ICICI Direct has given Buy recommendation for Somany Ceramics with a target price of Rs. 1000 in its research report issued on Feb 04, 2021
ICICI Direct’s research report on Somany Ceramics
Somany Ceramics (SCL) is the second largest tiles manufacturer in the domestic tiles market having ~63 MSM capacity and sanitaryware and faucets capacity of 1.15 mn pieces and 0.65 mn pieces, respectively. SCL’s new capacity of 10 MSM (potential to generate ~Rs 250-300 crore worth of additional revenue at full capacity and incremental margin of 100- 150 bps) will come by Q4 end/Q1FY23
With strong underlying demand and likely improvement in margins when gas price cools off, we upgrade from HOLD to BUY We value Somany at Rs 1000/share at 26x FY24 P/E..