Somany Ceramics (531548) Q3 24/25 earnings summary

Executive summary

• Sales grew by up to 5.1% in Q3 FY25 despite weak domestic and export demand, reflecting operational resilience and outperforming previous quarters.

• Operating margins were maintained at 8.4%, with gross margins improving and capacity utilization rising above 80%.

• Strategic divestment of two joint ventures and expansion into construction chemicals through investment in Dura Build Care Private Limited.

• Distribution network expanded by 134 net dealers and 46 showrooms over nine months.

• Government policy changes and urbanization initiatives expected to support industry growth.

Financial highlights

• Consolidated sales rose 5.1% year-over-year to ₹640 crore in Q3 FY25; standalone sales grew 4% to ₹621 crore.

• Operating margin held at 8.4%, down from 9.7% year-over-year but stable sequentially.

• PAT declined 58.7% year-over-year to ₹10 crore in Q3; standalone PAT up 9.5% to ₹23 crore.

• Exceptional gain of INR 9.42 crore from JV disinvestment; exceptional items included both gains and losses from subsidiary divestments.

• Net debt-equity ratio reduced to 0.33 as of Dec'24; asset turnover at 2.3x.

Outlook and guidance

• Guidance for mid- to high single-digit growth; Q4 expected to be slightly better with green shoots visible.

• Strategic investments in construction chemicals and operational efficiency to drive future growth.

• FY25 and FY26 volume growth projected at high single digits to low double digits.

• Anticipates positive impact from government initiatives on disposable income and housing demand.