Somany Ceramics (531548) Q4 09/10 earnings summary

Executive summary

• FY2010 net sales rose 21.46% to Rs. 536.94 crore; EBITDA increased 33.95% to Rs. 58.32 crore and PAT rose 134.10% to Rs. 20.46 crore.

• Retail-focused mix, higher value-added product sales and cost efficiencies supported stronger profitability despite a hesitant start to the year for the tile industry.

• Market share rose from 4% in 2006-07 to 6% in 2009-10; production capacity was 16.70 mn sqm at year-end.

Financial highlights

• Gross sales increased 21.66% to Rs. 563.02 crore; net sales, after excise, grew 21.46% to Rs. 536.94 crore.

• EBITDA reached Rs. 58.32 crore, up 33.95%; PBT rose 126.87% to Rs. 30.56 crore and PAT rose 134.10% to Rs. 20.46 crore.

• Basic and diluted EPS were Rs. 29.65, versus Rs. 12.67 in FY2009; proposed dividend increased to Rs. 3 per share from Rs. 1.50.

• Operating cash flow was Rs. 48.22 crore; cash profit grew 44.77% to Rs. 32.95 crore.

Outlook and guidance

• Targeting revenue of Rs. 1,000 crore within 2.5 years at existing or better margins.

• FY2011 plan targets 16% higher production; the 2.45 mn sqm Kassar expansion was expected to start trial runs in June 2010.

• A 2.80 MW gas-based captive power unit with waste-heat recovery was expected to lower energy costs and improve productivity and profitability.

• Planned 6-7 mn sqm annual greenfield capacity near Kadi within two years; Kassar and Kadi expansions were cited as having cumulative revenue potential of Rs. 325 crore.

• VC Shield sales target: Rs. 100 crore in the near future, up from Rs. 55 crore in FY2010; exclusive showrooms planned to exceed 100 over two years.