Somany Ceramics (531548) Q2 24/25 earnings summary

Executive summary

• Q2 and H1 were muted due to weak domestic demand, lower exports, and heavy rains, but product mix improvements and bathware growth helped offset pressures.

• Sales grew by 1.4% year-over-year to INR 662 crores in Q2'FY25, with volume growth of 2.6% and bathware sales outperforming tiles.

• Operating margin was maintained at 8.5% due to efficient cost management and a favorable product mix.

• Profit Before Tax (PBT) was INR 25 crores and Profit After Tax (PAT) was INR 17 crores for Q2'FY25.

• Optimism remains for improved domestic demand, especially from the real estate sector in the second half of the fiscal year.

Financial highlights

• Consolidated sales for Q2'FY25 were INR 662 crores, up from INR 653 crores in Q2'FY24.

• EBITDA margin for Q2'FY25 was 8.5%, down from 9.8% in Q2'FY24.

• PAT dropped 41.2% year-over-year to INR 17 crores.

• Capacity utilization dropped to 77% in Q2 from 81% in Q1 and 88% a year ago.

• Working capital days increased to 13 in H1 from 8 in March 2024.

Outlook and guidance

• H2 expected to deliver high single-digit to low double-digit growth, aiming for 5%-6.5% growth for the full year.

• EBITDA margin projected to improve by 1%-1.5% if growth targets are met, barring gas price shocks.

• October has started well, and Q3 and H2 are expected to be stronger due to post-festive season demand.

• Expectation of improved domestic demand driven by growth in the real estate sector.