PROFILE

INTRODUCTION:
Granite know as king of stones because of its inherent characteristics such as extra fine mirror polish, scratch free glossy surface and durability.

Indian granite has become the most sought after and extensively used stone material in building constructions and massive structural works throughout the world and is well known in the international market not only for its elegance and aesthetic quality but also for its durability.
India accounts for 30 per cent of the worlds export of high quality natural stones like granite, marble, sandstone. India has emerged as one of the leading countries in the production and export of granite and other stones

India has vast resources of granite with about 1120 varieties of different colours and textures. The industry is producing a wide range of granite based products, viz. granite tiles, slabs/blocks, monuments, tombstones, table tops and several handicraft items like Costume jewellery boxes, ashtrays, pen stands, paper weights etc. INDIAN SCENARIO:

The granite industry in India is concentrated mainly in the states of Karnataka, Andhra Pradesh, Tamil Nadu and Rajasthan. Realising huge potential of granite, many others states have set up granite units. These include: Orissa, Madhya, Assam, Gujarat, Maharashtra and Bihar. Chemicals and allied products export promotion council(capexil) has submitted a proposal to the ministry of commerce and industry, government of industry for creating a mineral up gradation fund worth Rs 5,000 crores. Demand for Indian granite both in the domestic & foreign markets has been increasing.

PRODUT CONSTRAINTS: One of the most disturbing trend witnessed in the export of Indian granite in recent years related with China emerging as the major importer of Indian rough granite. Another constraint which the granite industry today is facing relate to technological impediments. Only 20 per cent of the total 10,000 quarries both large and medium sized in India resort to mechanized extraction of stones. Indias ExportsCountry wise: USA continues to be the largest market for Indian granite and granite-based products. There was a phenomenal increase in exports to this market .over the previous year when the same reached a level of Rs. 3,490.58 crore as against Rs. 2,562.26 crore in the previous year. The other markets showing a steep growth during the period comprised

EXPORT STRATEGY: There is a need to evolve a suitable export strategy to tap tremendous export potential of granite. Some of the points to be made in the strategy should include (i)Modernising the industry by providing all govt. support viz. R&D activity and liberal policy for import of latest machinery for mining, cutting and processing of granites at the concessional rate of duty; (ii) Restricting export of rough granite to enable the Processing units to source the same without any hurdles;

(iii) Upgrading granite as a Major Mineral. At present, it is classified as a minor mineral coming under the states list;
(iv) Putting granite in the list of principal export products. The data on principal export commodities from India is being compiled by the Directorate General of Commercial Intelligence & Statistics (DGCI&S) in the Annual Publication entitled Foreign Trade Statistic of India Principal Commodities & Countries.

TOOLS OF ANALYSIS
1. Cost Structure:

2. Operating Performance:

3. Financial Performance:

100

100
4. Growth Rate:

Where

= current year
= base year

r = growth rate

5. Trend analysis:
Y=a + bx

In order to determine the values of the constants a and b the following normal equations are to be solved.
y = Na + bx --- (1) (x y) = a x + b ---- (2)

6. Coefficient of correlation:

ANALYSIS OF DATA
1. Cost structure: Table 1. Calculation of cost structure during 2003-2008 S.no 1 2 3 4 particulars sales Raw material Power & fuel Compensation to employees Interest paid Depreciation 2003 678.77 283.29 37.84 55.52 2004 891.21 340.92 42.83 59.9 2005 874.27 359.86 44.39 61.57 (Rs in crores) 2006 765.96 378.71 37.12 43.79 2007 907.38 410.29 45.04 73.64 2008 845.02 359.86 43.79 77.08

5 6 7 8 9

59.81 34.87

44.13 36.07 507.46 150.2 0.295

20.46 36.48 470.03 150.2 0.319

21.80 38.95 350.13 150.2 0.428

22.5 40.57 452.05 150.2 0.332

45.65 38.09 441.37 150.2 0.340

Value added 357.64 (1-2-3) Fixed 150.2 charges(4+5+6) Cost structure (8/7) 0.419

Graph 1

Interpretations: From the above table graph it is observed that the cost structure of the granite industry showing slight fluctuations and it is high in the year 2007 because of increased interest, depreciation and employee compensation.

