Somany Ceramics Ltd Management Discussions

GLOBAL ECONOMY

The global economy stands at a pivotal moment. After enduring a prolonged period marked by extraordinary shocks and volatility, CY 2024 brought early signs of stabilization. Inflation, though still elevated, began a cautious but steady retreat from its multidecade highs, gradually moving closer to the targets set by central banks. Labor markets, once under immense strain, showed marked signs of normalization, with both unemployment and job vacancy rates reverting to their prepandemic norms.

Yet, just as a fragile sense of balance was beginning to take hold, a fresh wave of uncertainty has begun to ripple through the international economic landscape. A series of significant policy shifts are reshaping established dynamics. Since February, the United States has introduced successive rounds of tariffs targeting key trading partners, prompting swift and sometimes retaliatory responses. These developments have reignited tensions across the global trade system, challenging the resilience of economies worldwide and casting a renewed shadow over the outlook for sustained recovery.

In CY 2024, global growth stood firm at 3.3%, though the recovery was not uniform. While key regions such as Europe and parts of Asia experienced a dip in manufacturing output due to supply chain bottlenecks and subdued demand, the services sector came to the forefront. Its robust performance mitigated V the effects of manufacturing decline,

v supporting overall growth in multiple regions.

In the second quarter of CY 2025, the US under the Trump Administration imposed new protectionist measures, adding tariffs on imports like automobiles, auto parts, steel, and aluminum. On 05 April, 2025, an additional 10.0% tariff was announced on most imports from nearly all countries, layered over existing duties. In retaliation, major partners, including China and the EU imposed tariffs on US exports.

While the US declared a 90-day suspension on many reciprocal tariffs to enable negotiations, key sector-specific tariffs on steel, aluminum, and automobiles remain unchanged. Additionally, a broad 10.0% baseline tariff now applies to all non-exempt imports. Trade tensions between the US and China escalated sharply from early April, with both imposing punitive tariffs exceeding 100.0% on each others goods. The situation remains uncertain, especially concerning whether suspended tariffs will be reinstated if negotiations fail to produce substantive agreements.

(Source: https://www.india-briefing.com/news/us-

halts-26-tariffs-on-indian-goods-for-90-days-36872.html/#:~:text=Base%20tariff%20to%20remain%20in%20place&text=While%20the%2026%20percent%20duty,established%20during%20Trumps%20first%20term.)

Performance of Major Economies

The United States

The United States economy grew by 2.8% in CY 2024. Looking ahead growth is projected to moderate slightly to 1.8% in CY 2025, before further declining to 1.7% in CY 2026, reflecting a gradual performance decline.

(Source: https://www.imf.org/en/Publications/WEOz lssues/2025/04/22/world-economic-outlook-april-2025)

China

Chinas economy registered a growth rate of 5.0% in CY 2024. However, projections suggest a measured deceleration, with growth expected to moderate to 4.0% in CY 2025 and CY 2026.

(Source: https://www.imf.org/en/Publications/WEO/ lssues/2025/04/22/world-economic-outlook-april-2025)

The UK

The UK economy recorded a modest growth rate of 1.1% in CY 2024, Forecasts indicate stable performance of 1.1% in CY 2025, followed by a further recovery of 1.4% in CY 2026.

(Source: https://www.imf.org/en/Publications/WEO/ lssues/2025/04/22/world-economic-outlook-april-2025)

Euro Area

After expanding at 0.9% in CY 2024, the Euro Area economy is showing signs of deceleration. Growth is projected to edge up to decline to 0.8% in CY 2025 and then gather strength, reaching 1.2% in CY 2026.

(Source: https://www.imf.org/en/Publications/WEO/ lssues/2025/04/22/world-economic-outlook-april-2025)

Germany

The real GDP of the German economy in CY 2024 showed a growth rate of (0.2%). However, it is expected to see a rebound in CY 2025, with a projected growth rate of 0.00%. Looking ahead to CY 2026, the economy is anticipated to experience a stronger recovery, with an anticipated growth rate of 0.9%.

(Source: https://www.imf.org/en/Publications/WEO/ lssues/2025/04/22/world-economic-outlook-april-2025)

Outlook

Amid ongoing global economic challenges, the global economy outlook presents an opportunity to enhance resilience and support a more sustainable growth trajectory. The response of many economies under pressure suggests that recovery is possible through coordinated policies and targeted reforms.

Countries can contribute to a more balanced and inclusive recovery by working toward a stable and transparent trade environment, advancing debt resolution efforts, and addressing structural imbalances. Maintaining clear monetary policy direction, applying macroprudential tools when appropriate, and implementing credible fiscal plans may help support financial stability and long-term growth.

International cooperation is likely to play an important role in managing current uncertainties. Through coordinated strategies and collective action, the global economy may be able to regain momentum, rebuild buffers, and create conditions for broader economic opportunity across regions.

(Source: https://www.imf.org/en/Publications/WEO/ lssues/2025/04/22/world-economic-outlook-april-2025)

INDIAN ECONOMY

Indias economy in FY 2024-25 continued its robust growth trajectory, achieving an estimated 6.5% GDP expansion, driven by significant investments in infrastructure development and rising consumer aspirations. This projection emphasizes the nations ability to thrive economically, even amid global challenges, sustained by strong domestic fundamentals and thoughtful policy actions. The principal drivers of this growth include comprehensive reforms, rapid advancements in digital technology, and robust infrastructure expansion. Additionally, strategic government interventions, steady consumer spending, and an improving labor market all contribute to strengthening the nations economic path. The continued strength of agriculture and services sectors, along with stable private consumption and macroeconomic resilience, further assures Indias long-term growth.

