Will recover to pre-Covid levels only in FY22, says Somany Group

With the Covid-19 pandemic continuing to spread in India, Kolkata-based Somany Group is expecting full recovery in business to pre-Covid levels — but not before the next financial year. The group is banking on the momentum, so far, witnessed in the non-metro markets.

According to Sandip Somany, director at the group’s holding entity Somany Impresa, after the stringent nationwide lockdowns that crippled businesses, continuing localised lockdowns are now the biggest barrier in the road to recovery. Moreover, a faltering hotel industry and uncertainty in the overall job market have further impacted businesses.

The green shoots, however, are found in the smaller towns. “In the retail segment, the large metropolitan towns are weak, but the semi-urban areas are doing well — resulting in year-on-year growth. Further, interest rates have been coming down quite sharply, and as a consequence, equated monthly instalments (for housing) have come down quite significantly,” says Somany.

Serious players — both buyers and sellers — and not speculators are now driving the business.

The Rs 3,500-crore group is expected to take a hit of 15 per cent on its last year top line number. Two of the largest group entities — Hindustan Sanitaryware & Industries (HSIL) and Somany Home Innovation (SHIL) — raked in Rs 1,859 crore and Rs 1,613 crore, respectively. Its 10 manufacturing plants are already back to 80 per cent of pre-Covid levels. But a full recovery may not happen this year.

While for SHIL, 98 per cent of business comes directly from consumers, for HSIL, 30 per cent of the business is dependent on large institutional buyers like builders, hospitals, hotels, among others.

To stay prepared for normal demand levels, the group is chalking out investment plans in expanding capacity and plans to finalise them at its next board meeting. “To continue the high growth rate, we will need to invest more in expanding plant capacity,” says Somany.