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IDBI Capital Report
Somany Ceramics Ltd.'s (SCL) Q4FY23 result was above our and consensus estimates on key parameters as the company reported better than expected sales volume growth of tiles division. Further, our interaction with the management suggests that sales volume off-take to be key driver of net sales improvement in FY24E. Gas prices have corrected in Q4FY23, which has led to EBITDA margin expansion of the company. Net sales increased by 10.1% YoY to Rs 6,792mn, while EBITDA came in at Rs610mn, up by 20.4% over Q4FY22. The company reported net profit of Rs243mn, a robust growth of 42.2% YoY. We have broadly maintained over earnings estimates for FY24E/FY25E. Maintain BUY with a revised target price of Rs 756 (earlier Rs 704), assigning 20x PER on FY25E.
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