Asian Granito India Limited

Company Profile
Asian Granito India Ltd (AGIL), started as a ceramic tile-manufacturing unit under
the name M/s Kedia Cera Tiles Private Ltd in 1993. With the change of
management in September 2002, the company’s name was changed to M/s Asian
Granito India Ltd. With an initial vitrified tiles manufacturing capacity of 4000 sq
mts per day, today AGIL has emerged as one of the leading manufacturers of
vitrified tiles in India with a capacity of 14000 sq mts per day of vitrified tiles as on
July 2007. AGIL’s plants are set up in the ceramic zones of Dalpur, Himmatnagar &
Sabarkantha, Gujarat. AGIL caters to a wide spectrum of consumers through a vast
range of products at various price points - either made designs or customized as
per client requirement. It has the ability to provide most of the major tiling
solutions under one roof. AGIL has a subsidiary named Asian Tiles Limited (ATL),
for manufacture of ceramic tiles. ATL commenced manufacturing in 2000 with a
capacity of 2500 sq mts per day, which currently stands at 7000 sq mts per day.
To expand its product portfolio, AGIL is setting up a wall tile unit with a capacity of
3.4mn sq mts pa. The vitrified manufacturing capacity is also being expanded from
14,000 sq mts per day (5.11mn sq mts pa) to 16000 sq mts per day (5.84mn sq
mts pa). AGIL has advantage over other manufactures due to their proximity to the
raw material source (clay, quartz and feldspar are found abundant in Rajasthan
and receive imported Ukraine clay from Kandla port) and use of natural gas, which
is cheaper(~20-25%) as compared to the use of LPG for production purpose.



Objects of the issue
Setting up of wall tile unit (Rs486.86mn)
Modernization and expansion of the existing vitrified plant (Rs126.79mn)
General corporate purposes
Valuation
At the price band of Rs85-102, AGIL is expensively priced at 8.5x to 10.2x FY07
post issue diluted EPS. AGIL’s cost advantage (proximity to raw material source
and port, use of natural gas), diversified sales distribution (West-44%, South-31%,
North-20% & East-5%) are the key positives for the company. The risks include
competition from cheap Chinese imports and unorganized players, changes in the
regulatory framework for the industry and downturn in construction industry.