A laggard no more: Why analysts are betting on Somany Ceramics even after a tough year

Subscribe to enjoy similar stories. In a tiles sector grappling with weak demand, Somany Ceramics has clearly fallen behind its peers. Its shares have slid 27% over the past 12 months up to 12 January, far steeper than the 2% decline in Kajaria Ceramics and the 11% fall in Orient Bell over the same period.

Yet the market’s verdict is at odds with broker opinion. Of the 21 brokerage firms tracking Somany Ceramics, 19 recommend ‘buy’, ‘add’ or ‘accumulate’, while only two suggest a ‘hold’, according to Bloomberg data. The divergence reflects a stock caught between near-term execution challenges and a broker consensus betting on a multi-year turnaround.

Analysts argue that Somany’s underperformance stems less from structural weakness and more from plant-level losses and margin pressures that they expect to ease. The optimism, however, rest on a timely recovery at a single, still loss-making facility—and on a demand rebound that remains uncertain. The stock’s sharp decline reflects both operational and sector-specific challenges.

Somany’s slower volume growth relative to Kajaria Ceramics, coupled with a wide margin gap driven by differences in sales mix, has weighed heavily on performance, said Udit Gajiwala, lead analyst at YES Securities. Kajaria’s sharper focus on cost rationalization has further widened the margin gap between the two players, he added. Beyond the slower-than-expected demand recovery, losses at Somany’s Max plant have been a major drag, said Keshav Lahoti, equity research analyst at HDFC Securities.