1 SOMANYCERA share price target reports by brokerages below. See what is analyst's view on SOMANYCERA share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Somany has become operationally strong with credit control measures taken in FY19. Overall, while the business environment remains challenging amid liquidity squeeze in the economy, Somany is expected to perform relatively better than its peers. Thus, we expect PAT to grow at 23.7% CAGR to Rs 70.9 crore in FY19-21E. On the flip side, recent broker-related defaultlends us discomfort over the company’s profitability as it is the second instance after the company took provisions worth Rs 15.9 crore in FY19 on account of misappropriation of funds by an employee. Also, Somany has investment of Rs 29.9 crore in Srei Infrastructure Finance in form of NCDs, of which Rs 11.1 crore will mature on March 23, 2020. The financial performance of Srei Infra Finance is deteriorating, which remains a concern for Somany’sinvestment. Overall, we cut our target multiple and downgrade the stock to HOLD with a revised target price of Rs 250/share (15x FY21E EPS).
With the addition in value added capacities and stress in Morbi cluster, the management has guided for double digit volume and sales growth in FY20E. At CMP of INR 319, the stock is trading at 18XFY20E and 12XFY21E earnings. We maintain a BUY rating on the stock with a target price to INR 400 based on a target P/E of 15XFY21EPS. Risks: Sharp increase in power & fuel cost. Prolonged slowdown in the construction activity could adversely affect the tile demand.
Somany has become operationally strong with credit control measures taken in FY19. Nonetheless, the overall business environment remains challenging amid liquidity squeeze in the economy. Hence, we revise our earnings estimates downward. We now expect PAT to grow at 26.6% CAGR to | 74.3 crore in FY19-21E. We maintain BUY recommendation on the stock with a target price of | 370/share (21x FY21E EPS).
Somany has become structurally strong with credit control measures taken in FY19. Additional value-added capacities & stress in Morbi cluster could not only lead Somany to clock double-digit growth in FY20E but could also lead to PAT growth of 40.8% CAGR to | 91.9 crore in FY19-21E. We maintain BUY recommendation on the stock with a target price of Rs 475/share.
Persistent cost pressure and subdued realisation have been the major drags on SOMC’s performance for last one year. Looking ahead, we believe that improved product-mix, recent price hikes (in Ceramic & PVT and Sanitaryware segments) and steady reduction in gas prices are likely to aid its operating performance. Following sharp correction in stock price in last 12 months, current valuation at 15x of FY21 earnings appears to be attractive. Marginally reducing our target multiple to 18x (from 20x earlier) due to contraction in return ratio, we maintain our BUY recommendation on the stock with a revised Target Price of Rs380 (18x FY21 EPS).
Currently, Somany is trading at 15.5x FY20E EPS, at ~40% discount to Kajaria. In our view, this current valuation discount has widened (15-20% historically) on account of Somany underperformance following operational disruptions & credit control measures. Going ahead, Somany’s financial performance is set to improve with steady improvement in demand and sharp recovery in EBITDA margins. Also, the anticipated improvement in financial performance should narrow down valuation gap between Somany & Kajaria, going ahead. Hence, we maintain our BUY rating, with a target price of Rs 410/share (20x FY20E EPS).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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