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Orient Bell Ltd.

BSE: 530365 Sector: Consumer
BSE 00:00 | 18 Jan 365.15 0.05






NSE 00:00 | 18 Jan 365.20 1.60






OPEN 365.05
52-Week high 432.10
52-Week low 191.05
P/E 28.73
Mkt Cap.(Rs cr) 526
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 365.05
CLOSE 365.10
52-Week high 432.10
52-Week low 191.05
P/E 28.73
Mkt Cap.(Rs cr) 526
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Orient Bell Ltd. (ORIENTBELL) - Chairman Speech

Company chairman speech

In 2010, when we acquired Bell Ceramics we had a capacity of 1.45 cr sq mtr p.a. withone plant in North India and were predominantly a North-based company. In FY 2011-12, webecame a Company with a capacity of 2.9 cr sq mtr p.a., three pan-India plants and truly acompany with a nationwide footprint.

What gives me a sense of achievement is that even as the Indian tiles industry grew ataround 15% in 2011-12, your Company grew 86.77% on the strength of the Bell acquisition.Even if we exclude the Bell brand sales in 2010-11, our growth was an impressive 36%.

This noteworthy accomplishment is the result of the Company selecting to grow itsbusiness through organic and inorganic means. Your Company finished the year under reviewwith three plants across North, South and West India, an installed capacity that is thelargest consolidated by any single tile Indian manufacturing company. We also finished theyear under review with a growth in our market share from about 8% to 12%.


We acquired Bell Ceramics in December 2010 which had an enterprise value of around Rs.115 cr. What makes us unique is that we went ahead and acquired an entire listed Companyand merged it successfully to form Orient Bell Ltd. This is the only such acquisition inthe history of Indian tile industry.

Bell represented a perfect fit for a number of reasons:

• Bell possessed two strategically located manufacturing facilities at Dora(Gujarat) and Hoskote (rural Bengaluru), which complemented our existing facility inSikandrabad (Uttar Pradesh). We acquired the company as an extensive national footprintthat would enhance our operational flexibility and enable us to service demand in a quickand cost-effective way.

• The Bell brand enjoyed a strong recall; particularly in South and West markets,which complimented our existing presence in North and East India.

• By adding Bell’s production capacity, we became India’s largest inhouse manufacturering capacity owners.

• There was hardly any overlap between the distribution networks of Bell withOrient, thereby signifiacantly enlarging our dealer network.


We acquired Bell Ceramics with the objective to create a company that would be largerand stronger than the simple aggregation of the two constituents. Our results for 2011-12indicate that our decision has been vindicated.


Sales grew 80.87% to 26.16 mn sq. mtr.

• Gross income increased 86.77% to Rs. 585 cr.


Average realisations increased 9% to Rs. 233 per sq. mtr.

• EBIDTA margin strengthened 28 basis points to 8.71%.

• Net profit grew 37.87% to Rs. 13.47 cr.


The tile is now an established product on account of its superior value-for-moneyproposition considering cost, aesthetics, durability and hygiene.

There is a growing scope for this product for good reasons: there is a progressiveconsumer extension beyond the conventional mosaic, there is a growing aspiration to investin better homes and offices. A relatively small increase in the outlay of tile investmentcan generate a significant improvement in flooring and wall tiling quality, as the use oftechnology has widened product offering to designs, finishes and shades that could noteven be conceived as recent as a couple of years ago.

There is no doubt that the growth of the tile sector is linked to the growth ofinfrastructure. The strong drivers for infrastructure and tile sector growth are risingmiddle-class population and increasing levels of lifestyles, which in turn, driveresidential housing, shopping complexes, food business, educational institutions,hospitals and hotels, among others.

The advent of digital printing on tiles will further expand the market size by carvingaway share from other surface covering products like marble, wood, stone etc. and, at thesame time, widen design offerings to customers while reducing investment in inventory.


At Orient Bell, we are favourably positioned to capitalise on prospective growth due tothe following reasons:

• Although family-owned, we are a professional, merit-led enterprise, havingattracted some of the best competencies, enhanced corporate transparency and created aninstitution around our core values of integrity, quality, customers, agility, partnershipand performance.

• We possess a nationwide footprint through our presence in Uttar Pradesh(servicing North and East India), Karnataka (servicing South India) and Gujarat (servicingWest India), three of the fastest growing regions in India today.

• We possess a complement of brands and brand extensions that enhance customerrecall.

• We are unique in our industry to have a design studio in Castellon, Spain, whichis considered the mecca of international tile design and development.

• We enjoy a vibrant distribution network comprising five Orient Tile Boutiques,over 2000 direct dealers and over 8000 sub-dealers, making it possible for us to reachmost parts of India in a cost-effective way. While the North contributes the largest chunkto our revenue at 41%, East, West and South constitute 17%, 9% and 33% of our revenues,respectively.

• We turned a loss-making Bell around; full year benefits of all the improvementsthat were done during the year will be visible from 2012-13.

• We possess an innovative product pipeline. We filed patents for ‘ForeverTiles’ and ‘Germ Free Tiles’, which will help open new markets. We havedemonstrated that at our company, tile functionality and aesthetics go hand-in-hand. Weare the only company in India to file a patent for ‘Germ Free Tiles’ and perhapsthe only ceramic tile Company in the world to possess two patent-pending products.


Going ahead, we expect to reinforce our business through an aggressive business plan,diversified offerings, balance between risk and reward, growth in India and abroad,integrated services that differentiate us from competitors as well as investments incapabilities that reinforce a high-performance culture.

This blueprint is expected to translate into the manufacture of digital tiles across60-70% of our total production by end-2012-13 and entire production in two years, launchof five more owned Orient Tile Boutiques, more than 50 smaller Orient Tile Boutiques(OTBs) and Bell Tile Boutiques (BTBs) as well as the launch of more innovative products.

In doing so, we are poised to enhance our high-value tile sales and generate a toplineof over Rs. 700 cr., strengthen our margins and enhance value for our stakeholders.

I thank my fellow Board members for their wholehearted support and my entire workforcefor their total commitment during this challenging and exciting period. It is ourassurance that we will remain dedicated to the creation of stakeholder value.

With good wishes!


Mahendra K. Daga

Chairman and Managing Director