- 19 May 2022
- ICICIdirect Research
Weak performance; Higher gas prices drag margins lower
SOMANYCERA - 720 Change: 2.60 (0.36 %)News: Somany reported a weak performance with tiles volumes decline and sharp margin contraction with higher gas and other input prices. The topline was up 9.4% YoY at Rs. 616.8 crore. Tiles Revenues were up 9.1% YoY at Rs. 535.8 crore with volumes down 4.5% YoY and realisations up 14% YoY, given the price hikes taken in last few quarters. EBITDA was at Rs. 50.6 crore, down ~43% YoY owing to higher input and gas prices leading to decline of 605 bps in gross margins at 29.8%. The resultant margins were at 8.2%, down 756 bps YoY. PAT was at Rs. 17.2 crore, down ~43% YoY given the margin pressure
Views: We note that Somany’s performance was weaker and margin decline was steeper than Kajaria. The gas price rise will have steeper impact on Somany given the locational mix of production units. We await management commentary on outlook ahead
Impact: Negative