Somany Ceramics Q1 concall summary –
Q1 volume growth at 8 pc. Capacity utilisation- lowest (except COVID days) due lower demand, higher inventory and maint shutdowns
Capacity utilisation now increasing. This plus cost controls,lower gas prices should lead to margin expansion
Current capacities –
Tiles-75 million sq mtrs ( including JVs and outsourcing tie ups )
Sanitaryware-7.8 lakh pcs
Bath fittings-13 lakh pcs
Capacity utilisation in Q1 –
Tiles-70 pc
Sanitaryware-58 pc
Faucets-70 pc
Tiles sales mix-
Own Mfg- 37pc
JVs-35pc
Outsourcing-29pc
Financial outcomes( consolidated ) –
Sales- 584 vs 555 cr
EBITDA- 51 vs 45 cr ( margin at 8.7 vs 8.1 pc )
PAT- 15 vs 21 cr ( due exceptional item of 7 cr )
Total Tiles sold- 15.41 vs 14.25 msm
Bathware sale contribution – 58 vs 54 cr
Net debt down from 308 to 190 cr, qoq !!!
Capacity utilisation now at 100 pc. Things r looking much much better now
Gas prices have come off wef Q1. Now with increased capacity utilisation, EBITDA margins should improve signifigantly
Sanitaryware has also picked up momentum in Q2
Added 50 dealers, 25 showrooms in Q1
Demand in Q2 has been much better. Should pick up further in Q3
Gas prices have further corrected from Q1 levels, down another 7-8 pc
Large format tiles to start production in Q3. No major fresh capex planned in next 2 yrs
Company’s new capacity will come up in Nepal next yr
Share of GVT (value added) tiles now at 35 pc vs 32 pc in Q4
North India is Somany’s biggest mkt. Have seen better sales in July despite heavy rains
Q1 is generally weak as labour goes back home in June due heat
75 pc of company’s sales come from retail segment
Rest is a combination of – Govt business, Private builders and corporates buying directly
Aim to end the FY with 10-10.5 pc EBITDA margins (in Q1, margins were 8.7 pc)
Looking to clock > 300 cr revenues from bath ware business this yr and > 500 cr in next 3 yrs
It has 3-4 pc higher margins than tiles business
Disc: hold a tracking position, looking to add more as the future looks bright
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