SOMANYCERA - Somany Ceramics Limited Share Price

Here are the major questions and their detailed answers from the Q&A section of the earnings call transcript:

Question 1: "Can we actually see some light at the end of the tunnel in the domestic market itself because the volume growth still seems to be on a muted side?"

Answer: Yes, we see a light at the end of the tunnel. Recent walk-ins in the market have improved, and our discussions with dealers indicate a positive trend. Customers are increasingly visiting showrooms, reflecting improved sentiment in domestic demand.

Question 2: "Can we also get some flavor on what's really happening with the projects market? How has the demand been for projects for you?"

Answer: Retail sales remain significant, comprising about 77% to 78% of our sales. However, our project business is growing, albeit gradually as approvals and material acquisition take time. We expect this segment to grow to approximately 75% next year.

Question 3: "Could you repeat the debt repayment number? Where would we see this number falling to in FY '27?"

Answer: Our current outside debt stands at INR 231 crores, with approximately INR 9 crores paid this year and around INR 70 crores in FY '27 and '28. We anticipate reducing this to about INR 50 crores by the end of FY '28.

Question 4: "Could you provide an update on the losses from the Max plant and its expected timeline for breakeven?"

Answer: We anticipate reducing losses from the Max plant to below INR 10 crores next year. While breakeven is likely 18 months away, we're confident in our ability to significantly improve the plant's performance.

Question 5: "How is the gas and propane mix currently in your operations?"

Answer: In the North plant, we primarily use natural gas, while the Morbi plant fluctuates between gas and propane based on pricing. Overall, we maintain flexibility to manage costs effectively across our different plants.

Question 6: "What is the state of the advertising spend for this quarter compared to last year?"

Answer: Our advertising expenditure this quarter is approximately 2%, mainly due to the absence of costs related to prior endorsements. Moving forward, we expect ad spend to return to 2.5%, aligned with our usual allocation.

Question 7: "What is your outlook for gross margins going forward, given the price changes in the industry?"

Answer: We need to adjust gross margins based on the cost of power and fuel. While margins have been squeezed, we are focusing on R&D and product mix improvement, which should help recover our EBITDA margins once we stabilize pricing.

Question 8: "With changes in the EU-India FDA, how will this impact Somany Ceramics?"

Answer: The EU deal will take time to materialize; however, the recent reduction of VAT in China will enhance India's export competitiveness. Consequently, a rise in exports could indirectly benefit Somany Ceramics, though our direct exports are only around 1.5% to 2%.

These summaries encapsulate the essence of the inquiries and the management's responses, focusing on clarity and concise information regarding the financial performance and strategic outlook of Somany Ceramics Limited.