The Indian Glass industry has been growing across all segments. This growth has been driven primarily by India's growing automotive and construction sectors in which glass is used. The container glass industry benefits from growing awareness on account of rising hygienic packaging demand, growing population, increasing per capita income of average Indians and low per capita glass consumption. Incidentally, the per capita glass consumption in India for container glass is 1.2 kg, which offers tremendous scope for rise.

The growth of Indian market for glass and glass products in the past few years has been phenomenal. In geographical terms, the South Indian region dominated by Bangalore, Chennai and Hyderabad remains to be a major market for glass and its products. Efforts by manufactures to create awareness among the users for glass have increased the demand further more. Many international players are also entering the Indian glass market, thereby paving way for world-class standards of quality. This is also a factor that is driving growth in this sector.

In the quarter ended September 2011, the profitability of many major glass and glass products manufacturing companies was dampened by the raising raw material, power and fuel cost costs and interest rates. Major players such as Hindusthan National Glass, are planning for further price hikes in order to offset the higher cost and also to mitigate the cost pressure of the past.

The aggregate Net Sales of 14 glass and glass product manufacturing companies remained flat at Rs 1230 crore during the quarter ended September 2011. Their OPM declined by massive 1400 bps to 16.7% impacted mainly due to the increasing raw material prices. As a result, the operating profits declined by 14% to Rs 205 crore during the quarter under review. Interestingly, the other income improved by 333% to Rs 13 crore which restricted the fall in PBIDT to 10% at Rs 218 crore. The interest cost fell by 3% to Rs 77 crore as result the PBDT declined by 12% to Rs 141 crore. The 4% dip in the provision for depreciation to Rs 91 crore led the PBT to fall by 24% to Rs 50 crore. After accounting tax of Rs 13 crore, down by 32% from the corresponding quarter last year, the Net Profit declined 21% to Rs 37 crore.

The rising costs have dented the margins of the Indian glass sector. However, the major players have initiated price hikes, which can partly restore their margins. Considering strong demand growth projections for the medium term, the industry is in the midst of capacity expansions and introducing new technologies. The Glass industry in India is poised grow rapidly owing to the raising disposable income, increasing consumption and higher penetration level.

The sluggishness in key user industries like automotive and construction etc has affected the pace of growth in demand of the sector. With interest rate hikes over, and as India is entering the pause pace, interest sensitive sectors like automobile, construction etc can witness acceleration in the pace of growth in demand, which can add glow to the Indian glass sector.