisations.
Leading tile manufacturers Kajaria Ceramics, Somany Ceramics, and Orient Bell are navigating this evolving landscape with distinct strategies. Orient Bell has seen a substantial increase in GVT sales, aiming for margin expansion through its product mix improvement. Somany Ceramics is also increasing its GVT share, backed by operational efficiencies and a plant turnaround.
Kajaria Ceramics, already a market leader with strong margins, focuses on defending its position through volume expansion and capacity additions in GVT. The company aims to maintain its profitability while increasing its market share.
Investors are advised to watch for sustained margin improvements and volume growth, rather than just percentage growth rates, as base effects normalize. Valuations vary, with Kajaria commanding a premium due to its strong performance, while Somany and Orient Bell present opportunities tied to their ongoing recoveries.
