Somany Ceramics Q2 Results Review - Subdued Volume Growth, Decline In NSR Dented Earnings: IDBI Capital

IDBI Capital Report

Somany Ceramics Ltd.’s Q2 FY25 result was in-line with our estimates on net sales and Ebitda front, while profit after tax was below forecast. below our estimates on key parameters. During the quarter, demand has been subdued due to lower Morbi exports, which has led to material oversupply in the domestic market.

Additionally, high rainfall during the quarter has further impacted demand conditions.

The management guided demand to improve in H2 FY25 and will support volume off-take. Net sales was marginally up by 1.7% YoY to Rs 6,663 million, while Ebitda came in at Rs 560 million, down by 12.7% YoY.

The company reported net profit of Rs 173 million, down by 41.3% YoY. Given weak H1 FY25, we have cut net earnings estimates for FY25E/FY26E. Maintain Hold with a target price of Rs 718 (earlier Rs 765), assigning 18 times PER on FY26E.

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