Q3FY21 Result Update - Somany Ceramics - ICICI Direct

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.

Valuation & Outlook

Somany's working capital management and net debt reduction (down from ~Rs. 444 crore in FY20 to Rs. 255 crore as on Q3FY21) has been the key positive. Given the robust demand traction, improved margins trajectory and balance sheet repair initiatives, we raise our target multiple to 17x now (vs. 14x) as we roll forward to FY23E. We maintain BUY with a revised target price of Rs. 500/share at 17x FY23E P/E (Rs. 290/share, earlier).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Somany_Q3FY21.pdf

Shares of SOMANY CERAMICS LTD. was last trading in BSE at Rs.386.05 as compared to the previous close of Rs. 383.9. The total number of shares traded during the day was 3108 in over 223 trades.

The stock hit an intraday high of Rs. 392 and intraday low of 381.8. The net turnover during the day was Rs. 1203489.

Source : Equity Bulls

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