As Iran Israel disaster clouds outlook for tile makers, what’s subsequent for Cera, Kajaria, Somany after 26% slide?
In a be aware, JM Monetary analyst Dharmesh Shah mentioned organised gamers are higher positioned on account of greater stock (45 to 60 days versus 18 to twenty days for unorganised items), opining that the continued disruption may even result in the everlasting closure of 5 to six% of vegetation. He additional sees phased worth hikes of Rs 25 to Rs 85 per sqm (7 to fifteen%) for GVT and PVT tiles by organised gamers as fuel accounts for 20 to 25% of manufacturing prices.
“The US Iran Israel battle has disrupted gas provide in Morbi, forcing shutdowns at 90 to 95 out of 700 to 725 tile vegetation amid propane shortages and potential cessation of Gujarat Gasoline provide after March 15. Gasoline switching provides restricted quick time period flexibility as managed shutdown and restart takes two to 3 days and kiln modifications for alternate options equivalent to RLNG may take a minimum of a month,” the be aware mentioned.
Furthermore, export outlook stays weak as 35 to 40% of Morbi shipments go to the Center East, the place commerce flows are presently disrupted, the be aware added.
JM’s suggestions on Kajaria, Somany and Cera
Kajaria Ceramics
Kajaria Ceramics, the most important listed participant by market capitalisation (Rs 14,929 crore), is a prime decide for this brokerage with a Purchase advice. The goal of Rs 1,125 implies a 17% upside over Rs 958, the worth at which the inventory was really useful.
The inventory is presently buying and selling at Rs 939.90, down 2% from Wednesday’s closing worth.
Kajaria shares have declined 24% prior to now six months whereas sustaining a 5% uptick over a one yr interval. Additionally Learn | JioBlackRock Flexi Cap Fund provides Swiggy, Gujarat Gasoline; exits Mahanagar Gasoline and 18 others
Somany Ceramics
JM has an Add ranking on Somany, an organization with a market capitalisation of Rs 1,552 crore. Its inventory has declined 20% over a six month interval whereas sliding 9% in a yr.
The inventory provides an 18% potential upside, JM mentioned, estimating the goal worth at Rs 435. It’s presently buying and selling at Rs 378 and was really useful at a worth of Rs 370.
Because the warfare entered its thirteenth day, a possible truce stays out of sight within the close to time period.
Somany earlier knowledgeable the exchanges that it acquired a communication from GAIL (India) stating that its plant in Bahadurgarh, Haryana will obtain restricted fuel provide in keeping with the revised provide rules issued by the Ministry of Petroleum and Pure Gasoline on March 9.
The fuel provides to industrial shoppers will probably be maintained at 80% of the previous six months’ common fuel consumption and any overdrawal will probably be invoiced as per the relevant contractual phrases and situations, with impact from March 12, the change submitting mentioned.
“This will have a partial influence on the Firm’s manufacturing actions on the plant. The Firm is actively evaluating the state of affairs and taking obligatory measures to minimise the influence. Contemplating the Firm’s current stock ranges, provides are persevering with within the regular course of enterprise,” the submitting mentioned.
Cera Sanitaryware
JM stays least bullish on Cera amongst its friends, assigning a Cut back ranking with a goal of Rs 5,200, which is a 12% upside over Rs 4,652, at which the inventory was really useful. Its shares are presently buying and selling round Rs 4,685.
Cera has been the most important laggard within the pack, falling 26% prior to now six months whereas witnessing an 11% correction over a one yr interval.
Nifty is down almost 5% prior to now six months whereas the BSE Sensex has corrected 6% in the identical interval.
Cera has additionally knowledgeable the exchanges about receiving a communication from Sabarmati Gasoline concerning provisional restrictions on fuel provide as much as 50% of the Each day Contracted Amount (DCQ) with impact from March 6, 2026 until additional discover.
“This disruption could have a brief and partial influence on the corporate’s manufacturing actions,” the submitting mentioned.
(Disclaimer: The suggestions, strategies, views and opinions given by the specialists are their very own. These don’t signify the views of The Financial Instances.)
