Anyone looked at Somany Ceramics

Hi Ranvir, I’ve started looking Somany only a couple of hours back and I find it promising. I heard the concall as well, and have a couple of questions which I am hoping you can asnwer.

1. Does the capacity increase by about 25% include the Nepal capex thhat will come live later in the year, or is that separate? They were at 82% tile capacity in Q3, and so if the total capacity increase is just 25-30%, the peak quarterly sales can go up by about 50% at best, unless prices of the tiles rise meaningfully. And if they announce the next capex say this time next year, it will take them probably another year or so to get it on stream. And so they’re not expecting peak sales of higher than 800cr from the times business over the next two years. Is this too conservative, given the uptick in real estate cycle and many projects getting to completion this year onwards?

2. In the Q2 call it was mentioned that 75% of their sales are retail sales. Does this mean individuals who are getting their homes constructed / renovated? Or does this include sales to say a DLF or a Lodha for their projects? The uptick that we’re seeing at the moment seems to be in apartment sales through branded developers. Is the same happening in standalone buildings as well in your opinion? How does the cycle typically flow? And shouldn’t the 75% retail number change going forward?

3. While they haven’t shared the details, my sense is that there can be a decent margin uptick once the new capacities are on stream. But what proportion of the const structure is natural gas? That’s a variable that could impact margins in either direction, irrespective of demand of products

Thanks!
Not invested yet, but interested