SOMANYCERA Q3 FY26 earnings call.
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Revenue
₹682 Cr
verified against source
Revenue YoY
6%
reported change
EBITDA
₹62 Cr
latest reported figure
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record provenance
Actual signal trajectory
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What the record says.
Somany Ceramics reported Q3 FY26 consolidated sales of 677 crore, up 6% YoY with improving domestic demand from building completions and export growth to ~19,500 crore for the industry. EBITDA margin expanded 80bps to 9.2%, with PAT nearly doubling to 18 crore from 9 crore. Gross margins improved 2.2% sequentially from pricing discipline and lower discounting. The Somany Max plant loss reduced from 7.5 crore to 6 crore with Q4 expected to show substantial improvement toward break-even within 18 months. Total debt reduced from 288 crore to 231 crore with 70 crore repayment targeted in FY27-28. Guidance maintained: single-digit sales growth and EBITDA margin improvement of 1-1.5% in Q4. Key risks include continued capacity underutilization at Max and muted volume recovery despite better retail walk-ins. Working capital days increased to 14 from 11, warranting monitoring.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects another 100-150bps EBITDA margin expansion in Q4 FY26 through reduced Somany Max losses and better operating leverage.
- Max plant losses of 26-27 crore in FY26 expected to reduce below 10 crore next fiscal year with production ramp-up from February-March 2026.
- Management expressed high confidence in turning around the Max plant to profit situation within approximately 18 months from current date.
- Management maintained guidance of decent single-digit revenue growth for the full year, with Q4 expected to be a good quarter on all metrics.
Risks flagged
- The plant that was expected to break even in FY26 continues to incur losses (6 crore in Q3). While management targets substantial reduction in Q4, full turnaround pushed to FY28, representing a 2-year delay from initial expectations.
- An analyst highlighted gross margins declining from 60%+ (FY17-24) to 50-55% despite higher-margin GD product introduction. Management attributed this to tile price declines outpacing input cost reductions, without providing clear margin recovery timeline.
- Despite reporting improved retail walk-ins, management declined to quantify volume growth and capacity utilization remains at 80%, below the 85% seen in Q2, indicating underlying demand weakness.
- Brass prices increased 22-26% since April (570-580 to 770-780 per kg) but only 15-day pass-through occurred for bath fittings; tile realizations remain under pressure from discounting controls that may take months to normalize.
Key quotes
- We hardly using [propane]. It depends in the north plant we using natural gas. We have three different kinds of gas which we get and also we using a lot of biofuel. So we're kind of insulated when the Henry Hub goes up.
- We had mentioned that in FY26 the losses would be in the same range, in FY27 we had said that the losses from 25-26 crores will be down to below 10 crores and we continue with that guideline and we will demonstrate that from a moving average in quarter 4 itself.
- The growth has happened where approximately 25% of our tile counters are also sanitaryware counters but now that we've grown very large in bathware and formed our relations and proven to the market that we are excellent in quality and excellent in product, it is becoming easier for us to bundle this going forward with our tile dealers.
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