'Buy' Somany Ceramics Maintains HDFC Securities On Robust Retail Distribution, Improved Product Mix

Somany's new large-sized tiles Max plant in Gujarat, with a 4.5 MSM capacity commissioned at the end of January 2024, is expected to boost volume growth and enhance the product mix. We project a 7% tile volume growth for Somany from FY24 to FY27E. .NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities.We recently engaged with Somany Ceramics Ltd.'s management. The management reported stable tile prices but noted continued sluggish demand. However, they observed early signs of demand recovery and expressed optimism for strong tile demand in the coming quarters, citing robust recent real estate sales. They emphasized a strong focus on the balance sheet and working capital management, prioritizing financial stability at the expense of potential growth. The company has no tile segment expansion plans for the next 18 months. We anticipate that the persistent issue of Morbi dumping will continue to hinder tile player volume growth and margins. Somany's newly commissioned large-sized tiles Max plant in Gujarat, with a 4.5 MSM capacity, is expected to drive volume growth and improve its product mix. We project a 7% tile volume growth for Somany from FY24 to FY27.Our forecasts indicate a 7%, 6%, and 11% CAGR for revenue, Ebitda, and adjusted profit after tax, respectively, during FY24-27E. While we maintain our current estimates, our topline and bottom-line projections are ~2% and ~8% below consensus for FY25-27E. We remain positive on Somany due to its robust retail distribution, improved product mix, and efficient working capital management. We reiterate our Buy rating on Somany Ceramics with an unchanged target price of Rs 660/share (22x Sep-26E consolidated EPS)..Click on the attachment to read the full report:.DLF Can Rally 37%, Projects Motilal Oswal, Maintaining 'Buy' — Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

'Buy' Somany Ceramics Maintains HDFC Securities On Robust Retail Distribution, Improved Product Mix

HDFC Securities reiterates Buy rating on Somany Ceramics with an unchanged target price of Rs 660/share (22x Sep-26E consolidated EPS).

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