Somany Ceramics

Tension in the Middle East has led to a sharp spike in energy costs, forcing production halts and margin pressure across the Indian ceramic tile industry.

Somany Ceramics’ shares have fallen sharply amid weak tile demand and margin pressure, but brokerages remain bullish, betting on a turnaround at its loss-making Max plant and better margins.

Investors in plastic pipe and ceramic tile manufacturers should temper expectations for Q1FY26, as weak demand and pricing pressures persist. With muted growth and disappointing stock performances, recovery is uncertain despite potential boosts from home building later in FY26.

Weak demand, pricing pressures, and subdued exports have put tile makers on shaky ground. With earnings downgrades piling up and margin recovery still uncertain, the industry is bracing for a challenging end to FY25.

On an aggregate basis, 13 building materials stocks under the coverage of BOB Capital Markets have witnessed muted revenue growth for seven consecutive quarter.

Diwali picks 2024: Brokerage firm Choice Broking has suggested 10 stocks to buy in the festive season - Bajaj Auto, Bharat Dynamics, ACC Ltd, Somany Ceramics, TCS, HCL Tech, EFC (I) Ltd, Granules India, Global Health and Ugro Capital.

Stocks to buy: Nifty 50 has gained over 8 per cent this year, with experts predicting a rise to 25,000 by year-end. Investors are advised to choose stocks with strong fundamentals. Recommendations include LIC Housing, ICICI Lombard, Somany Ceramics, RailTel and MRPL.

Tile exports declined to 41 msm in January 2024 from a peak of 62 msm in August 2023, but March 2024 saw a turnaround. However, it remains to be seen whether the recent recovery sustains amid ongoing geopolitical uncertainty.