Tile samples hang on display inside a showroom. (Photographer: David Paul Morris/Bloomberg)

Somany Ceramics Is The Cheapest In Over Four Years

Somany Ceramics Ltd. is not only analysts’ preferred bet among India’s two large tile makers, but the stock is also the cheapest in four years.

Shares of Somany Ceramics trade at a one year forward price-to-earnings multiple of 19.3 times. That’s a 19 percent discount to the industry average.

Somany Ceramics Is The Cheapest In Over Four Years

Eighty-nine percent of the analysts tracked by Bloomberg have a ‘Buy’ rating on the stock with a consensus target price of Rs 922.25 apiece, indicating an upside potential of 70.6 percent. In comparison, Kajaria Ceramics Ltd. has a ‘Buy’ rating of 66 percent.

Even though the transition from unorganised to organised players after the rollout of the goods and services tax has not happened to a large extent so far, the implementation of e-way bill will benefit organized players like Somany Ceramics. This is likely to be reflected in the next one to two quarters, brokerage house Edelweiss said.