Somany Ceramics may touch Rs 462: Daljeet Singh Kohli

Daljeet Singh Kohli, Head-Research at India Nivesh Securites told CNBC-TV18, "The basic main reason for Somany Ceramics coming off from the highs is that for the last two quarters, that was quarter four and quarter one of this year, their topline was muted. Quarter two numbers were good, again on the topline it was muted but bottomline was fantastic. So what the markets got spooked was that the topline is not coming and all the building product companies, even Kajaria Ceramics also had the similar problems, but bottomline was increasing. And the result was that all these companies, they saw their price to earnings ratio (PE) multiple contracture.""Kajaria came down from 25 to 20 times, in Somany Ceramics’s case, it came from 22 to 16 times. That is the reason why we have taken this stock post the results, that we believe that this gap will narrow down and the company is on the right path, the growth will come in the over next few quarters. So you will see the topline coming in, bottomline already intact, so that means that the numbers will fantastic in the next one to two quarters and valuation wise it has become very comfortable; 16 times of FY17. So we have given a target of Rs 462, which is 23 times of FY17," he added.