Somany Ceramics stock rating upgraded to Buy by ICICI Securities on growth outlook

Published 18/08/2025, 11:06
Somany Ceramics stock rating upgraded to Buy by ICICI Securities on growth outlook

Investing.com - ICICI Securities has upgraded Somany Ceramics Limited (NSE:SOMC) from Add to Buy with a price target of INR604.00, following recent stock price correction.

The upgrade comes after Somany Ceramics reported Q1FY26 consolidated revenue growth of 4.5% year-over-year, with tile volume increasing 3% year-over-year, representing a 6-year compound annual growth rate of 5.1%. Tile realization remained largely flat compared to the previous year, though it increased 1.2% quarter-over-quarter.

The company’s consolidated operating profit margin fell 49 basis points year-over-year to 8%, as gross margin including power and fuel costs declined 177 basis points year-over-year, resulting in an EBITDA decline of 1.6% compared to the same period last year.

Management indicated that while demand conditions were subdued in Q1FY26, they observed an uptick in July 2025. The company has provided guidance for high single-digit volume growth in FY26, with operating profit margin expected to expand 100-150 basis points over FY25, supported by operating leverage and improved capacity utilization.

ICICI Securities has reduced its FY26-27E EBITDA estimates by approximately 4.2-3.7%, but maintained its June 2026 target price of INR604 while upgrading the stock recommendation.

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