The Indian Governments continued emphasis on infrastructure development has focused on key areas such as railways, highways, urban redevelopment, and water-sanitation initiatives. This sustained push for capital expenditure has not only improved connectivity but also ensured that more households gain access to basic amenities like electricity and water. Programs such as the Jal Jeevan Mission (JJM) and PM Gati Shakti Master Plan have played a transformative role in bridging the rural-urban divide, facilitating the conversion of Tier-II and Tier-III cities into semi-urban hubs of economic activity.

(Source: https://pib.gov.in/PressReleasePage.aspx?PRID=2098788#:~:text=The%20PM%20Gati%20Shakti%20National%20Master%20Plan,planning%20and%20coordinated%20execution%20of%20infrastructure%20projects.&text=Undeh%20Swachh%20Bharat%20Miss ion%20%E2%80%93%20Urban%202.0%2C,urban%20waste%20collection%20from%202014%2D15%20to%202024%2D25.)

The impact of infrastructure investment is increasingly visible at the grassroots level, where improved access to essential services has encouraged families to enhance their living conditions. Many households are now undertaking housing upgrades or new construction as part of a broader movement toward one-time beautification and long-term asset creation. This shift is supported by rising disposable incomes and a stable inflation environment, reflected in the Consumer Price Index holding at 3.3% in March 2025 which have collectively enhanced purchasing power. Over the past decade, steady growth in per capita income has elevated living standards, fueling a trend of premiumization across various consumption categories.

(Source: https://www.pib.gov.in/PressReleasePage. aspx?PRID=2121843)

Urbanization remains a cornerstone of Indias growth strategy, with initiatives like the Smart Cities Mission and Pradhan Mantri Awas Yojana (PMAY) fostering large-scale housing construction and urban infrastructure development. These programs have created employment opportunities while enhancing connectivity between urban centers and rural markets, thereby widening the consumer base for various industries. The Indian Governments focus on public-private partnerships (PPPs) has further accelerated project execution, thereby ensuring timely delivery of critical infrastructure while attracting private capital for sustainable growth.

(Source: https://www.ey.com/en_in/technical/alerts-
hub/2025/02/budget-2025-infrastructure-sector)

Indias infrastructure investments also serve as a catalyst for broader economic development. Every rupee spent generates over Rs 2.5-3.5 in GDP through employment creation and downstream demand for goods and services. This multiplier effect is expected to play a pivotal role in achieving Indias vision of becoming a USD 7 trillion economy by 2030.

(Source: https://www.businesstoday.in/bt-tv/video/indias-rs115-lakh-cr-infra-push-jyotiraditya-scindia-highlights-35x-gdp-multiplier-effect-457213-2024-12-13

https:ZZm.economictimes.com/opinion/et-commentary/india2030-double-its-gdp-to-7-trillion/articleshow/113370781.cms)

The strong economic outlook is further supported by strengthening consumption trends, particularly in the projected growth of both Private Final Consumption Expenditure (PFCE) and Government Final Consumption Expenditure (GFCE). From the viewpoint of overall demand, PFCE at constant prices is anticipated to rise by 7.6%, driven by a revival in rural consumption.

(Source: https://pib.gov.in/PressReleasePage. aspx?PRID=2097921

https://www.pib.gov.in/PressReleasePage.aspx?PRID=2106921)

Indias robust economic performance presents a crucial opportunity to implement reforms in key domains like taxation, power, urban development, mining, finance, and regulations. These reforms are essential for tapping into the nations growth potential, boosting global competitiveness, and steering India toward its goal of becoming a developed economy by 2047.

(Source: https://www.livemint.com/economy/imf-india-
economic-reforms-india-advanced-economy-2047-
article-iv-consultation-india-indian-fiscal-policy-imf-
rbi-11740718590665.html)

The Union Budget 2025-26

The Honourable Finance Minister, in the Union Budget 2025-26, introduced a progressive strategy designed to propel Indias economic growth, emphasizing agriculture, MSMEs, investments, and exports as the driving forces behind the Viksit Bharat @2047 vision. In the face of global economic challenges, India remains the fastest-growing major economy, with GDP growth expected at 6.2% in 2025 and 6.3% in 2026, as per IMF projections.

(Source: https://www.pib.gov.in/PressReleasePage. aspx?PRID=2123826)

Continuing its commitment to strengthening infrastructure, the Indian Government has allocated Rs 11.21 Lakh Crores for capital expenditure in FY 2025-26, amounting to 3.1% of GDP. This builds on the previous years Rs 11.11 Lakh Crores, ensuring continued growth in public investment. Alongside this, a new Asset Monetization Plan will tap into the value of public assets, while a planned three- year pipeline for Public-Private Partnership (PPP) projects aims to boost private sector engagement in key sectors.

(Source: https://www.pib.gov.in/PressReleaseIframePage. aspx?PRID=2098353)

The Budget seeks to propel Indias position in global trade by focusing on cost reduction, enhancing logistics, and expanding export markets. Targeted initiatives will aim to promote value-added exports, diversify trade connections, and streamline procedures under the Trade Infrastructure for Export Scheme (TIES), boosting Indias competitive edge. Further, revamping Free Trade Agreements (FTAs) will strengthen Indias reputation as a crucial trade hub in the global economy.

(Source: https://patimes.org/indias-2025-26-budget-strengthening-international-trade-boosting-exports-and-managing-imports/#:~:text=The%20Union%20Budget%202025%2D26,a%20leading%20export%2Ddriven%20economy.)

In a landmark move, the government has introduced substantial tax reforms aimed at easing the financial burden on middle- income earners. Those earning up to Rs 12 Lakh per year will now enjoy tax exemption under the new system. Furthermore, salaried individuals can benefit from an effective tax-free income of up to Rs 12.75 Lakh, with a Rs 75,000 standard deduction factored in. These initiatives are expected to boost disposable income, stimulate consumer spending, and drive economic momentum.

