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ICICI Securities Report
We hosted Mr. Abhishek Somany, Managing Director of Somany Ceramics Ltd., for the I-Sec Virtual Corporate Day event.
The key takeaways from the event, which saw participation from seven marquee investors, include -
1. Faster-than-anticipated recovery in volumes thus far;
2. impressive cash collection since June 2020 leading to sizeable cash surplus situation (on standalone basis) despite prepayment of term loan worth Rs 250 million in August 2020;
3. last phase of unwinding of treasury operations under way (left over inter corporate deposits at mere Rs 120-130 million);
4. likely paring of debt to the tune of Rs 1 billion over the next 12 months;
5. likely fixed cost reduction of Rs 500-550 million in FY21E of which Rs 100-120 million would be of sustainable nature; and
6. structural improvement in Ebitda margins with close to double-digit margins in FY21 (excluding Q1), 11-12% in FY22 and moving back to 13-14% margin trajectory post FY22.
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