2. Operating performance:
100
Table 2. Calculation of operating performance during 2003-2008 (Rs in crores) Year 2003 2004 2005 2006 2007 2008 EBIT 66.77 145.57 106.20 83.74 86.48 82.09 Graph 2 Net assets 1139.52 1085.25 1139.86 1016.17 1467.72 1502.84 Ratio (%) 5.85 13.41 9.31 8.24 5.89 5.46

Interpretation: The table shows the operating performance of the industry. Initially it is low but in the next year it has increased and after that the operating performances is gradually decreased, it is because of decrease in EBIT.

3. Financial performance:
100
Table 3. Calculation of financial performance during 2003-2008 (Rs in crores) Year 2003 2004 2005 2006 2007 2008 Profit after tax Net worth -1.78 151.05 93.96 300.2 72.65 471.62 53.71 296.96 51.7 468.54 23.95 477.83 Graph 3 Ratio(%) -1.1 31.2 15.4 18.0 11.0 5.0

Interpretation: The table shows the financial performance of the industry. It is observed that the financial performance shows fluctuations during the study period. During 2003 it is very low and in the next year it has a drastic growth due to increase in PAT, and later there is a gradual decrease of financial performance due to decrease in PAT.

4. Growth rate of sales:

Where

= current year
= base year r = growth rate

Table 4. Calculation of growth rate of sales (Rs in crores) Year 2003 2004 2005 2006 2007 2008 sales 789.51 678.77 815.61 712.84 873.53 805.61 Growth rate ---0.1402 0.2015 -0.1260 0.2254 -0.077

Interpretation: It is observed that the growth rate of sales is fluctuating. The growth rate in 2008 is negative because of the less growth in sales.

5.TREND ANALYSIS
Y=a + bx y = Na + bx --- (1) (x y) = a x + b ---- (2)

5.1. Trend analysis for sales: Table 5.1 Year 2003 2004 2005 2006 2007 2008 Estimated sales for 2009: Estimated sales for 2010: Sales 678.77 789.51 815.61 712.84 873.53 805.61 857.66 880.04 (Rs in crores)

Interpretation: The estimated sales for 2009 is 857.66 The estimated sales for 2010 is 880.04

5.2. Trend analysis for profits:

Table 5.2
Year 2003 2004 2005 2006 2007 2008 Estimated profits for 2009: Estimated profits for 2010: Profits

(Rs in crores)
106.69 183.56 143.89 124 127.3 120.2 122.16 118.70

Interpretation: The estimated profits for 2009 is 122.16 The estimated profits for 2010 is 118.70

Coefficient of correlation:
6.1. Correlation between income and expenditure:

Table 6.1
Year
2003 2004 2005 2006 2007 2008

Income
714.56 891.21 874.27 765.96 907.38 845.02

(Rs in crores) Expenditure

726.34 801.56 816.99 713.07 887.36 856.06 0.8474

The value of co-efficient of correlation is: Graph 6.1

Interpretation: The above table shows the co-efficient of correlation between Income and Expenditure of industry. The co-efficient of correlation is 0.8474 indicates positive relationship between Income and Expenditure.

6.2. Correlation between sales and profit: Table 6.2 Year

2003 2004 2005 2006 2007 2008

(Rs in crores) profit

678.77 789.51 815.61 712.84 873.53 805.61 106.69 183.56 143.89 124 127.3 120.2

sales

The value of co-efficient of correlation is: Graph 6.2

0.340659

Interpretation: The above table shows the co-efficient of correlation between sales and profits of the industry. The co-efficient of correlation is 0.3406 indicates positive relationship between sales and profit.

6.3. Correlation between current assets and current liabilities: Table 6.3 Year
2003 2004 2005 2006 2007 2008

(Rs in crores) Current liabilities

602.23 603.67 629 541.61 822.5 771.34 376.48 310.61 274.81 293.6 355.66 340.36

Current assets

The value of co-efficient of correlation is:

0.45976

Graph 6.3

Interpretation: The above table shows the co-efficient of correlation between current assets and current liabilities of the industry. The co-efficient of correlation is 0.4597 indicates positive relationship between current assets and current liabilities.