(Source: https://pib.gov.in/PressReleaseIframePage. aspx?PRID=2098353)

Outlook

The outlook for Indias economy remains optimistic, despite the backdrop of global uncertainties such as geopolitical tensions and trade disruptions. On the domestic front, the key to growth lies in consistent private sector investment, rising consumer confidence, and stronger corporate wages. Rural demand is set for recovery, supported by agricultural rebound, easing food inflation, and a stable macroeconomic environment. For sustainable, long-term growth, the nation must prioritize boosting its global competitiveness through structural reforms and deregulation from the grassroots level. By fostering a business-friendly environment, India will be better equipped to handle external risks and strengthen its economic resilience.

GLOBAL CERAMIC TILES INDUSTRY

The global ceramic tiles market, which was valued at USD 213.56 billion in 2024, is projected to see steady growth, reaching USD 228.94 billion in 2025 and hitting USD 399.28 billion by 2033. This growth, which represents a CAGR of 7.2% over the forecast period (2025-33), is largely fueled by the rapid pace of urbanization, increased infrastructure development, and a growing demand from consumers for both aesthetically attractive and durable materials. Advances in manufacturing technologies, particularly digital printing, have greatly enhanced design possibilities and product quality, while sustainability trends are encouraging the shift toward eco- friendly tile options.

As the global population continues to rise and more people flock to cities, market growth is inevitably propelled. According to the United Nations Population Division, the worlds population is projected to reach 9.5 billion by 2050, with urban areas representing approximately 66.4% of this number. This rapid urbanization is set to drive greater demand for top-tier flooring solutions, with evolving consumer preferences focusing on hygiene, comfort, and modern living spaces.

The ceramic tile market in the Asia-Pacific, driven by countries like India and China, is growing rapidly. By 2050, its expected that more than half of the worlds urban population will live in urban Asia, leading to the largest workforce ever seen. E-commerce is helping make ceramic tiles more accessible, further driving market growth. Even with challenges like changing raw material prices and competition from alternative flooring solutions, the ceramic tile industry worldwide is on track for steady growth.

(Source: https://straitsresearch.com/report/ceramic-tiles-
market)

Trends in Global Tile Sector

Shifting Consumer Preferences

Consumer preferences in the tile space are evolving with a distinct sense of sophistication. Larger tiles formats are winning favor for their ability to evoke seamless elegance, aligning with contemporary design ideals that favor simplicity and scale. Simultaneously, there is a rising allure in handcrafted, imperfect finishes—tiles that carry the tactile language of human touch, injecting personality, craftsmanship, and understated charm into otherwise sleek environments.

Construction Sector Growth

The construction industry is thriving, driven by an infrastructure boom in developing regions of Asia-Pacific,

Latin America, and Africa. Government programs aimed at fostering smart cities and eco-friendly housing are propelling construction in these areas. Meanwhile, the rise in renovation and rebuilding projects in established markets is generating a strong demand for durable ceramic tiles, reflecting a broader shift toward modernized, sustainable urban environments.

Functional Innovations

In response to the evolving needs of the market, the tile industry is innovating with new functional designs. Energy-efficient tiles, designed with built-in insulation or renewable energy capabilities, are growing in popularity for their ability to cut down on heating and cooling expenses. Simultaneously, the focus on safety is increasing, with anti-slip coatings now a staple in both homes and commercial spaces, making them safer and more user- friendly.

Technological Advancements

Technological progress continues to reshape the tile industry, bringing forth a wave of innovations that blend design with performance. The widespread adoption of vitrified tiles, known for their longevity and resistance to moisture, continues to shape purchasing preferences across residential and commercial sectors.

Sustainable Focus

As environmental concerns become a defining factor in consumer decision- making, the tile industry is stepping up with meaningful sustainability initiatives. From the incorporation of recycled materials and biodegradable components to the adoption of low-energy production methods, the sector is evolving to meet the moment. Circularity is also gaining momentum, with waste being repurposed into new tile products, turning byproducts into value. These shifts reflect more than regulatory compliance; they signal a deeper, industry-wide dedication to shaping a greener, more responsible future.

Indian Ceramic Tiles Industry

The Indian ceramic tiles industry valued at approximately Rs 52,500 Crores in 2024-25 is poised for steady growth. The imposition of a 41.0% anti-dumping duty on Indian ceramic tiles by GCC countries marked a critical inflection point for the industry. In CY 2024, further pressure mounted as the US tile manufacturers sought anti-dumping and countervailing duties on Indian ceramic tile imports, citing unfair trade practices such as dumping and government subsidies. The proposed tariffs, ranging from a staggering 408% to 828%, underscored the intensifying global scrutiny. Yet, this headwind catalysed a broader shift-compelling Indian manufacturers to recalibrate export strategies and unlock opportunities in alternative international markets. This adaptive pivot has translated into a stronger global presence, backed by robust domestic manufacturing, improved infrastructure, and a sharper focus on compliance with international standards. The industrys agility in the face of trade barriers signals long-term growth potential and strategic resilience.

(https://hitex.co.in/news/indias-ceramic-tile-market-poised-for-robust-growth.html

Source: https://www.mordorintelligence.com/industry-reports/ india-ceramic-tiles-market

https://www.ndtvprofit.com/business/indian-ceramic-tile-makers-wary-of-us-anti-dumping-duty-hitting-exports#:~:text=Details%20About%20The%20Petition,to%20flood%20the%20US%20market.)

In Indias ceramic tile industry, technology has truly taken center stage, with manufacturers making significant investments in cutting- edge production facilities. This embrace of modern technology allows companies to produce tiles with unmatched brightness, intricate textures, and heightened efficiency.

By bringing in automated systems, advanced computer networks, and specialized expertise, the industry has seen a dramatic boost in production, with daily capacities reaching new heights.

The advent of regulations such as the Real Estate Regulatory Authority (RERA) has played a critical role in the transformation of Indias real estate sector, shaping the demand for ceramic tiles. By ensuring greater transparency and streamlining processes, RERA has led to increased demand across residential and commercial construction. Manufacturers, in turn, have risen to the challenge, offering specialized products that address the specific needs of diverse construction projects, from flooring in homes to extensive commercial spaces, all while maintaining impeccable quality and adherence to regulatory standards.

