BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Systemic corrections initiated by Somany Ceramics Ltd. over the past four to six quarters, namely
- unwinding of treasury operations (majority of the inter-corporate deposits being recovered);
- systems and processes falling in place (post the employee fraud and broker default); and,
- sharp curtailment in receivables, particularly, post Covid-19 outbreak, are likely to boost investor confidence.
Besides these corrections, our checks suggest that recovery in volumes has been much faster than anticipated (August 2020 is registering a growth over August 2019).
Improving operating leverage, benign gas costs and stable industry pricing are also likely to drive double-digit Ebitda margin for the company going forward.
With steadily improving balance sheet quality and earnings visibility, we expect the valuation gap between the Somany Ceramics and the market leader (Kajaria Ceramics Ltd.) to narrow (which has widened sharply over the last one year) going forward.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
POPULAR