ICICI Direct has given Hold recommendation for Somany Ceramics with a target price of Rs. 750 in its research report issued on Aug 08, 2021

ICICI Direct’s research report on Somany Ceramics

Somany Ceramics is the second largest tiles manufacturers in the domestic tiles market having ~63 MSM capacity (own and JV) and sanitaryware & faucets capacity of 1.15 million (mn) pieces and 0.65 mn pieces, respectively. Somany has announced a large capex of Rs 160-170 crore (seeing strong demand and higher utilisation) in FY22, which will increase its overall capacity by 10 MSM and generate ~Rs 250-300 crore worth of additional revenue (at full capacity) and incremental margin of 200 bps


We downgrade from BUY to HOLD after the sharp price run up (up 84% in six months) as we believe the growth outlook is largely priced in We value Somany at Rs 750/share.


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