As tastes and needs shift, the ceramic tile industry has embraced innovation with open arms. Manufacturers are responding to concerns around hygiene and functionality by offering groundbreaking products like anti- viral, anti-static, and germ-resistant forever tiles. At the same time, the rise of larger tiles and digital printing technology is opening a universe of possibilities for customized designs, giving consumers the chance to personalize their spaces like never before.

Global Sanitaryware and Bath Fittings Market

The sanitaryware industry is expanding quickly, with an estimated value of USD 57.28 billion by 2025, expected to rise to USD 79.93 billion by 2030, at a growth rate of 6.9%. This expansion is being fueled by urban growth, evolving consumer preferences, and an increased focus on sustainability. To meet these demands, manufacturers are focusing on water-saving products and greener production methods, all in line with global environmental goals.

Technology is quietly reshaping the way we interact with our bathrooms. Bath fittings that do not need touching, toilets that use less water, and surfaces that fight off germs-these are no longer luxuries, they are expectations. Particularly in commercial spaces, smart sanitaryware is becoming standard. At the same time, improved manufacturing techniques mean less waste and more value: instead of scrapping old products, some can now be restored without the heavy lifting of re-firing.

The global appetite for refined sanitaryware is growing, and much of it is being served by cranes and construction crews. Rapid infrastructure development, particularly in Asia, Africa, and Latin America, is powering demand—not just for basic fixtures, but for high-end, well-crafted designs. The hospitality sector is also playing its part, as luxury hotels and resorts seek out statement bath fittings to match their upscale promise.

The digital wave has redrawn the retail map, blurring the lines between online convenience and in-store experience. With consumers now expecting tailored products that look as good as they perform, brands are responding with design-led, tech-infused collections. Omnichannel strategies are no longer a luxury—they are a necessity, ensuring that every touchpoint, from scroll to showroom, feels seamless and intuitive.

(Source: https://www.mordorintelligence.com/industry-
reports/sanitaryware-market)

Indian Sanitaryware and Bath Fittings Market

Indias bathrooms are getting an upgrade. With urban living on the rise and people spending more on home comfort, the sanitaryware market is seeing strong demand for stylish, functional, and easy-to- maintain solutions that match todays needs.

As of CY 2024, the Indian sanitaryware industry is valued at approximately Rs 8,000 Crores. It broadly encompasses two main categories: ceramic and non-ceramic products. Ceramic sanitaryware - such as basins, commodes, and urinals - continues to dominate due to its affordability and everyday practicality. Meanwhile, non- ceramic alternatives like modern showers,and advanced plumbing fixtures are steadily gaining traction, prized for their durability and sophisticated design. This diverse product range is supported by an extensive distribution network, spanning local dealers to e-commerce platforms, ensuring wide accessibility. Complementing this ecosystem are skilled service professionals who provide reliable installation and maintenance, completing the value chain.

(Source: https://www.business-standard.com/budget/news/budget-2025-sanitaryware-players-seek-gst-rationalisation-on-products-125013000910_1.html)

With more people waking up to the importance of sanitation and the government pushing cleanliness into the national spotlight, the sanitaryware industry is thriving. Technology is keeping pace too— making products sleeker, smarter, and more efficient. Meanwhile, the boom in luxury hotels and modern real estate projects is pushing demand for top-tier fittings, keeping the growth curve steady and steep.

Indias bath fittings market is seeing strong growth, valued at USD 2.18 billion in 2024, expected to reach USD 2.35 billion by 2025 and continue to climb to USD 3.36 billion by 2030. This rise is driven by a growing demand for quality bathroom fittings as urbanization picks up pace and morepeople invest in their homes. Alongside new construction, there is a significant surge in replacement demand, as homeowners increasingly upgrade existing bathrooms for better aesthetics and functionality. India has become one of the top five markets globally for bathroom hardware, fueled by rapid construction and real estate development. Residential projects are leading the way, with manufacturers focusing on offering a wider range of products that meet the needs of homeowners and builders alike.

(Source: https://www.mordorintelligence.com/industry-
reports/india-faucet-market)

In addition, more and more people in India are gaining access to quality housing, which is directly boosting the demand for bath fittings. Cities with large populations are becoming key hubs for faucet sales, supported by an expanding network of retail stores and franchises. After the Covid-19 pandemic, rising disposable incomes and changing consumer tastes have fueled a greater demand for high-end bath fittings, as homeowners put more emphasis on both the style and practicality of their kitchens and

Indian Real Estate Market

The Indian real estate market is on track for significant growth, with projections indicating it will jump from USD 332.85 billion in 2025 to USD 985.80 billion by 2030, reflecting a solid growth rate of 24.3%. The year 2024 has already shown impressive momentum across residential, commercial, and luxury sectors. In the first three quarters, residential sales saw a 17.0% increase compared to the previous year, driven by rising buyer confidence and an escalating demand for premium properties.

(Source: https://www.mordorintelligence.com/industry-
reports/real-estate-industry-in-india)

The commercial real estate landscape remains dynamic, underpinned by persistent demand for office spaces. Leasing activities are rising steadily, spurred by encouraging market forecasts for co-working spaces and premium office developments. Urbanization trends suggest that by 2047, approximately 50% of Indias population will reside in urban areas, further driving the need for residential, office, and retail spaces across the country.

(Source: https://www.mordorintelligence.com/industry-
reports/real-estate-industry-in-india)

Consumer tastes are evolving faster than ever, pushing the retail industry to rethink its approach. Shoppers now expect more than just a transaction—they desire environments that offer convenience, tailored experiences, and fluid digital integration. Retailers are responding by integrating advanced technologies, such as seamless omnichannel shopping experiences, e-commerce platforms, and digital enhancements in brick- and-mortar stores. Meanwhile, sustainability is rising as a critical priority. Companies are prioritizing eco-friendly solutions and energy-efficient designs to meet the growing demand for responsible, environmentally- conscious retail spaces.

