Somany Ceramics Outlines Path to 11.3% EBITDA Margin by FY27

Somany Ceramics targets an EBITDA margin of ~11.3% by FY27 and a further 100 bps expansion by FY28. Export volumes saw a 51% YoY decline in Q1 FY27.

Reader Takeaway: Margin expansion goals supported by premiumization and capacity growth, countered by persistent gas price volatility in Morbi.

What just happened

Somany Ceramics has unveiled a medium-term growth strategy centered on profitability and operational efficiency. The company aims to move EBITDA margins from its 9.3% base to ~11.3% by FY27, supported by a shift toward premium product offerings and plant debottlenecking. The company also reported a successful reduction in debt, bringing the net figure down to Rs 251 crore by the end of FY26, resulting in a debt-to-EBITDA ratio of 0.97x.

Why this matters

The company is aggressively scaling its bathware business, targeting Rs 500 crore revenue by FY28. Simultaneously, a Rs 220 crore investment in South India aims to add 9+ MSM of glazed vitrified tile (GVT) capacity, expected to generate over Rs 350 crore in annual revenue once commissioned in the next 12-15 months.

Risks to watch

Industry headwinds persist at the Morbi cluster, where natural gas prices have doubled from Rs 45/scm to Rs 90/scm. Management does not expect significant price relief in the near term. Furthermore, the export division faces a sharp slowdown, with revenue dropping to Rs 2,900 crore in Q1 FY27 from Rs 4,800 crore in the same quarter last year.

What to track next

Investors should monitor the execution of the South India capacity expansion project and the turnaround performance of joint ventures, which management expects will provide a Rs 35-40 crore PBT swing. The recovery trajectory of export volumes will also be critical to watch in subsequent quarters.