ICICI Securities's research report on Somany Ceramics
Somany Ceramics (SOMC) reported Q1FY26 consol. revenue growth of 4.5% YoY with tile volume rising 3% YoY (6-year CAGR of 5.1%) while tile realisation was largely flat YoY (+1.2% QoQ). Consol. OPM fell 49bps YoY (-15bps QoQ) to 8%, as gross margin (including power and fuel cost) fell 177bps YoY, resulting in an EBITDA decline of 1.6% YoY. Management stated demand conditions were subdued in Q1FY26, but it has seen some uptick in Jul’25. It guides for high single-digit volume growth in FY26 with OPM expanding 100–150bps over FY25 OPM (aided by operating leverage and better capacity utilisation). We cut FY26–27E EBIDTA by ~4.2–3.7%. We upgrade the stock from Add to BUY, post the recent stock price correction with a rolled-over unchanged Jun’26E TP of INR 604.
Outlook
We upgrade SOMC from Add to BUY, post the recent stock price correction, with a rolled-over unchanged Jun’26E target price of INR 604, set at an unchanged 20x PER one-year forward.
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