Moneycontrol
Last Updated : Jan 31, 2018 11:47 AM IST | Source: CNBC-TV18

Expect to see good margins next year: Somany Ceramics

Somany Ceramics posted a weak set of earnings in Q3 which makes it the third straight quarter of earnings disappointment. In an interview with CNBC-TV18, Abhishek Somany, MD of the company spoke about the results and his outlook for the company.

CNBC TV18 @moneycontrolcom

Somany Ceramics posted a weak set of earnings in Q3 which makes it the third straight quarter of earnings disappointment. In an interview with CNBC-TV18, Abhishek Somany, MD of the company spoke about the results and his outlook for the company.

The reason behind weak Q3 numbers was that post Q2 results, there was a hangover for Diwali and after Diwali, we had goods and services tax (GST) rate cut from 28 percent to 18 percent, so up till mid-November 2017, we had no sales, he explained.

Also, the company has an issue with the gas in the Haryana plant. All of India has reduced the taxation on gas but Haryana continues to be stubborn and is not reducing the rates, he added.

In Q3, tile segment grew by about 6 percent in volume, he said.

FY18 has been an aberration for the company. We have had issues with GST, SAP implementation and now the GST rate reduction, so going forward the margins would bounce back to what we had earlier, said Somany.

Sanitaryware business is doing well. Non-tile business contributes 10 percent to the revenue in Q3 and is growing fairly substantially, he further mentioned.

The company has added around 66 new dealers and 20 new showrooms in Q3.

Margins next year are looking good, he said.

GST implementation has not been as smooth as we thought, Somany said.

For full interview, watch accompanying video...
First Published on Jan 31, 2018 11:41 am
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