Somany Ceramics has announced a partial restoration of operations at its Kassar plant in Bahadurgarh, Haryana, following the resumption of natural gas supply. This development comes after a temporary disruption caused by an incident in GAIL's Gauna-Bawana pipeline.

Partial Restoration of Operations

According to a regulatory filing by the company, the natural gas supply to the Kassar plant, which was earlier fully disrupted, has now been partially restored. As a result, Somany Ceramics has been able to resume operations in part at this facility.

Mitigation Efforts and Production Outlook

The company is currently assessing other options to mitigate the disruption and gradually scale up production at the affected plant. This proactive approach demonstrates Somany Ceramics' commitment to maintaining its operational efficiency despite the challenges faced.

Business Continuity and Sales Impact

Importantly, Somany Ceramics has assured stakeholders that the ongoing disruption will not impact its sales. The company emphasized that all its other manufacturing locations remain fully operational, which should help in maintaining supply chain continuity and meeting market demand.

Management's Statement

Anuj Kalia, Company Secretary & Compliance Officer of Somany Ceramics, stated in the regulatory filing, "The Company is in the process of assessing other options for mitigating the disruption and to gradually scale up the production. All other manufacturing locations of the Company remain fully operational. The sales will not be impacted by the ongoing disruption."

Looking Ahead

Somany Ceramics has committed to keeping the stock exchanges informed of any further material developments regarding the situation at the Kassar plant. This transparency is crucial for investors and stakeholders to stay updated on the company's operational status.

The partial resumption of operations at the Kassar plant is a positive step for Somany Ceramics, indicating the company's resilience and ability to respond quickly to operational challenges. As the situation continues to evolve, market observers will be keen to see how quickly the company can fully restore operations at the affected facility.

Somany Ceramics , a leading player in the Indian ceramics industry, has reported a modest 4% year-on-year revenue growth for the first quarter, despite facing operational challenges and reduced capacity utilization.

Financial Highlights

• Consolidated revenue stood at Rs. 601.00 crores
• Sales volume increased by 3% year-on-year
• Gross margin improved 3.20% quarter-on-quarter but declined 1.80% year-on-year
• Consolidated capacity utilization dropped from 81% to 77%

Operational Challenges

The company faced several operational hurdles during the quarter:

• The Max plant, which produces high-end tiles, operated at only 51-52% utilization
• The sanitaryware plant experienced a major kiln shutdown but has since returned to 100% capacity
• Overall consolidated capacity utilization declined from 81% to 77%

Segment Performance

• GVT (Glazed Vitrified Tiles) segment showed strength, increasing to 40% of revenue from 37% last year
• Ceramic tiles and PVT (Polished Vitrified Tiles) segments declined

Strategic Initiatives

Somany Ceramics has taken several steps to address the challenges:

• Launched a joint venture with Durabuild for construction chemicals, targeting the Rs. 6,000.00 crore waterproofing market
• Implementing measures to improve capacity utilization, especially at the Max plant
• Planning to make plants more fungible to produce floor tiles in addition to wall tiles

Management Outlook

Despite the challenges, the management maintains a positive outlook:

• Guidance of high single-digit revenue growth remains unchanged
• Expects 1-1.5% EBITDA margin expansion
• Confident of improved performance in the second half of the fiscal year

Future Plans

The company is focusing on value addition and moving up the value chain:

• Scheduled product launches in September and post-Diwali
• Continuing to innovate and improve product designs
• Exploring opportunities in both mid-premium and premium segments

Abhishek Somany, Managing Director and CEO, commented, "While Q1 has been challenging, we are taking corrective actions to improve capacity utilization and profitability. We remain confident in our ability to achieve our growth targets and expand our margins as we move forward."

As Somany Ceramics navigates through a competitive market landscape, the company's focus on innovation, capacity optimization, and strategic expansions will be crucial in maintaining its market position and driving growth in the coming quarters.

Investor Relations

The company held its Q1 earnings conference call on August 14, where management discussed the results and future outlook with investors and analysts. The full transcript of the call is available on the company's website for further details.