Somany Ceramics (531548) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 saw muted demand and pricing pressure, but sales grew 4.4% YoY (3% by volume), with Nepal sales contributing 1.2% but not consolidated due to local laws.

• Focus on cost optimization, operational efficiency, and leveraging expanded product portfolio and distribution network.

• Government housing and infrastructure initiatives are expected to support gradual demand recovery.

• Net profit for Q1 was Rs. 735 lakhs (consolidated), down from Rs. 1,226 lakhs YoY.

• Acquisition of 51% equity in Dura Build Care Private Limited completed in July 2025, making it a subsidiary.

Financial highlights

• Consolidated sales grew 4.4% YoY to ₹601 crore in Q1; standalone sales up 3.6% YoY to ₹580 crore.

• Operating margin at 8.0% for Q1; EBITDA margin improved to 6.1% standalone; gross margin rose 3.2% QoQ but fell 1.8% YoY.

• PAT for FY25 at ₹58 crore, down 41.7% YoY; Q1 PAT at ₹10 crore; EPS at ₹14.65 for FY25 and ₹2.53 for Q1.

• Standalone capacity utilization was 72%, consolidated dropped from 81% to 77%; tiles production at 10.57 msm in Q1.

• Sanitaryware and bath fittings revenue was INR 63 crore, up from INR 61 crore; faucets grew from INR 28 crore to INR 31 crore.

Outlook and guidance

• Guidance maintained for high single-digit growth and EBITDA margin expansion of about 1.5%.

• Confident of margin improvement with better capacity utilization; H2 expected to be significantly better.

• Q2 already showing improvement, with sanitaryware back to full capacity and Max plant expected to recover in another quarter.

• Strategic focus on project sales and retail footprint to capitalize on recovery opportunities.

• Investment in new subsidiary to address future cash flow requirements and capital expenditure.