Archive · 2 Jul 2025
Somany Ceramics Downgraded to Add, Targets ₹550 Following Recent Rally
Somany Ceramics' management shared their expectations and outlook.
They anticipate solid growth in the next fiscal year, aiming for increased profit margins.
The company has no current plans for expanding its tile production.
However, competition from low-priced tiles from Morbi is affecting the company's performance.
While real estate sales are providing some boost, the pricing from Morbi is offsetting much of the growth.
The stock rating changed due to recent price increases, with a target price of ₹550.
Somany Ceramics management anticipates high-single to low-double-digit volume growth in FY26.
The company aims to improve EBITDA margins by 100-150bps y-o-y in FY26.
No tile segment expansion plans are scheduled for the coming quarters.
Morbi tile manufacturers' low-priced products are hindering the industry's volume growth.
The stock was downgraded to 'Add' from 'Buy' due to recent rally, with a target price of ₹550.
- Who
- Somany Ceramics' management and industry analysts.
- What
- Somany Ceramics' management shared its expectations and outlook.
- When
- Published on July 2, 2025, and with an outlook for FY26.
- Where
- The article discusses the Indian tile market and the company's operations.
- Why
- To inform investors about the company's performance and future prospects.
Company Performance
Industry Competition
Growth Prospects vs. Challenges
Company Performance
Company anticipates volume growth and EBITDA margin improvement.
Industry Competition
The persistent issue of Morbi dumping is expected to continue hindering volume growth and margins of tile majors.
- Target Price
- ₹550
- Current Market Price (CMP)
- ₹566.10
- Rating
- Add
- Volume Growth (FY26)
- High-single to low-double-digit
- EBITDA Margin Improvement (FY26)
- 100-150bps y-o-y
- Max plant capacity
- 4.5MSM