Buy Somany Ceramics; target of Rs 916: ICICI Securities

ICICI Securities is bullish on Somany Ceramics has recommended buy rating on the stock with a target price of Rs 916 in its research report dated May 16, 2024.

Broker Research

May 29, 2024 / 12:05 IST

Buy

ICICI Securities's research report on Somany Ceramics

In Q4FY24, Somany Ceramics (SOMC) reported consolidated revenue growth of 8.6% YoY driven by tile volume growth of 7.3% YoY (+19.9% QoQ; 3-year CAGR of 3.8%), but tile realisation declined 2.3% YoY (-1.2% QoQ). Consol. OPM increased 180bps YoY (+113bps QoQ) to 10.8%, primarily due to lower RM costs (down 128bps YoY, including power and fuel cost), resulting in EBITDA/PBT growth of 30.3%/41.4% YoY, respectively. Management stated demand conditions were subdued in Q4FY24 and remain so in Q1FY25-TD, and expects it to pick up H2FY25 onwards as many real estate projects will complete by then. For FY25, it has guided for low double-digit tile volume growth with OPM increase of 100-150bps YoY (aided by benign gas prices and operating leverage).

Outlook

We broadly maintain estimates and BUY rating with an unchanged Mar’25E TP of INR 916.

For all recommendations report, click here