External broker reports(aggregated public sources), HDFC Securities

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External broker reports(aggregated public sources)

Equity Bottom-Up

<p>We expect the tightened working capital and healthy operating profits to keep the balance sheet in check during FY22-24E, despite a higher expected Capex outgo. We initiate coverage on Somany Ceramics (SOMC) with a BUY rating and target price of INR 940/share (13x Jun23E consolidated EBITDA). SOMC is Indias second-largest tiles player. We like it for its increased focus on retail sales through a robust distribution and showroom network across India and expanding share of premium tiles sales. We believe these would help its consolidated revenue to grow at a 16% CAGR, supported by capacity expansion and faster growth in the bathware segment.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We expect the tightened working capital and healthy operating profits to keep the balance sheet in check during FY22-24E, despite a higher expected Capex outgo. We initiate coverage on Somany Ceramics (SOMC) with a BUY rating and target price of INR 940/share (13x Jun23E consolidated EBITDA). SOMC is Indias second-largest tiles player. We like it for its increased focus on retail sales through a robust distribution and showroom network across India and expanding share of premium tiles sales. We believe these would help its consolidated revenue to grow at a 16% CAGR, supported by capacity expansion and faster growth in the bathware segment.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Somany Ceramics (Initiating Coverage): Geared for growth. BUY