Confident of achieving 20% growth in FY15: Somany Ceramics

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26 Aug, 2025 12:21

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Somany Ceramics, a formidable and leading player in the Indian tile segment reported better than expected third quarter performance. The Company reported net profit at Rs 11 crore versus Rs 4.8 crore in the same period year ago. Net sales too were up 30.9 percent at Rs 371.2 crore versus Rs 283.5 crore year-on-year.Talking about the company's performance, Abhishek Somany, JMD, Somany Ceramics said they are confident of maintaining 20 percent FY15 growth guidance and look at similar growth for FY16 too.According to him the company is also confident of maintaining 0.5-0.6 percent year-on-year growth in profit before tax (PBT) margins.The 19.6-19.7 percent volume growth was mainly on back of value addition  mix, said Somany.Below is the transcript of Abhishek Somany's interview with Nigel D'Souza and Sumaira Abidi on CNBC-TV18.Nigel: Could you tell us firstly with regard to your product mix, how did that pan out for the quarter and your margins at 6.5 percent are looking good?A: The product mix has again improved. It has been improving sequentially and also year-on-year (Y-o-Y). So that model keeps continuing as far as our strategy is concerned towards the vitrified and the glazed vitrified segment. We have done fairly well in terms of the Y-o-Y numbers although sequentially it has been flat for this quarter.

Sumaira: Profitability too this time you have gone past that Rs 10 crore mark but coming back to your margins for a bit because if you compare it to many of your peers, it is still a tad bit lower, can you give us a sense of how much headroom do you now have to move up from this 6 percent level? A: I think it will not be fair to compare us with either the best in class or the rest of the competitors because everybody has a separate business model and a strategy. I have been maintaining this with all my investor presentations and even now is that we would be maintaining a 0.5-0.6 percent Y-o-Y growth on profit before tax (PBT) margins. Again EBITDA is not the way to look at our company because we have a large amount of joint ventures and outsource manufacturing compared to some of our peers.

Therefore PBT is the best way to look at it. On the PBT itself, you are correct, we are lower by quite a lot and we are looking at maintaining a 0.5-0.6 percent growth. In this quarter itself, we have grown sequentially and substantially over the last year’s average. Nigel: Your topline has grown by close to around 31-32 percent, break that up for us in terms of volumes as well as price hikes if any? A: There hasn’t been any price hikes. The price has come from the value addition mix and I think we have grown for about 19.6-19.7 percent by volume and the balance 8-9 percent has come by value and we are looking at growing at similar rates.

Obviously this particular quarter was an aberration as last year same quarter there was an issue with the supply at Morbi if you remember so therefore what is to be seen is the other averages and not look at Q3 average but having said that we are very bullish, extremely confident about 20 percent growth and even next year we are looking at 20 percent growth positive including increasing on our PBT. Sumaira: Why wouldn’t you want to hike that guidance a little bit higher after this strong showing? A: The strong showing is an aberration like I said between last quarter Q3 FY14 and Q3 FY15. Q3 FY14 was depressed because of supply issues therefore that would not be a comparison and at a larger base, we are looking at more than 20 percent growth going forward which we are very confident of.