The Pradhan Mantri Awas Yojana Urban 2.0 is helping shape the future of affordable housing by focusing on the needs of economically weaker sections (EWS), low- income groups (LIG), and middle-income groups (MIG) in urban areas. With the backing of subsidies, robust public-private collaborations, and a focus on creating sustainable, energy-efficient homes, the initiative is turning the objective of ‘Housing for All into a reality.

As urbanization takes off, driven by advances in infrastructure and abundant job opportunities, the real estate sector is undergoing a transformation. While Tier-I cities remain the epicenter of growth, smaller towns and Tier-II and III cities are stepping into the limelight as emerging hotspots for real estate. Even the outer edges of established cities are witnessing a boom in development, signaling a fundamental shift in the real estate landscape across the country.

GROWTH DRIVERS FOR TILE AND BATH FITTINGS

Residential Sector —

Affordable Housing

The housing market is on a fast track to growth, and with it, the demand for top-notch tiles and bath fittings is rising in tandem. A major contributor to this growth is the afford- able housing segment, which is set to grow substantially, with demand reaching 31.2 million units by 2030, creating an opportu- nity worth USD 67 trillion. With the rise of new residential developments, the demand for high-quality, durable, and aesthetically pleasing tiles and bath fittings continues to grow, as homeowners seek to enhance both the function and style of their living spaces.

(Source: https://www.cii.in/PressreleasesDetail.aspx?enc=k- dhTxdytnjDPKndeQoS+fYib5t3MNz993ppnFCIxBVw=)

Renovation and Home Improvement

As homeowners look to the future, theres a growing investment in smart home technology, energy-efficient appliances, and eco-friendly materials that elevate both functionality and sustainability. This shift is also giving the tiles and bath fittings industry a significant boost. With the rising popularity of smart homes, theres a clear demand for sleek, modern designs that marry style with environmental consciousness. Premium tiles, known for their durability and sophisticated look, are becoming a must-have in these contemporary spaces. At the same time, water-saving sanitaryware and innovative bath fittings are increasingly in demand, further pushing the trend toward eco-conscious living.

Low per Capita Tiles Consumption

India, now the worlds second-largest producer and consumer of tiles after China, has plenty of room to grow in this space.

Yet, Indias per capita consumption of tiles remained relatively low at approximately 0.6 square meters (sqm), compared to 4.0 sqm in China, 3.4 sqm in Brazil, and a global aver- age of 1.4 sqm (in 2023). This gap signals a massive opportunity for growth in the Indian tile market. As disposable incomes climb and urbanization takes root, the demand for tiles is expected to rise steadily, setting the stage for industry expansion.

(Source: https://www.financialexpress.com/business/ industry-fundamental-analysis-ceramics-many-driv- ers-for-growth-3162207/)

Commercial Sector

Urbanization and Real Estate Development

With urban centers expanding and residential housing projects multiplying, theres a rising demand for tiles and bath fittings. Cities such as Mumbai, Bengaluru, and Pune are seeing more modern apartments spring up, each requiring top-tier bathroom accessories. The real estate sector currently contributes 7.3% to Indias GDP, and projections show that by 2047, it will increase to a significant 15.5%, representing a market worth USD 5.8 trillion.

(Source: https://www.rprealtyplus.com/interviews/role-of- real-estate-in-indias-economic-growth-118904.html)

Hospitality Industry Growth

The Indian hospitality industry is on track for significant growth, with the market projected to reach USD 281.83 billion by 2025 and expand at a CAGR of 14.0%, reaching USD 541.70 billion by 2030. This expansion offers a major opportunity for the tiles, sanitaryware and bath fittings industry. As new hotels, resorts, and luxury accommodations are built to meet increasing demand, there will be a heightened need for high-quality, durable, and visually appealing tiles and bath fittings. Additionally, the renovation and upgrading of existing properties to meet changing consumer expectations will further fuel demand. Premium, aesthetically pleasing bath fittings will play a key role in creating luxurious, modern spaces that attract guests. As a result, the strong growth of the hospitality sector is expected to directly drive the tiles and bath fittings market forward.

(Source: https://www.mordorintelligence.com/industry-reports/hospitality-industry-in-india#:~:text=India%20Hospitality%20Market%20Research%20FAQs&text=The%20Hospitality%20Industry%20In%20India%20Market%20size%20is%20expected%20to,Industry%20In%20India%20Market%20size%3F)

Technological Integration

Indias bathroom fittings and tiles market is seeing a shift with the introduction of innovative materials and smart technologies. Manufacturers are adapting to meet rising consumer expectations and stricter regulations, particularly around water conservation. Eco-friendly, water- saving products are in demand, and smart features like touchless bathroom fittings and temperature-controlled showers are becoming more popular. As digital shopping platforms gain traction, consumers now have a wealth of product options at their fingertips, simplifying their decision-making and enhancing their shopping experience.

Financial Factors

Rising Disposable Income

With the middle class experiencing a rise in disposable income, fueled by the Union Budget 2025s tax breaks, the demand for home renovations is about to reach new heights. As households find themselves with more financial breathing room, the desire to upgrade living spaces will translate into increased consumption of high-quality tiles and bath fittings. As homeowners invest in products that are both durable and stylish, the tiles and bath fittings industry is set to experience substantial growth, meeting the evolving demand for homes that are both beautiful and functional

Demographical Trends

Urban Migration

Urbanization in India is picking up pace, with a significant portion of the urban population now consisting of migrants. The primary catalysts for this movement are better employment prospects and marriage, with women leading the charge in migration. This shift presents a valuable opportunity for the tiles and bath fittings market. As urban areas grow and accommodate an influx of residents, the need for housing and infrastructure is expanding. With the rise of new housing projects, urban development, and renovations, the demand for top-quality, modern, and aesthetic tiles, sanitaryware and bath fittings is expected to increase substantially.

