Somany Ceramics fits well

Somany Ceramics is the top gainer on the BSE currently; the stock opened 13% higher at Rs.700.15 and rose to an intraday high at Rs.728, up 17%. Its 52-week high is at Rs.818.

The stock price has reacted positively to the encouraging Q4FY24 performance of the company. It reported a 8% (YoY) rise in  consolidated sales ay Rs.732 crore on which its PAT came in at Rs.34 crore, up 39%.

EBITDA for the quarter was at Rs.79 crore, up 30% while margins rose from 9% to 10.9%.

The company attributed these earnings to stable input costs coupled with the continuous efforts on cost optimisation. Further, the operating performance of joint ventures improved too and it expects them to give better results going forward.

It has a tiles making capacity of 80 msm p.a. (including dedicated outsource tie ups) and capacity utilisation for Q4 was at 89%. Sanitaryware capacity stands at 0.78 mn pcs p.a. (excluding outsource tie ups) and capacity utilisation was at 39%. Bath fittings capacity stood at 1.30 mn pcs p.a. (excluding outsource tie ups) and capacity utilisation was 99% in faucets.

The company is optimistic about the future, anticipating a positive shift in the domestic demand landscape in the upcoming years, particularly from the second half of the current fiscal. This optimism is underpinned by several factors such as (i) rebound in domestic demand, driven by the lag effect of new construction projects, where tiles are typically applied during the finishing stages; (ii) expected growth acceleration in the real estate sector, which is poised to contribute significantly to the domestic market environment; (iii) continued momentum in exports, which are expected to provide further support to the Indian tile industry.