Somany Ceramics Ltd

Financial Performance

• Sales growth ~3% in Q1 FY27; value growth ~24%.
• EBITDA margin 11.6% in Q1 FY27, up 3.6 pp.
• Standalone capacity utilization 83% vs 72% prior year; JV losses narrowed to INR 3 cr profit from INR 10 cr loss.
• Gas price volatility; blended natural gas cost ~INR 68; South ~mid-70s; North ~INR 68–69.
• Exports down ~50–60% from peak due to geopolitics; expect recovery as Morbi normalizes.
• Volumes in sanitaryware/bath fittings/building materials expanding; Morbi expansion ongoing.

Operating Update

• Channel inventory lean in March; May–June demand pickup; inventory normalized.
• Receivables and stock in line; working-capital days down from 17 to 12.
• 9+ million sq m South plant will be up-and-running in 12–15 months; potential revenue ~INR 350 cr.
• Additional capacity 4–5 million sq m planned in Bahadurgarh, Gujarat, Morbi, South; ready by Q3, fully by Q4; adds value-added mix.
• JVs show improving performance; balancing equipment to boost value-add.

Projects and Capex

• South plant capex ~INR 220 cr; next year; ~60–70% funded by internal accruals.
• Total capex to end FY27 ~INR 275 cr; includes balancing equipment; ~65–70% funded internally.
• No net capacity increase this year; incremental capacity from balancing equipment (3–4 million sq m).
• Balancing equipment work to conclude by end of Q3; margin uplift expected in Q4.

Outlook and Guidance

• FY27 EBITDA margin guidance: 100–150 bps higher than FY26.
• Volume growth guidance: single-digit; margins to be maintained or bettered.
• Target EBITDA margin of 12% or more (and higher if conditions permit).
• Closing remark: positive on the year; expect improvements in volume and margin.

Q&A Highlights

• Margin uplift driven by higher capacity utilization and JV-loss reduction; pricing pass-through only.
• Gas-cost pass-through continues; Morbi premium narrowed; domestic pricing could ease if gas costs fall.
• Guidance: FY27 single-digit volume growth; potential for 12%+ EBITDA margin; mid-cycle volumes forecast.
• Exports remain weak; expect pent-up demand when Morbi export scenario stabilizes.
• Somany Max: last year ~INR 7 cr loss; this quarter ~INR 1.x cr loss; target to keep loss under INR 10 cr.

AGM Details

• AGM date and mode: 12 August 2026, 10:00 AM, via video conferencing.
• Record date for voting: 5 August 2026.

Resolutions & outcomes

• Adopt standalone and consolidated financial statements; passed with 99.9996% in favour.
• Reappoint Ghanshyam Trivedi (retiring by rotation); approved with 86.71% in favour.
• Approve material related party transactions with Sudha Somany Ceramics Private Limited; passed.

Dividend

• Final dividend of Rs 2 per equity share approved.

Director changes

• Ghanshyam Girdharbhai Trivedi reappointed (retiring by rotation).

AGM Details

• AGM held on 12 August 2026 at 10:00 A.M. via VC/OAVM.
• Record date for voting: 5 August 2026.
• Shareholders on record date: 32,443.
• Attendance via VC: Promoters 6, Public 79.

Resolutions

• Agenda 1 (Ordinary): Adopt standalone and consolidated financial statements for FY2026.
• Agenda 2 (Ordinary): Declare final dividend of Rs 2 per equity share.
• Agenda 3 (Ordinary): Re-appoint Ghanshyam Girdharbhai Trivedi by rotation.
• Agenda 4 (Ordinary): Approve related party transactions with Sudha Somany Ceramics Private Limited.

Voting results

• Agenda 1 passed with 99.9996% in favour; 0.0004% against.
• Agenda 2 passed with 100.000% in favour.
• Agenda 3 passed with 86.7107% in favour; 13.2893% against.
• Agenda 4 passed with 99.9296% in favour; 0.0704% against.

Dividend

• Final dividend of Rs 2 per equity share approved.

Directors

• Director Ghanshyam Girdharbhai Trivedi re-appointed.

