Somany Ceramics maintained their guidance of mid to high-single digit growth and expect margins to improve with better utilizations. Brand spends will continue to be ~2.5% of sales.
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Subdued demand scenario keeps Somany Ceramics Ltd. performance under pressure. Company’s tiles revenue grew marginally by 3.5%YoY to Rs 5.46 billion wherein volumes increased by 4.5%YoY and realisations remained flattish over similar period. However, volume and revenue numbers were marginally better than our estimates.
Operating margins for the quarter stood at 8.3% versus estimate of 8.4% and as compared to 9.6%/8.4% margins in Q3 FY24/Q2 FY25 respectively. Lower volume off-take and reduction in average selling price weighed on operating margins.
Net profit de-grew sharply largely due to higher tax rates which as %PBT came in at 39% versus 31%/30% in Q3 FY24/Q2 FY25 respectively. Bathware biz revenue increased by 9%YoY to Rs 710 million.
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. Read more on Research Reports by NDTV Profit.Given the lucrative multiples, Yes Securities maintains its Buy rating on the stock, with a revised target price of Rs 728 by valuing the company at P/E(x) if 20x on FY27E EPS. Read MoreResearch Reports
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