1. Opening Hook
When half of North India turned into a swimming pool and a GAIL pipeline decided to spring a leak, Somany Ceramics still managed to grow. The management sounded like firefighters calmly narrating an arson incident. A 20-day gas outage, soggy demand, and government order delays tried hard to sink margins — but Somany held its porcelain nerve. The company calls it an “aberration.” Investors call it déjà vu. Yet, there’s light at the end of the gas pipe — and possibly double-digit margins next quarter. Grab your safety goggles; this call had more cracks than a bathroom tile. 🚿
2. At a Glance
- Revenue up 3.6%:North India was underwater; sales somehow stayed afloat.
- EBITDA margin 7.9%:Down from 8.5% — that 20-day gas outage really burned.
- Capacity Utilization 75%:Kassar plant went on an unscheduled vacation.
- Debt-free standalone:CFO flexed this like a ceramic bicep. 💪
- JV losses:₹7.5 crore down the Max drain; Vintage also got a facelift.
- Dealer network 3,000+ strong:Retail army still loyal, even when the rains weren’t.
3. Management’s Key Commentary
“Despite floods in the North, we grew 3.6%.”(Translation: Even Noah’s Ark couldn’t stop tile sales.)
“The gas outage at Kassar cost us 1.2% in EBITDA.”(Who knew plumbing could move stock prices?)
“Our JVs are still in losses, but will break even by Q4.”(In corporate dialect: please stop asking till March.)
“Standalone we’re strong; console dragged by JVs.”(So half the company is winning, half is whining.)
“No capex for next 12–18 months; focus on profitability.”(Translation: we’re tired of buying kilns — time to make them pay.)
“GVT tiles now 41% of mix, moving to 50% next year.”(Glossy tiles, glossy guidance — consistency unmatched.)
“Margins to improve 150 bps in H2.”(That’s assuming no more pipelines or rain gods intervene.) 🌧️
4. Numbers Decoded
| Metric | Q2 FY26 | QoQ / YoY | Remarks |
|---|---|---|---|
| Revenue | +3.6% | Despite 46% sales exposure to flood-hit North | |
| EBITDA Margin | 7.9% | -60 bps | Hurt by 20-day gas outage |
| Capacity Utilization | 75% | Flat | Kassar shutdown + muted demand |
| Net Debt (Standalone) | Nil | CFO flexed zero leverage | |
| JV Debt | ₹257 cr | 75% concentrated in Somany-Max JVs | |
| Dealer Count | ~3,000 | +119 in H1 | 520 exclusive showrooms |
| Product Mix | GVT 41%, PVT 26%, Ceramic 33% | Premium shift visible | |
| Brand Spend | 2% of revenue | Same as last quarter — stable marketing push |
Decoded:Without floods and gas leaks, margins could’ve hit 9%. The CFO wants a 150 bps H2 bump, but that depends on sunshine, sanity, and demand in the North.
5. Analyst Questions
Q:Will margins recover after the Kassar fiasco?A:“Yes, 1–1.2% hit will bounce back.” (Assuming no more adventures in gas pipelines.)
Q:Any capex plans?A:“None for 18 months.” (Translation: debt diet continues.)
Q:When do we see 10%+ EBITDA margins?A:“Next couple of quarters.” (So… before the next monsoon?)
Q:Why is standalone stronger than consol?A:“Because JVs are still catching up.” (A polite way to say ‘drags.’)
Q:Any buyback since the stock’s at decade lows?A:“Not now, maybe later.” (CFO’s version of ‘It’s complicated.’)
6. Guidance & Outlook
Somany expectsmid-to-high single-digit growth for FY26, with margins expanding 100–150 bps in H2 as plants stabilize and demand normalizes. Exports (a modest 2% of revenue) aren’t the hero —
