ICICI Direct has given Buy recommendation for Somany Ceramics with a target price of Rs. 500 in its research report issued on Feb 06, 2021
ICICI Direct’s research report on Somany Ceramics
Somany Ceramics reported strong Q3FY21 numbers with sales volumes growth recovery faster than anticipated. Tiles sales volumes were up 11.8% YoY at 14.9 MSM with stable realisations (up 0.8% YoY at Rs 288/SCM). Tiles revenues were up 12.6% YoY at Rs 428.6 crore while bathware revenues were up 8.4% YoY at Rs 50.9 crore. Overall revenues were up 12.9% YoY at Rs 492 crore. EBITDA at Rs 63.3 crore was up 10.4% YoY, driven by better product mix driving gross margins. Margins at 12.9% were up 363 bps YoY. PAT was at Rs 28.2 crore, up 1.7x YoY, with growth aided by superior operating performance and lower interest costs.
Outlook
We maintain BUY with a revised target price of Rs 500/share at 17x FY23E P/E (Rs 290/share, earlier).
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