Shares of Somany Ceramics Limited have delivered around 250 per cent return to its shareholders in the last one year. The stock rose 8 per cent to hit an intraday high of Rs 905.85 on the Bombay Stock Exchange (BSE) after the company posted healthy earnings for the quarter ended September 2021.
It has been gaining for the last two trading sessions and ended 5.21 per cent higher at Rs 883.75 on BSE today. In the past one year, the share price jumped from Rs 258 to Rs 905.85, logging around 251 per cent return in this period.
An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 17.5 lakh today.
The scrip has jumped around 166 per cent since the beginning of this year. With a market capitalisation of more than Rs 3,700 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
Somany Ceramics Limited reported a standalone profit of Rs 34.96 crore for the quarter ended September 2021 as against a net profit of Rs 20.14 crore in the year-ago quarter. The company's net sales rose 32.5 per cent to Rs 557.45 crore during the quarter.
The company informed that the commodity prices including fuel and natural gas have witnessed an unprecedented increase and continue to rise, putting pressure on margins.
"We have reported a growth of 33 per cent as compared to the corresponding quarter last year and we are confident of maintaining the growth trend in the coming quarters. Our efficiency of managing our working capital discipline has further improved and our resolve to sustain this is inveterate," it added.
"Somany Ceramics Ltd.'s Q2FY22 result was in-line with our estimates on key parameters. The company witnessed robust product off-take in the retail segment which aided net sales growth. Though an increase in raw material prices was a concern, the management guided that increased cost was passed to the customers with a lag of 15-20 days," IDBI Capital said in a report.
"The management guided that sales volume growth will remain 15-20 per cent in H2FY22E. We believe timely capacity addition, focus on improving working capital cycle and healthy performance of bathware segment will drive sustainable earnings growth in the near future. We have introduced FY24E financials in this report. Maintain 'HOLD' with a revised target price of Rs 921, assigning 22x PER on FY24E," the brokerage house added.
According to MarketsMojo, the company has declared positive results for the last 4 consecutive quarters. The technical trend has improved from Mildly Bullish on November 8, 2021 and the stock is technically in a Bullish range now. Multiple factors for the stock are Bullish like MACD, Bollinger Band and KST.
Also, it is trading at a discount compared to its average historical valuations and with a Return on Capital Employed (ROCE) of 20.3, it has an 'Attractive' valuation.
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