Middle-Class

Expansion

By 2047, Indias middle-class is expected to swell to over a billion people, presenting an invaluable opportunity for the tiles, sanitaryware and bath fittings industry. As this demographic expands, so does the aspiration for enhanced living conditions and modernized interiors. Homeowners are investing in premium, aesthetically pleasing, and durable tiles, sanitaryware and bath fittings to improve both the look and function of their spaces. This rapid growth in the middle-class will be a powerful force propelling the demand for tiles and bath fittings in the future.

Population Growth

As Indias population continues to climb, currently sitting at 1.46 billion and expected to hit 1.7 billion by the mid-2060s, its shaping a powerful shift in the tiles and bath fittings sector. With urban areas rapidly growing, housing needs on the rise, and a growing thirst for beautifully crafted, modern interiors, the demand for well-designed bathrooms is only intensifying. This trend points to a thriv- ing future for the industry, with a steady pace of growth that mirrors the countrys growing population.

(Source: https://www.worldometers.info/world-population/ india-population/)

Popularity among Generation Z

The aesthetics sensibilities of Gen Z are redefining interior spaces—and by extension, steering the trajectory of the tiles, sanitaryware and bath fittings industry. With an eye for detail and a penchant for customization, this cohort values decor that mirrors personal identity, while maintaining their functionality. As their presence in the real estate market increases, so does the demand for high-grade, innovation-driven bathroom solutions. Social platforms, which serve as both inspiration boards and validation spaces, further accelerate this evolution—indicating a sustained uptick in market demand.

Lifestyle Trends

Sustainability

Sustainability is no longer a peripheral concern—its a central force reshaping the tiles, sanitaryware and bath fittings industry. With growing environmental consciousness, consumers now expect more from spaces they inhabit. They are opting for tiles made from recycled materials, water-conserving fixtures, and manufacturing practices that tread lightly on the planet. Additionally, businesses who lead with sustainable innovation are increasingly capturing the attention of an environmentally aware customer base. Backed by policymakers and urban planners championing green construction, the shift toward sustainable product range is gaining speed. Its a momentum that promises not just immediate traction, but long-term opportunity for those ready to adapt.

Preference for Modern Designs

A growing appreciation for sleek, modern design, where form meets function in perfect harmony—is reshaping the tiles and bath fittings industry. With consumers placing greater value on minimalist sophistication and durability, theres a clean move toward that enhance both aesthetics and performance. The bathroom, once a utilitarian space, has now emerged as a personal sanctuary, a reflection of style and well-being. This transformation, underpinned by urban sprawl, rising disposable incomes, and the influx of global design inspiration, signals a promising future for the industry marked by innovation and aspirational living.

Government initiatives

Housing Schemes

Indias push for affordable housing, through schemes like the Pradhan Mantri Awas Yojana (PMAY), Affordable Rental Housing Complexes (ARHCs), and the MHADA lottery, is giving a huge boost to the tiles and bath fittings industry. These programs are focused on providing millions with quality homes, leading to a big increase in the construction of new housing. As these homes are built or renovated, the demand for things like tiles, sanitaryware and bath fittings naturally rises. With the governments focus on offering modern, dignified living spaces, theres more emphasis on high-quality, stylish finishes, which is driving the adoption of sleek, durable tiles and trendy bath fittings. This ongoing growth in affordable housing ensures the industry will keep thriving.

Sanitation Drives

Indias sanitation efforts, led by initiatives like the Swachh Bharat Mission, have brought hygiene and cleanliness into sharp national focus, especially across underserved urban and rural regions. These programs have enabled the construction of millions of toilets and community sanitation facilities, resulting in a steady and growing demand for tiles and bath fittings.

As sanitation remains a core focus area for the government, the market for affordable, durable, and easy-to-clean bathroom solutions is expected to grow steadily.

The continued emphasis on modern sanitation facilities in both public places and households places the industry on a firm path toward long-term growth.

Opportunities

The tiles and bathware industry is on track to thrive in the upcoming year, driven by a confluence of positive factors. The easing of supply chain challenges is resulting in reduced freight costs and better profit margins. Coupled with the drop in natural gas prices, manufacturers are enjoying lower production costs, enhancing product competitiveness. Government-backed initiatives are further propelling this growth, with increased capital expenditure on infrastructure projects attracting private investments and supporting sector expansion. Simultaneously, the growing consumer demand for sustainable, eco- friendly materials is opening up new growth avenues. Cutting-edge technologies such as 3D printing are driving manufacturing innovation and improving production efficiency. Indias accelerating urbanization is intensifying the demand for residential and commercial buildings, thus increasing the need for high-quality building materials. Furthermore, the Indian Governments commitment to affordable housing projects is set to accelerate the demand for tiles and bathware. When combined, these factors—technological advancements, urban expansion, sustainability awareness, supportive policies, and digital transformation—point to a prosperous future for Indias building material industry in 2025-26.

Threats

The building materials sector is struggling with a host of challenges that are impacting production costs and project timelines.

Rising raw material and energy costs have driven up manufacturing costs, while persistent labor shortages continue to disrupt operations. Furthermore, ongoing supply chain issues have exacerbated delays, making it difficult to complete projects on schedule. High interest rates are also having a detrimental effect, slowing both residential and commercial construction activity. The financial pressure is weighing on consumers, leading to the postponement of many remodeling projects. Additionally, domestic manufacturers are under pressure from low-cost imports, particularly from China and Vietnam, making it increasingly difficult to compete on price. On top of these challenges, stricter environmental regulations and the growing demand for sustainable production practices are adding operational hurdles, compelling businesses to rethink their processes and invest in greener alternatives.

