ICICI Direct's research report on Somany Ceramics
Somany Ceramics (SCL) is the second largest tiles manufacturer in the domestic tiles market having ~63 MSM capacity and sanitaryware and faucets capacity of 1.15 mn pieces and 0.65 mn pieces, respectively. SCL’s new capacity of 10 MSM (potential to generate ~Rs 250-300 crore worth of additional revenue at full capacity and incremental margin of 100- 150 bps) will come by Q4 end/Q1FY23
Outlook
With strong underlying demand and likely improvement in margins when gas price cools off, we upgrade from HOLD to BUY We value Somany at Rs 1000/share at 26x FY24 P/E..
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