Buy Somany Ceramics, target price Rs 900: Angel Broking

Angel Broking has buy call on Somany Ceramics with a target price of Rs 900. The current market price of Somany Ceramics is Rs 766.6.

Time period given by analyst is one year when Somany Ceramics Ltd. price can reach defined target.

Somany Ceramics Ltd., incorporated in the year 1968, is a Small Cap company (having a market cap of Rs 3250.29 Crore) operating in Building Materials sector.

Somany Ceramics Ltd. key Products/Revenue Segments include Ceramic Floor & Wall Tiles, Other Operating Revenue and Scrap for the year ending 31-Mar-2021.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 335.53 Crore, down -40.95 % from last quarter Total Income of Rs 568.20 Crore and up 95.86 % from last year same quarter Total Income of Rs 171.31 Crore. Company reported net profit after tax of Rs 3.48 Crore in latest quarter.

Investment Rationale
Somany Ceramics Ltd (SCL) is a manufacturer and trader of complete decor solutions and its extensive range of products include Ceramic Wall and Floor Tiles, Polished Vitrified Tiles etc. Shift from unorganized (currently - 60%) to organized (currently -40%) tiles markets will benefit branded players like SCL. Further, Exports anti-dumping duty levied by the US on Chinese players as well as other countries, has been absorbing the Morbi based unorganised volumes, thus improving the demand and pricing scenario for organized players like SCL. Going ahead, the brokerage expects SCL to report a healthy bottom-line due to strong brand and wide distribution network and improvement in operating margins.

Promoter/FII Holdings
Promoters held 51.5 per cent stake in the company as of June 30, 2020, while FIIs held 4 per cent, DIIs 16.7 per cent and public and others 28 per cent.