Yet, despite these obstacles, there is a glimmer of hope. Increased public infrastructure investments and slowly improving economic conditions suggest that the sector may experience a recovery in the years to come, bringing a sense of optimism for the future.

COMPANY OVERVIEW

Somany Ceramics Limited (referred to as ‘Somany or ‘the Company) continues to strengthen its stature as a global leader in ceramic tiles, sanitaryware, and bath fittings. Revered for its commitment to innovation and premium-quality solutions, the Company serves both residential and commercial markets with a wide selection of ceramic and vitrified tiles, as well as sanitaryware and bath solutions. With a discerning eye on emerging design idioms and consumer inclinations, the Company crafts versatile textures, shapes, and sizes that lend a contemporary cadence to everyday spaces.

In line with its profitability and efficiency agenda, Somany has exited two joint ventures that no longer served its strategic direction. This move will help improve profitability and streamline sourcing through efficient regional supply networks. Continued strides in product innovation have led to the launch of new models, further strengthening Somanys identity as a design-forward brand. Additionally, with a growing stake in adjacent categories, the Company is expanding into new business avenues to drive long-term growth and maintain its industry edge. Moreover, with healthy margins and a sharp focus on financial prudence, the Company channels capital into segments with strong growth potential.

STANDALONE FINANCIAL OVERVIEW

In 2024-25, the Company recorded a revenue from operations of Rs 2,56,942 Lakhs, reflecting a growth of 1.4% over the previous years figure of Rs 2,53,448 Lakhs. Other income stood at Rs 2,471 Lakhs, contributing 1.0% to the total revenues, indicating Somanys strategic alignment with its principal business activities.

The Companys total expenses increased by 2.9% from Rs 2,41,976 Lakhs in 2023-24 to Rs 2,49,088 Lakhs in 2024-25, highlighting the Companys growth trajectory. Material costs, including the purchase of traded goods, accounted for 66.2% of the Companys revenues and saw an increase of 6.0%, rising from Rs 1,62,043 Lakhs in 2023-24 to Rs 1,71,728 Lakhs in 2024-25.

In 2024-25, Somanys employee expenses, which made up 10.1% of revenue, increased by 8.1%, moving from Rs 24,239 Lakhs in 2023-24 to Rs 26,198 Lakhs in 2024-25. However, the Companys power and fuel costs decreased by 14.8%, from Rs 24,128 Lakhs in 2023-24 to Rs 20,557 Lakhs in 2024-25.

Analysis of the Balance Sheet

Sources of Funds

As of the year ending on 31 March, 2025, Somanys capital employed increased from Rs 76,230 Lakhs in 2023-24 to Rs 84,141 Lakhs in 2024-25. This Companys net worth, which also increased from Rs 72,317 Lakhs to Rs 80,028 Lakhs during the same period. At the close of fiscal year, the Company had 4,10,09,605 equity shares of Rs 2/- each.

In addition, the Company has long-term debt of Rs 915 Lakhs, representing long-term debt- equity ratio of 0.01 as on 31 March, 2025. Somany also saw a reduction in finance costs by 2.8%, from Rs 777 Lakhs to Rs 756 Lakhs in FY 2024-25.

Applications of Funds

The Companys gross block, including CWIP, rose by 8.2% from Rs 69,153 Lakhs as of 31 March, 2024, to Rs 74,841 Lakhs as of 31 March, 2025, primarily on account of investment in production capabilities. Depreciation and amortization also increased by 13.9%, up from Rs 4,663 Lakhs in 2023-24 to Rs 5,312 Lakhs in 2024-25. The long term loans & advances made by the company decreased by 0.1% from Rs 5,353 Lakhs as of 31 March, 2024 to Rs 5,346 Lakhs in FY 2024-25.

Investments

The Companys non-current investments grew from Rs 30,716 Lakhs as of 31 March, 2024 to Rs 32,558 Lakhs as of 31 March, 2025, primarily driven by investment in subsidiaries.

Working Capital Management

As of 31 March, 2025, the Companys current assets increased by 8.6% to Rs 65,753 Lakhs from Rs 60,573 Lakhs in the previous year. Further, the inventory levels of the Company, which include raw materials, work-in-progress, and finished goods, decreased by 0.5% from Rs 19,177 Lakhs to Rs 19,089 Lakhs in 2024-25. The inventory turnover cycle decreased to 27 days in 2024-25 from 28 days in 2023-24. However, the Companys debtors turnover cycle increased from 45 days to 51 days, with a total of Rs 35,628 Lakhs in 2024-25 compared to Rs 31,056 Lakhs in 2023-24. On the other hand, the loans and advances made by the Company decreased from Rs 135 Lakhs as of 31 March, 2024 to NIL as of 31 March, 2025.

Margins

The Companys EBITDA margin decreased by 130 basis points, from 6.7% in 2023-24 to 5.4% in 2024-25. Similarly, the net profit margin also decreased by 80 basis points, falling from 4.1 % in 2023-24 to 3.3% in 2024-25.

Key Numbers

Particulars	2024-25	2023-24
	51	45
	27	28
	14.66	19.38
	1.09	1.01
	5.4	6.7
	0.02	0.02
	3.3	4.1
	11.2	13.8
	195.15	176.37
	20.89	24.64

CONSOLIDATED FINANCIAL OVERVIEW

In 2024-25, Somany recorded a revenue from operations growth of 2.6%, reaching Rs 2,65,877 Lakhs, up from Rs 2,59,135 Lakhs in 2023-24. Other income stood at Rs 902 Lakhs, contributing 0.3% to the overall revenue mix- further underlining the Companys strategic focus on strengthening its principal lines of business.

