Somany Ceramics Q2 Results Review - Soft Demand, Higher Gas Prices Impact Margins: ICICI Direct
The company witnessed a muted Q2 performance owing to benign product demand, and supply chain and logistical disruptions.
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ICICI Direct Report
Somany Ceramics Ltd. witnessed a muted performance in Q2 FY23 reporting 2% YoY decline in tiles volume (to 15.89 standard cubic metre) owing to benign product demand, and supply chain and logistical disruptions (especially in Morbi based plants due to shutdown and unavailability of truckers at desired level).
However, sales (in value terms) have improved 9.3% YoY with better realisations and portfolio mix. Further, capacity utilisation remained elevated at ~88% for tiles segment during Q2 FY23.
Overall tiles production was at 13.3 million square metre (own plant: 8.1 msm, joint venturess: 5.2 msm).
Going forward, the management has indicated towards continuance of subdued product demand in October 2022 due to festive season.
However, Somany Ceramics expects healthy rise in demand from November 2022 and has guided for ~15-20% YoY revenues growth in FY23.
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