Costs Escalate For Morbi’s Ceramic Units Amid Buoyancy In Exports: ICICI Securities
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ICICI Securities Report
Morbi’s exports of ceramic tiles continue unabated with November 2020 crossing the Rs 10 billion mark for the fourth successive month.
Amid the rising exports, Morbi’s costs too have risen due to -
1. increase in gas prices by Gujarat Gas Ltd. with-effect-from December 24, 2020 with discounts being slashed from Rs 4.5/ standard cubic meter to Rs 0.5/scm,
2. sharp increase in inland transportation costs, and
3. surge in sea freight rates amid container availability woes.
While Morbi players’ increasing impetus on exports would sustain market share gains for the top branded players, the recent surge in gas and freight costs would dissuade them from disrupting prices in the domestic space in the near term.
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