We have Added 25% Capacity In Last 18 Months: Abhishek Somany, Somany Ceramics
What is the scenario for the overall ceramics industry in terms of business growth in the next 3 years?
The ceramics industry is coming out of a subdued decade and is poised for remarkable growth over the next ten years in India. With increasing urbanization expected to be about 150 million in next decade, increasing replacement demand, government push for infrastructure development, and a surge in demand for aesthetically pleasing and functional spaces, the demand for ceramic tiles is set to soar. Ceramic tiles are increasingly getting adopted as a sustainable solution replacing natural stone and wood. Advancement of technology has opened new possibilities wherein large format tiles are used as slabs, or thicker tiles being used for cladding. We anticipate a significant expansion of the industry, presenting us with exciting opportunities to further solidify our market position.
What do you think plays a bigger role in revenue maximization when it comes to the tile industry — pricing or quality?
We firmly believe that quality is the cornerstone of revenue maximization in the tile industry. While pricing is undoubtedly a critical factor for customers, it is the quality and value proposition of our products that sets us apart. Our commitment to design, innovation and eco-friendly practices ensures that customers not only receive the best value for their investment but also experience long-term satisfaction. By prioritizing quality, we establish enduring customer relationships and create a positive brand perception that drives revenue growth.
What are some present-day market challenges that companies need to overcome?
The current market landscape presents several challenges that companies must navigate to ensure consistent growth. Some key challenges include high gas and freight cost, increasing competition, rapidly changing consumer preferences, evolving technology, and sustainability expectations. To overcome these challenges, companies must stay agile, invest in research and development, embrace innovation, foster strong customer relationships, and align with sustainable practices. At Somany Ceramics, we proactively address these challenges through our customer-centric approach, emphasis on innovation, and commitment to sustainable growth. As far as business challenge is concerned, cost escalation primarily due to volatile gas price has huge implication on the profitability. At the same time unfair business practices by a large number of unbranded players situated in Morbi lead to higher competition as well as price instability in the market.
What are your investment plans?
To achieve consistent and sustainable growth, we have already put in place a robust expansion and investment plan in place. In last 24 months we invested Rs 600 crore and have increased our capacity by 25 per cent capacity. We are allocating significant resources towards research and development, enabling us to continuously innovate and introduce new product lines that resonate with our customers. Additionally, we are investing in advanced manufacturing technologies to enhance productivity, improve operational efficiency, and meet the increasing demand. Furthermore, we are expanding our distribution network, both domestically and internationally, to reach new markets and strengthen our market presence.
What is your target for the next 5 years?
In the next five years, Somany Ceramics aims to target a diverse range of customers, including homeowners, architects, interior designers, builders, and commercial developers. We recognize the importance of innovation and customization in meeting the unique preferences of our customers. Therefore, our business decisions are centered on expanding our product portfolio, offering a wide range of designs, textures, and sizes, and providing innovative solutions that cater to the specific needs of each target group. By focusing on customer satisfaction, we aim to further penetrate the market and solidify our position as the go-to brand for ceramic tiles, bathware and allied products. We have invested heavily and added almost 25 per cent capacity in the last 18 months. We are on a good trajectory of a double digit CAGR growth in the topline and expecting to operate at double digit EBIDTA in next 2-3 years.
What is your overview of the tile industry in terms of financial performance in the next 5 years?
The outlook for the tile industry's financial performance in the next five years is highly promising. With a steady increase in construction activities, rising disposable incomes, and growing awareness of the importance of aesthetically appealing spaces, the demand is expected to witness substantial growth. Indian tile industry is expected to double in next 5 to 7 years in the backdrop of growth in domestic market as well as huge upsurge in exports. This, in turn, bodes well for the financial performance of companies in the industry, including Somany Ceramics.
How did you perform in FY23 and the past two fiscal years?
As for the financial year 2023, we witnessed robust revenue growth, driven by increased market share, successful product launches, and effective cost management strategies. Our commitment to quality and customer satisfaction remained unwavering, allowing us to strengthen our position in the market. In fiscal years 2021 and 2022, we showcased impressive financial performance. Despite the initial disruptions caused by the pandemic, we swiftly adapted to the changing market dynamics and emerged stronger. Looking ahead, we are confident to deliver robust financial performance in line with the industry's upward trajectory.
