Somany Ceramics Q2 Results Review - Expect Demand To Revive In H2, Retain 'Buy': Yes Securities

BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Yes Securities Report.Somany Ceramics Ltd. registered a steady volume growth of 6% YoY and 10% QoQ amidst the sluggish demand scenario in domestic markets. Own volumes declined by 13% YoY and 2%QoQ, while joint ventures volumes reported a growth of 5% YoY and 9% QoQ and outsourced volumes improved sharply by 48% YoY and 30% QoQ. Blended average selling price improved marginally to Rs 333/msm as against Rs 329/msm in previous quarter. While Somany Ceramics' Ebitda margins expanded to 9.8% as compared to 6.8%/8.6% in Q2 FY23/Q1 FY24 respectively, largely owing to better operating utilisation which came in at 88% versus 70% in previous quarter. Bathware biz registered a growth of 18% YoY and 10% QoQ while others biz (Epoxy, Adhesives etc), reported a growth of 46% YoY and 23%QoQ. Utilisation of Sanitaryware & Faucets stood at 52% & 69% respectively..Management stated that volume and value is expected to grow in high-single digit for FY24 and Ebitda margins are likely to remain at ~10%, provided that there is no major escalation in energy cost. Moreover, with better product-mix, margins can inch upwards..Demand is expected to pick-up from hereon owing to strong ramp-up in new home constructions and infra projects. Hence, we believe Somany Ceramics should register a volume compound annual growth rate of 11% over FY23-FY25E. Moreover, with improving product-mix and better operating leverage, Ebitda margins are expected to improve to 10.5% by FY25E. At current market price, the stock trades at price/earning of 24 times/17 times on FY24E/FY25E EPS of Rs 28.5/Rs 40 respectively. We continue to value the company at price/E of 20 times on FY25E EPS, arriving at a target price of Rs 797. Hence, we maintain our 'Buy' rating on the stock..Click on the attachment to read the full report:.Kajaria Ceramics Q2 Results Review- Lower Volume Guidance, Margin Improved: Prabhudas Lilladher.DISCLAIMERThis report is authored by an external party. BQ Prime 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 BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Somany Ceramics Q2 Results Review - Expect Demand To Revive In H2, Retain 'Buy': Yes Securities

With improving product-mix and better operating leverage, Ebitda margins are expected to improve to 10.5% by FY25E

NDTV Profit

NDTV Profit

Follow Us

DISCOVER US FASTER

DOWNLOAD THE APP