The Companys total expenses increased by 5.0% from Rs 2,45,711 Lakhs in 2023-24 to Rs 2,58,057 Lakhs in 2024-25, which was aligned with the Companys growth. Material costs (including purchases of traded goods) which constituted 48.9% of the Companys revenues, increased by 14.0% from Rs 1,14,185 Lakhs in 2023-24 to Rs 1,30,135 Lakhs in 2024-25. The Companys employees expenses, accounting for 13.3% of the revenues, increased by 9.4% from Rs 32,437 Lakhs in 2023-24 to Rs 35,474 Lakhs in 2024-25. Additionally, the Companys power and fuel costs reduced by 3.8% from Rs 52,187 Lakhs in 2023- 24 to Rs 50,225 Lakhs in 2024-25.

Analysis of the Balance Sheet

Sources of Funds

As of year, ending on 31 March, 2025, the Companys capital employed decreased from Rs 1,19,693 Lakhs in 2023-24 to Rs 1,17,193 Lakhs in 2024- 25. Additionally, the Companys net worth increased from Rs 72,014 Lakhs to Rs 77,166 Lakhs in the same period.

The Companys long-term debt decreased marginally by 20% to Rs 14,899 Lakhs on 31 March, 2025. The long-term debt-equity ratio reached 0.19x in 2024-25. Additionally, the Companys finance cost increased by 12.9%, from Rs 4,646 Lakhs to Rs 5,243 Lakhs in 2024-25.

Applications of Funds

As of 31 March 2025, the Companys gross block, inclusive of CWIP, decreased by 0.9% to Rs 1,45,025 Lakhs, compared to Rs 1,46,352 Lakhs a year earlier primarily on account of divestment of subsidiaries. Depreciation and amortization saw an upward movement, rising 24.5% year-on-year from Rs 7,251 Lakhs to Rs 9,026 Lakhs mainly because of full year depreciation on the new greenfield plant which was commissioned in January 2024. The loans & advances made by the Company increased from Nil as of 31 March, 2024 to Rs 389 Lakhs in FY 2024-25.

Working Capital Management

As of 31 March, 2025, the Companys current assets increased by 3.0% to Rs 84,570 Lakhs, up from Rs 82,145 Lakhs in the previous year.

Further, the Companys inventory, comprising raw materials, work-in-progress, and finished goods, decreased by 2.5% from Rs 34,658 Lakhs to Rs 33,786 Lakhs in 2024-25. The inventory turnover cycle reduced to 47 days in 2024-25 from 49 days in 2023-24. However, the Companys debtors turnover cycle increased from 48 days to 51 days, with a total of Rs 36,882 Lakhs in 2024-25 compared to Rs 33,722 Lakhs in 2023-24.

Margins

A continued focus on operational excellence helped us to contain the margin impact. The EBITDA margin reduced by 140 basis points to 8.4% in 2024-25, down from 9.8% in the previous year. Net profit margins followed suit, registering a reduction of 150 basis points to reach 2.3%, compared to 3.8% in 2023-24.

Key Numbers

Particulars	FY 2024-25	FY 2023-24 1
Debtors Cycle (Days)	51	48
Inventory Cycle (Days)	47	49
Interest Coverage Ratio (x)	2.66	4.12
Current Ratio (x)	1.01	0.98
EBITDA/Turnover (%)	8.4	9.8
Debt-Equity Ratio (x)	0.39	0.47
Net Profit Margin (%)	2.3	3.8
Return on Net Worth (%)	8.1	12.9
Book Value per Share (f)	188.17	175.63
Earnings per Share (f)	14.65	23.00

Human Resources

Somany has consistently strived to provide an immersive and enriching experience for its employees. The Companys vision of becoming the Best Employer in the Industry has driven it to new heights and earned it the prestigious Great Place to Work? certification. This milestone reflects Somanys unwavering commitment to excellence and its focus on continuous improvement in all aspects of the employee experience.

The Company introduced multiple initiatives during the year to enhance employee experience, engagement, and well- being. Open communication was fostered through monthly Focus Group Discussions, quarterly Town Halls with leadership, and multiple Employee Experience Surveys.

The onboarding process was revamped with interactive sessions and a Buddy Program to support new joiners. Engagement activities flourished with festive celebrations, personalized gestures like birthday and anniversary cards, and Appreciation Week. Innovation & Recognition initiatives included the launch of ‘The Idea Factory and Best Employee Awards across units. Learning and development efforts focused on comprehensive product training and executive leadership coaching. Wellness programs expanded with partnerships for healthcare services, lifestyle discounts, emotional and financial support schemes, and fitness initiatives like yoga and marathons. These collective efforts reflect a strong commitment to building a supportive, inclusive, and high-performing workplace.

As of 31 March, 2025, the Company had 2,000 employees on its payroll.

Audit Discipline

Somany has put in place a comprehensive and future-ready risk management model, underpinned by a sound system of internal controls. This quietly affirms the Companys culture of excellence and its thoughtful, anticipatory style of governance.

Driving this robust framework is a team of seasoned experts—an Internal Audit Committee composed of respected Independent Directors. Their role goes beyond oversight; they work with transparency and foresight, identifying risks and presenting key findings to the Board each quarter. This rhythm of accountability enables informed decisions and supports the business as it navigates an ever-evolving world.

Supporting its vigilant governance, Somany orchestrates regular leadership sessions where seasoned executives align on forecasting risks and formulating pre-emptive strategies. This cadence not only fosters agility and compliance but also strengthens the Companys ability to adapt swiftly to market complexities.

Somany treats risk not as a constraint but as a lens for better decision-making. Ethical governance, transparency, and trust lie at the foundation of its operations, empowering it to respond with foresight and lead with confidence. This values-led culture allows the Company to navigate uncertainty while building enduring relationships with stakeholders.

Cautionary Statement

The section comprises statements that indicate the Companys aims, projections, expectations, and estimations. These statements may be considered ‘forward-looking according to securities laws and regulations, and there is a possibility that the actual results may differ significantly from what is expressed or implied. Various factors such as economic conditions affecting supply and demand, fluctuations in raw material costs, alterations in Government rules and tax laws, economic developments, and other unanticipated factors could severely affect the Companys operations.