Ranvir’s Portfolio

Somany Ceramics –

Q4 and FY 24 concall and results highlights –

Q4 financial outcomes –

Revenues – 732 vs 675 cr, up 8 pc
EBITDA – 79 vs 61 cr, up 30 pc ( margins @ 11 vs 9 pc )
PAT – 34 vs 24 cr ( up 39 pc )

FY 24 financial outcomes –

Revenues – 2577 vs 2465 cr ( up 4.5 pc )
EBITDA – 253 vs 189 cr ( up 34 pc, margins @ 10 vs 8 pc )
PAT – 97 vs 71 cr ( up 35 pc )

Breakdown of sales –

Own manufacturing – Tiles – 815 vs 833 cr
JV – Tiles – 771 vs 804 cr
Outsourced – Tiles – 611 vs 510 cr
Bathware – 267 vs 244 cr
Others – 59 vs 33 cr

It was a very tough year for the building materials industry

Only positive during FY 24 was the correction in Natural gas prices ( a key RM ). It fell from Rs 59 / cubic mtr to Rs 40 / cubic mtr ( yearly avg price ). This has helped boost margins

Capacity utilisation in FY 24 @ 86 pc, down by 1 pc vs FY 23. Capacity utilisation at sanitary ware @ 70 pc and @ 100 pc for faucets

Amounts spent on brand building @ 2.5 pc of revenues for FY 24. Aim to spend 3 pc of sales in FY 25

Current installed capacity of tiles @ 78 million Sq Mtrs. FY 24 sales @ 68 million Sq Mtrs

Aim to grow revenues in mid single digits ( with low double digit volume growth ) in FY 25 ( conservative estimate ) with 100-150 bps improvement in EBITDA margins

Aim to increase growth rates in the Bathware segment in FY 25

Only maintenance / routine capex is planned for FY 25 @ 50-60 cr

Company expects good growth in FY 25
( specially in H2 ) due booming RE mkts in India

GVT tiles contribution @ 34 pc for FY 24. GVT tiles realisations are better than Ceramic and polished vitrified tiles. Aim to take this share to 40 pc of sales in 2-3 yrs

There was a substantial dip in the exports mkt in Q4 which led to increased competition from Morbi players in the domestic mkt. However, exports have picked up in Apr-May. Also, company believes that the worst of pricing pressures may now be behind them. They do expect to clock in 11 pc kind of EBITDA margins for full FY 25

Q1 has been sluggish due elections. Expect a strong pick up in sales in H2

Somany’s margins are inferior to Kajaria’s because of Kajaria’s better product mix and operating leverage vs Somany

Company’s sales mix @ 80 : 12 : 08 – Retail : Govt Projects : Private projects

Don’t see any significant capacity addition at Morbi for next 12-18 months

Company’s Govt projects segment has been doing well. Expect the same to continue

Company is not on a hurry to add capacities. Incase there is a sudden surge in demand in H2 and beyond, they can always outsource the capacities and ample spare capacities are available at Morbi

Disc : holding, biased, carefully looking out for pricing pressures, not SEBI registered