By Aditya Raghunath
Investing.com -- ICICI Securities Ltd (NS: ICCI ) has been tracking ceramic wall and floor tile manufacturer Somany Ceramics Ltd (NS: SOCE ) for quite some time now. The brokerage firm has consistently raised its target price on the company since September 2020 and Somany Ceramics has always hit the target.
ICICI Securities had given targets of Rs 290, Rs 304 and Rs 380 for Somany Ceramics and the tile company has crossed all of them. Its latest report gives Somany Ceramics a target of Rs 500, an upside of over 20% from its current trading price of Rs 414.
The brokerage firm has said, “Somany Ceramics' working capital management and net debt reduction (down from about Rs 444 crore in FY20 to Rs 255 crore as on Q3FY21) has been the key positive. Given the robust demand traction, improved margins trajectory and balance sheet repair initiatives, we raise our target multiple to 17x now (vs. 14x) as we roll forward to FY23E.”
The firm’s report on Somany Ceramics adds that “Tiles revenues were up 12.6% YoY at Rs 428.6 crore while bathware revenues were up 8.4% YoY at Rs 50.9 crore. Overall revenues were up 12.9% YoY at Rs 492 crore.”
With sales volumes recovering faster than expected, the stock is a good buy according to ICICI Securities. BOB Capital Markets has also given the stock a target of Rs 490.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.