Auditors

• No changes to statutory/secretarial/cost auditors disclosed.

Related party transactions

• Approval of related party transactions with Sudha Somany Ceramics Private Limited.

Other material approvals

• No other material approvals reported.

Meeting Details

• Earnings conference call held on 12 August 2026 for Q1 FY26-27 results.
• Audio recording of the call is accessible.
• Recording available via the provided link and on Somany's website.
• Organised by Somany Ceramics Limited.

Participants

• Key participant: Company Secretary & Compliance Officer.

Purpose

• Purpose: share access to earnings call recording for Q1 FY26-27.

AGM Details

• AGM held on 12 August 2026 at 10:00 AM via VC/OAVM; concluded 10:49 AM.
• Chairman: Shreekant Somany; quorum met and proceedings conducted as per Articles.

Key Resolutions

• Resolution 1: Ordinary – adopt standalone and consolidated financial statements for FY ended 31 Mar 2026.
• Resolution 2: Ordinary – declare final dividend of Rs 2 per equity share.
• Resolution 3: Ordinary – re-appoint director retiring by rotation (Ghanshyam G. Trivedi).
• Resolution 4: Ordinary/Special – approve material related party transactions with Sudha Somany Ceramics Private Limited.

Voting & Outcomes

• Voting results not disclosed in the provided text.
• Scrutinizer’s report to be intimated to exchanges and on company/CDSL websites.

Directors & Auditors

• No auditor or secretarial changes disclosed at AGM.
• Ghanshyam G. Trivedi to be re-appointed; retirement by rotation.

Business Overview

• Core business comprises tiles, sanitaryware, and bath fittings; growing Southern-market presence.
• Expansion plan includes a new southern facility with ~9 million sqm annual tile capacity.

Operational Highlights

• Q1 FY27 consolidated revenue ₹744 cr, up 24% YoY.
• EBITDA margin improved to 11.6%.
• Morbi supply disruptions eased toward quarter-end.
• New southern plant aims to serve growing market.
• Tiles capacity ~80 msm p.a.; Sanitaryware 0.48 mn pcs; Bath fittings 1.3 mn pcs.
• Production 10.99 msm; Own plants 6.21 msm, JVs 4.78 msm.
• Tile utilization 80%; standalone 83%.
• Sanitaryware utilization 77%; Faucets 95%.
• Sales mix: Own manufacturing 34%, JVs 34%, Others 32%.

Financial Performance

• Consolidated revenue ₹744 cr; YoY growth 23.7%.
• Consolidated EBITDA ₹86 cr; margin 11.6%.
• PBT ₹50 cr; PAT ₹34 cr; EPS ₹8.66 consolidated.
• Standalone revenue ₹688 cr; EBITDA ₹61 cr; margin 8.8%.
• EPS standalone ₹8.56; PAT - Controlling Interest ₹36 cr.

Capital Structure & Liquidity

• Total debt ₹251 cr (FY26), down from ₹302 cr.
• Total assets ₹2,012 cr; Net worth ₹842 cr; promoters 55.2% stake.

Strategic Priorities & Outlook

• Outlook: profitable growth via market share gains, premiumization, capacity utilization, cost discipline, cash flows.
• Plan to leverage brand and distribution network to capitalize on opportunities.
• 9 million sqm southern tile facility to address growing Southern market.

Risks & Mitigation

• Morbi cluster supply disruptions due to fuel shortages and gas prices; normalization expected by quarter-end.

Governance & Leadership

• Promoter stake 55.2% as of Jun 30, 2026; no governance changes reported.

Financial results approved

• Board approved unaudited standalone and consolidated results for quarter ended 30 June 2026 with limited review.
• Results reviewed by Audit Committee and approved by the Board.
• Limited Review Report by Singhi & Co accompanies the results.

Auditor remarks and consolidation

• Independent Auditor's Review Report states no material misstatement.
• Seven subsidiaries' interim results were not reviewed by Singhi; other auditors reviewed them.

Board meeting details

• Meeting held on 12 August 2026; results approved.