6.4.Correlation between profit after tax and net worth:

Table 6.4
year
2003 2004 2005 2006 2007 2008

(Rs in crores)
Profit after tax
-1.78 93.96 72.65 53.71 51.7 23.95

Net worth
151.05 300.2 471.62 296.96 468.54 477.83

The value of co-efficient of correlation is:

0.333687

Graph 6.4

Interpretation: The above table shows the co-efficient of correlation between profit after tax and net worth of the industry. The co-efficient of correlation is 0.3336 indicates positive relationship between profit after tax and net worth.

6.5. Correlation between working capital and sales:

Table 6.5
year
2004 2003 2005 2006 2007 2008

(Rs in crores)
Working capital
293.06 225.75 354.19 248.01 466.84 430.98

sales
789.51 678.77 815.61 712.84 873.53 805.61

The value of co-efficient of correlation is: Graph 6.5

0.91181

Interpretation: The above table shows the co-efficient of correlation between working capital and sales of the industry. The co-efficient of correlation is 0.9118 indicates positive relationship between working capital and sales.

6.6. Correlation between investments and expenses: Table 6.6 Investments (Rs in crores) Expenses
48.11 31.57 32.85 26.69 145.36 146.53 726.34 801.15 816.99 713.07 887.36 856.06

year
2004 2003 2005 2006 2007 2008

The value of co-efficient of correlation is: Graph 6.6

0.7765

Interpretation: The above table shows the co-efficient of correlation between investments and expenses of the industry. The co-efficient of correlation is 0.7765 indicates positive relationship between investments and expenses.

SWOT ANALYSIS
STRENGTHS:

Inherent characteristics such as extra fine mirror polish scratch free glossy surface & durability. It has vast resources of granite with about 112o varieties of different colours & textures. The industry is providing a wide range of granite based products.
WEEKNESS:

No government subsidies to the granite industry on par with iron ore industry to overcome crisis. Small size of Indian companies High cost of labour.
OPPORTUNITIES:

Rapid domestic growth With the emergence of Dimension Stone Granite (DSG) as a major foreign exchange earner, next only to iron ore, the GSI has set out, in 1992-93, on a long-term programme of assessing the resource potential of this commodity in the country. Dimension stone granite appraisal by granite industry in India

THREATS:

In recession time the industry had to reduce the product price by 20 30%. Demand from us is reduced by 50%, demand from China & Europe has dropped by nearly 30%. Major threat for the industry is to payment of 12.5% of service tax on the commission paid to agents abroad for getting business.

FINDINGS
The cost structure of the granite industry showing slight fluctuations and it is high in the year 2007 because of increased interest, depreciation and employee compensation. The operating performance of the industry at initially it is low but in the next year it has increased and after that the operating performances is gradually decreased, it is because of decrease in EBIT. The financial performance of the industry shows fluctuations during the study period. During 2003 it is very low and in the next year it has a drastic growth due to increase in PAT, and later there is a gradual decrease of financial performance due to decrease in PAT. It is observed that the growth rate of sales of the industry is fluctuating. The growth rate in 2008 is negative because of the less growth in sales. The co-efficient of correlation between Income and Expenditure of industry is 0.8474. It shows that there is a positive relationship between Income and Expenditure

The co-efficient of correlation between Sales and Profit of industry is0.3406. It shows that there is a positive relationship between Sales and Profit. The co-efficient of correlation between Current assets and Current liabilities is 0.4597. It shows that there is a positive relationship between Current assets and Current liabilities. The co-efficient of correlation between Profit after tax and Net worth of industry is 0.3336. It shows that there is a positive relationship between Profit after tax and Net worth The co-efficient of correlation between Working capital and Sales of industry is 0.9118. It shows that there is a positive relationship between Working capital and sales The co-efficient of correlation between Investments and Expenses of industry is 0.7765. It shows that there is a positive relationship between Investments and Expenses.

CONCLUSION
The granite industry is one of the largest developing industries in India. The cost structure of the industry is fluctuating and operating performance efficiency decreases year by year of the industry. Financial performance shows weak financial position of the industry. Growth rate of sales indicates decrease in demand for granite in India. Hence, in overall, the industrys financial position is considered to be poor.