This article first appeared on GuruFocus .
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Revenue:INR854 crores in Q2 FY27, up ~25% YoY.
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Volume Growth:5.5% for the quarter.
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EBITDA Margin:11.7% in Q2 FY27, improved on better capacity utilization, full price increase pass-through, and better product mix.
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Tiles Revenue:INR723 crores, up 27% YoY.
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Bathware Revenue:INR88 crores, up 15% YoY (bathware segment grew ~18%).
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Building Solutions Revenue:~INR45 crores, up ~28% YoY.
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JV Performance:Profit of INR3 crores in Q2 and INR6 crores in H1, versus losses of INR12 crores (Q2) and INR23 crores (H1) last year; expected swing of at least INR40 crores for the year.
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Gas Cost:~INR70 per standard cubic meter, up from INR45 in FY26 and INR43 in Q2.
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Marketing Spend:Maintained at 2.3%2.5% of sales, to continue for the full year.
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Dealer Additions:~156 net dealer additions in H1; net showroom increase of ~35 in H1.
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FY27 Guidance:High single-digit revenue growth; bathware growth up to 20%; EBITDA margin improvement revised to ~2%2.5% over FY26.
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Release Date: November 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue grew approximately 25% to INR854 crores in Q2 FY27, with tiles up 27%, bathware up 15%, and building solutions up 28%.
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EBITDA margin improved to 11.7% due to better capacity utilization, full pass-through of price increases, and improved product mix.
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Joint ventures turned profitable, contributing INR3 crores in Q2 and INR6 crores in H1, a significant swing from losses last year.
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Company expects to achieve high single-digit volume growth for FY27 and has revised EBITDA margin improvement guidance to 2%-2.5% over FY26.
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Capacity expansion plans are on track, including doubling of the South JV plant and increasing stake in the sanitaryware JV to 76%, which will drive future growth.
Negative Points
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Volume growth was only 5.5% in Q2, lower than the industry leader's near double-digit growth, partly due to plant maintenance and upgrades.
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Exports for the industry declined significantly by 31.2% in the first five months, impacting Morbi players and overall industry sentiment.
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Gas prices remain volatile at around INR70 per standard cubic meter, up from INR45 last year, posing a risk to margins if not fully passed on.
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Project sales share increased to 24% from 19.5%, which typically carries lower realizations and may impact overall margins.
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Faucet segment has not been able to fully pass on the sharp increase in brass prices, as industry leader Jaguar has not raised prices, limiting pricing power.
Q & A Highlights
Q: With gas prices volatile and Morbi facing an export crisis, how sustainable is the current margin expansion, and what is the revised EBITDA guidance for FY27? A: Abhishek Somany (MD & CEO) stated that despite gas prices rising to ~INR70/scm from INR45/scm in FY26, the company has achieved a full pass-through. Due to better capacity utilization, a favorable product mix, and a significant swing in JV performance (from a loss to a profit), the company has revised its EBITDA margin improvement guidance upward to 2%2.5% over FY26 levels, targeting margins upwards of 11.5%12% for the full year.
Q: Can you provide an update on the capacity expansion plans, specifically regarding the South JV (Serawit) and the sanitary ware JV? A: Abhishek Somany (MD & CEO) and the CFO outlined that the company is doubling the Serawit plant in the South, adding 1112 million square meters. The total CapEx for this is ~INR250 crore, funded 50:50 via debt and equity, with Somany's share being ~INR60 crore. Additionally, the company is increasing its stake in the sanitary ware JV to 76% from 51%. These expansions are expected to be commissioned by September next year.
Q: How is the export decline from Morbi impacting the domestic market, and what is the outlook for H2 FY27? A: Abhishek Somany (MD & CEO) noted that Morbi exports have declined significantly (down ~31% in value), leading to ~35% of Morbi units shutting down. While this creates excess domestic supply, Somany has maintained pricing discipline. However, the company expects better volume growth in H2 FY27 as plant upgrades are complete, with October already showing strong performance. The company maintains a high single-digit volume growth guidance for FY27.
Q: What is the current status of the JV losses, and how have they contributed to the overall financial performance this quarter? A: Abhishek Somany (MD & CEO) reported a significant turnaround in the JVs. Compared to a loss of INR12 crore in Q2 FY26 and INR23 crore in H1 FY26, the JVs have turned profitable with INR3 crore in Q2 FY27 and INR6 crore in H1 FY27. The company expects a total swing of at least INR40 crore for the year, which is a major contributor to the improved EBITDA margins.
Q: What is the current GBT (Glazed Body Tiles) mix, and how will the new capacity additions change this mix and margins? A: Abhishek Somany (MD & CEO) stated that GBT currently constitutes 45% of the mix, up from 41% last year. With all upcoming expansions (approx. 6070 million sqm) dedicated to GBT, the company expects this share to rise to 65%70% over the next 23 years. While GBT offers slightly better margins, the primary margin driver remains overall capacity utilization and cost efficiency.
Q: How is the demand environment shaping up in the retail versus project segments? A: Abhishek Somany (MD & CEO) mentioned that while domestic demand remains resilient, the mix is shifting slightly. Retail, which was 80.5% last year, is now approximately 76%, indicating a 4%5% shift toward project sales. The company expects project sales to increase by another 2% going forward, as they provide significant volume, though at slightly lower realizations compared to the retail channel.
Q: Can you quantify the capacity added through debottlenecking in Q2, and what is the outlook for volume growth? A: Abhishek Somany (MD & CEO) explained that the debottlenecking efforts will add about 4 million square meters of annualized capacity. While Q2 volume growth was restricted to 5.5% due to planned plant upgrades and maintenance, the company expects Q3 to be better than Q2. For the full year, the company aims to sell 7980 million square meters.
Q: What is the pricing trend in the bathware and faucets segment given the raw material inflation? A: An Unidentified Company Representative explained that while sanitary ware margins are slightly above tiles, the faucets segment has faced pressure due to brass prices doubling in the last 18 months. The industry has not been able to pass on the full impact of brass inflation. However, for sanitary ware, most of the gas and fuel-related price increases have been successfully passed on to the consumers.
Q: How is the Building Solutions (LSV) business performing, and what are the growth expectations? A: Abhishek Somany (MD & CEO) stated that the Building Solutions segment is performing very well, growing at 40%50%. The company recently commissioned a large plant in the North and started a South plant. This segment, along with sanitary ware, is expected to grow faster than the core tiles business and contribute 20%25% of total revenue in the next 23 years.
Q: With the current geopolitical situation, is there a risk that gas prices could make production unviable? A: Abhishek Somany (MD & CEO) clarified that tiles remain the cheapest flooring option, and even a 50% price hike would keep them competitive against alternatives. The company has made its plants fungible between LPG, propane, and natural gas to mitigate risks. While prices are currently at INR70/scm, the company believes the government has ensured adequate gas availability, making a supply-driven shutdown unlikely.
Q: What is the outlook on the competitive landscape with Morbi, and how does the US ban on engineered marble affect Somany? A: Abhishek Somany (MD & CEO) noted that Morbi is becoming less competitive due to high gas prices, export challenges, and rising land/freight costs, which is favorable for organized players. Additionally, the recent US ban on engineered marble and quartz could open up opportunities for Indian tile exporters, including Somany, to fill the gap in the US market.
Q: Can you provide a breakdown of the revenue growth across Tiles, Bathware, and Building Solutions for Q2
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
