External broker reports(aggregated public sources), HDFC Securities

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External broker reports(aggregated public sources)

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Thematic (Sector/Industry)

<div><ul><li>Tiles and bathware: Demand was impacted in the quarter amid intense heat.</li><li>Plastic pipes demand also remained subdued in Q1FY23 (though higher YoY on a low base).</li><li>Performance of companies: We expect national ceramic players to deliver ~50% YoY volume growth (on a low base), lower by ~7-10% QoQ.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p></div>

Tiles and bathware: Demand was impacted in the quarter amid intense heat.Plastic pipes demand also remained subdued in Q1FY23 (though higher YoY on a low base).Performance of companies: We expect national ceramic players to deliver ~50% YoY volume growth (on a low base), lower by ~7-10% QoQ.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Building Materials - Tiles, Pipes Segments Face Cost Headwinds

<div><div><div><p>Godrej Consumers: GCPL’s Q4 performance was a mixed bag, with in-line revenue but a miss on EBITDA margin.</p><div><div><div><p>JK Lakshmi Cement: We maintain our BUY rating on JK Lakshmi Cement (JKLC) with a revised TP of INR 735/share (8x Mar-24E consolidated EBITDA).</p><div><div><div><p>Somany Ceramics: We maintain BUY on Somany Ceramics with a revised target price of INR 950/share (13x Mar-24E consolidated EBITDA).</p></div></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Godrej Consumers: GCPL’s Q4 performance was a mixed bag, with in-line revenue but a miss on EBITDA margin.JK Lakshmi Cement: We maintain our BUY rating on JK Lakshmi Cement (JKLC) with a revised TP of INR 735/share (8x Mar-24E consolidated EBITDA).Somany Ceramics: We maintain BUY on Somany Ceramics with a revised target price of INR 950/share (13x Mar-24E consolidated EBITDA).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Godrej Consumers, JK Lakshmi Cement, Somany Ceramics

<ul>
<li>In Q4FY22, we expect both tiles and plastic pipe companies’ volumes to grow YoY, despite the high base</li>
<li>Despite earlier cost pass-through, we estimate margin compression YoY amid elevated gas prices for tiles companies, higher resin prices, and absence of inventory gains for plastic pipe companies</li>
<li>Hence, we expect aggregate revenue for our coverage universe to firm up 19% YoY</li>
</ul>
<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>


In Q4FY22, we expect both tiles and plastic pipe companies’ volumes to grow YoY, despite the high base
Despite earlier cost pass-through, we estimate margin compression YoY amid elevated gas prices for tiles companies, higher resin prices, and absence of inventory gains for plastic pipe companies
Hence, we expect aggregate revenue for our coverage universe to firm up 19% YoY

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Building Materials (Q4FY22 Results Preview): Healthy demand

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

<ul>
<li>Continuing our focus on building products, for this Insight, we speak to RM supplier, a manufacturer, a few retailers and dealers to understand the demand outlook going forward </li>
<li>Government spending remains one of the primary drivers in the Industry right now.</li>
<li>There is minor down trading seen in tiles, while the market structure in pipes seems to be in favour of organised players. </li>
</ul>


Continuing our focus on building products, for this Insight, we speak to RM supplier, a manufacturer, a few retailers and dealers to understand the demand outlook going forward 
Government spending remains one of the primary drivers in the Industry right now.
There is minor down trading seen in tiles, while the market structure in pipes seems to be in favour of organised players. 


Channel Insight #31 - Building Products (RM Supplier, Manufacturer, Retailer, Dealer)

Equity Bottom-Up

<p>However, EBITDA fell 2% YoY, owing to the elevated gas price impact. The company continues to keep a tight leash on its debtors. Timely capacity expansion in Q4FY22 should bolster its volume and market share growth. We maintain BUY on Somany Ceramics with an unchanged target price of INR 1,130/share (13x Dec-23E consolidated EBITDA). We continue to like SOMC for its strong retail distribution, improving product mix, and tightened working capital (WC).</p><div><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

However, EBITDA fell 2% YoY, owing to the elevated gas price impact. The company continues to keep a tight leash on its debtors. Timely capacity expansion in Q4FY22 should bolster its volume and market share growth. We maintain BUY on Somany Ceramics with an unchanged target price of INR 1,130/share (13x Dec-23E consolidated EBITDA). We continue to like SOMC for its strong retail distribution, improving product mix, and tightened working capital (WC).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Somany Ceramics (Q3FY22 Result update): Strong performance and outlook. Maintain BUY

India

Somany Ceramics Limited manufactures ceramic wall and floor tiles. The Group exports its products to Europe, the Middle East, Australia, New Zealand, Mauritius, South Africa and Sri Lanka.

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Somany Ceramics (SOMC IN)

Building Materials - Tiles, Pipes Segments Face Cost Headwinds

In Q1FY23, we expect volumes of both tiles and plastic pipe companies to moderate QoQ. However, given last year’s low base, we expect a strong...

HDFC Securities

HSIE Results Daily: Godrej Consumers, JK Lakshmi Cement, Somany Ceramics

Godrej Consumers: GCPL’s Q4 performance was a mixed bag, with in-line revenue but a miss on EBITDA margin. Consolidated revenue grew 7% YoY

HDFC Securities

Building Materials (Q4FY22 Results Preview): Healthy demand

In Q4FY22, we expect both tiles and plastic pipe companies’ volumes to grow YoY, despite the high base Despite earlier cost pass-through, we...

HDFC Securities

Channel Insight #31 - Building Products (RM Supplier, Manufacturer, Retailer, Dealer)

Continuing our focus on building products, for this Insight, we speak to RM supplier, a manufacturer, retailers and dealers to understand the...

Pranav Bhavsar

Somany Ceramics (Q3FY22 Result update): Strong performance and outlook. Maintain BUY

However, EBITDA fell 2% YoY, owing to the elevated gas price impact. The company continues to keep a tight leash on its debtors. Timely capacity...

HDFC Securities

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