Somany Ceramics shoots up 20% on strong jump in profits; brokerage upbeat

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Shares of Somany Ceramics shot up by 19.9 per cent at Rs 745.65 on the BSE in Thursday's intraday trade. The stock price of the company soared after it staged a strong show in its quarterly earnings for the January-March quarter of the fiscal year 2023-24 (Q4FY24).

In Q4FY24, Somany Ceramics witnessed a 38.85 per cent surge in consolidated net profit, reaching Rs 33.88 crore compared to Rs 24.40 crore in Q4FY23. Revenue from operations during the quarter saw an 8.34 per cent year-on-year increase, at Rs 731.81 crore.

Moreover, the company's earnings before interest tax depreciation and amortisation (Ebitda) stood at Rs 79 crore for the quarter ending March 31, 2024, marking a notable 30.4 per cent increase from Rs 61 crore recorded in the same quarter of the previous fiscal year. The Ebitda margin expanded to 10.9 per cent in Q4FY24, from 9 per cent in the corresponding quarter last year.

On an annual basis, Somany Ceramics reported a consolidated net profit increase of 33.63 per cent, reaching Rs 96.88 crore in FY24. While FY24 revenues from operations saw a 4.57 per cent rise, which amounted to Rs 2,577.32 crore compared to FY23.

Analysts at JM Financials said that the company’s Q4 earnings was broadly in line with their estimates while lower than expected other expenses led to 5 per cent beat on Ebitda front.

Demand for tiles remained sluggish through 4Q and further impacted in 1QFY25 on seasonality. Blended gas cost was down 6 per cent YoY while lower other expenses and employee cost led to Ebita margin expansion of 180 bps YoY in Q4FY23. 

“Somany remain hopeful of recovery from 2QFY25 and guides for low double digit volume growth in FY25 with 100-150 bps improvement in operating margins, assuming stable gas prices. We broadly maintain our FY25 -26EPS estimates to arrive at Mar '25 TP of INR 950, basis 22xMar’26EPS. Maintain BUY on attractive valuations (14.4xFY26EPS),” analysts at JM Financials wrote in a report. 

At 13:28 PM; the stock of the company was trading 17.19 per cent higher at Rs 728.20 per share. By comparison, the S&P BSE Sensex fell 0.49  per cent. The company is presently trading at a price to earnings multiple of 30.66 times.