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IDBI Capital Report
Somany Ceramics Ltd.'s Q4 FY24 result was slightly better than our estimates on key parameters. The company reported another quarter of subdued volume growth as domestic demand continued to be sluggish and lower exports from Morbi raised competitive intensity in the domestic market.
The management has guided lower double digit net sales growth in FY25E, which would be majorly driven by higher volume. Net sales was higher by 8.6% YoY to Rs 7,375 million, while Ebitda came in at Rs 795 million, up by 30.3% YoY.
Somany Ceramics reported net profit of Rs 339 million, up by 38.9% YoY. We have broadly maintained our earnings estimates for FY25E/FY26E.
Post recent stock price correction, valuation looks attractive at current level. We upgrade the stock to Buy with a revised target price of Rs 765 (earlier Rs 775), assigning 18 times price-to-earnings ratio on FY26E.
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