ICICI Direct is bullish on Somany Ceramics has recommended buy rating on the stock with a target price of Rs 375 in its research report dated November 26, 2018.
ICICI Direct's research report on Somany Ceramics
We met the management of Somany Ceramics. The key takeaways are: -i) the company is planning to increase its share of value added products in its product portfolio with commissioning of new 3.5 million sq mt (MSM) GVT capacity in Andhra Pradesh (expected to be commissioned in February, 2019), ii) gas prices could increase further in Q3FY19E from Q2FY19 level of Rs 40/SCM and start declining from Q4FY19E with the recent sharp fall in crude price, iv) to double faucet manufacturing facility by Q4FY19E and ramp up bathware revenues from Rs 200 crore in FY19E to Rs 350 crore in FY21E.
Hence, we upgrade the stock to BUY recommendation, with a target price of Rs 375/share (18x FY20E EPS).
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