ICICI Direct is bullish on Somany Ceramics has recommended buy rating on the stock with a target price of Rs 475 in its research report dated May 23, 2019.
ICICI Direct's research report on Somany Ceramics
Somany Ceramics (Somany) reported 3.3% volume de-growth YoY (grew 20.3% QoQ) to 15.4 MSM in Q4FY19. Topline de-grew 4.1% YoY to Rs 518.8 crore on account of a higher base. EBITDA margins expanded 210 bps YoY to 13.6% in Q4FY19. PAT de-grew 16.9% YoY to Rs 24.1 crore on account of exceptional item worth Rs 12.7 crore (on account of Rs 15.9 crore defalcation committed by an employee). Adjusted PAT grew 26.9% YoY to Rs 36.8 crore.
Somany has become structurally strong with credit control measures taken in FY19. Additional value-added capacities & stress in Morbi cluster could not only lead Somany to clock double-digit growth in FY20E but could also lead to PAT growth of 40.8% CAGR to Rs 91.9 crore in FY19-21E. We maintain BUY recommendation on the stock with a target price of Rs 475/share.
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