The ongoing West Asia conflict has dealt a severe blow to India's ₹53,000 crore ceramic tiles industry, with CRISIL Ratings projecting a 1-2% revenue decline this fiscal year (FY26-27), marking the second consecutive year of fall. According to CRISIL Ratings, exports to the Middle East have been impacted by logistical challenges and supply-chain realignment, with exports constituting 40% of the industry's revenue, with the Middle East accounting for 15% of ceramic exports. Export revenue may decline 6-7% due to the closure of the Strait of Hormuz, which has disrupted deliveries and increased freight and insurance costs. The disruption has not only halted exports to the Middle East but also raised costs for exports to other regions, as reported by Upstox.
GAIL (India) Ltd has issued a swap tender offering two U.S.-loaded liquefied natural gas (LNG) cargoes in exchange for deliveries to India, according to The Hindu BusinessLine. The state-owned company is offering the cargoes for loading on a free-on-board (FOB) basis on April 22 at Sabine Pass, Louisiana, and May 11 at Cove Point, Maryland. In exchange, GAIL is seeking two cargoes for delivery on a delivered ex-ship (DES) basis to the Dahej terminal on April 1-7 and 8-15. The tender closes on March 18, as the company seeks alternative supply sources amid the ongoing West Asia conflict disruption.
As many as 430 ceramic manufacturing units in Gujarat's Morbi have decided to suspend operations for at least three weeks following a disruption in gas supply triggered by the ongoing conflict in West Asia. According to PTI, Morbi, regarded as the country's ceramic hub and the world's second-largest centre for ceramic tile production, has already seen nearly 450 of its 670 factories cease operations due to the shortage. Morbi Ceramic Manufacturing Association president Manoj Arvadiya confirmed that a special meeting of ceramic units was convened on Tuesday, where owners of around 430 units decided to shut down their factories. Units running on propane were the first to halt operations after supplies were exhausted, followed by those dependent on natural gas. The disruption has been linked to the escalating conflict involving Iran, the US and Israel, which has led to the closure of the Strait of Hormuz, a critical chokepoint for oil and gas shipments.
The ongoing LPG crisis has emerged as a major challenge for quick service restaurants (QSRs), with Sapphire Foods leading the decline with -22.01% return over the past month and -34.78% year-to-date, followed by Devyani International falling -18.15% in the last month and -26.17% YTD. According to ET Now, restaurants and QSRs were impacted due to reliance on commercial LPG cylinders for running kitchen operations, leading to elevated operating costs. Food delivery platforms have also been affected due to second-order effects, as restaurants faced constraints in catering to demand. Swiggy has declined -10.47% in the last month and -8.36% YTD, while Zomato has fallen -12.79% in the last month and -14.77% YTD. The crisis particularly affects companies like Varun Beverages, which is the key bottling partner for PepsiCo, and Jubilant FoodWorks Limited, the exclusive franchisee for Domino's Pizza in India.
Gail (India) Ltd's shares have declined about 12% since the conflict in West Asia began, hitting 52-week low of ₹144.50 on Monday. The state-owned company transported 123 million standard cubic meter (mmscmd) of natural gas in 2025, with about 30% coming from sources that pass through or are close to the Strait and are currently stalled. According to Elara Capital, transmission and marketing contributed about 56% and 42% of Gail's Ebit (earnings before interest and taxes) for the nine months ended December (9MFY26), respectively. The marketing segment traded volume of 105 mmscmd in 2025, with its dependency at 16%, thanks to diversified contracts from the US, Russia, and Australia. However, media reports suggest that QatarEnergy would need about four weeks to restart normal delivery even after an agreement is reached, potentially causing meaningful erosion in Gail's Q4FY26 profit.
The government has moved to prioritise gas allocation for essential sectors in response to the supply crunch, issuing the Natural Gas (Supply Regulation) Order, 2026 last week to regulate production, allocation and distribution of natural gas. Under the new framework, domestic piped natural gas (PNG), compressed natural gas (CNG) for transport, LPG production and critical pipeline operations have been accorded top priority. Fertiliser plants fall under the second priority category and will receive 70% of their average consumption, while industrial consumers connected to the national gas grid are to be supplied 80% of their average requirement. The government has also directed full or partial curtailment of gas supplies to sectors such as petrochemicals and power generation. As per Upstox, the ceramic industry is heavily dependent on propane and natural gas, particularly for kiln firing and drying processes, making it highly vulnerable to supply disruptions.
Shares of tiles companies ended with impressive gains on Wednesday, March 18, amid a rebound in the market following a heavy sell-off last week. According to Upstox, Somany Ceramics ended 7% higher at ₹388.40 apiece on the NSE, while Asian Granito India stock ended at ₹60.54, up 0.78% on the NSE. Kajaria Ceramics shares ended 4.2% higher at ₹955.45 apiece on the NSE. Somany Ceramics received communication from GAIL on March 12 stating that gas supplies to industrial consumers shall be maintained at 80% of the past six months' average gas consumption, with effect from March 12, 2026. Asian Granito India received communication from Gujarat Gas and Sabarmati Gas regarding gas supply restrictions due to the Middle East conflict. CRISIL Ratings said the report analysed inputs of 40 manufacturers rated by it, accounting for about a fourth of the industry's revenue.
