Somany Ceramics Ltd

Dear Stakeholders,

I hope this message finds you in good health and high spirits. It is with great pleasure and pride that I address you today to share the achievements of Somany Ceramics during 2023-24. I am immensely grateful to all our colleagues, customers, and stakeholders for their support, especially during the challenging times that have tested the Company.

The growth of Somany Ceramics has been particularly satisfying because it transpired in two difficult years. It showcases the untiring efforts of the entire team, who put their best foot forward in growing the business under some of the most trying circumstances. The Company continued doing what it has always done - investing in capacities and capabilities. This has ensured enduring success for Somany Ceramics time and again. By taking small steps toward many milestones, Somany turned obstacles into opportunities that propelled its progress. By strategically navigating the challenges, the Company has managed to convert the obstacles it encountered the previous year. The Company is now focussing on Embracing the Future by progressing and pioneering in the ceramics industry.

The India Story

Somany Ceramics' enthusiasm is grounded in India, a country that has become a worldwide case study for its resilience and spirit to resurge against all odds. The country remains enticing with its promising talent pool, strong domestic market, resilient supply chains, and the spirit of self-reliance. It also aims to become an ideal manufacturing destination for the world. Global enterprises are revising their strategic plans to include India, believing that the country will be a crucial lever driving their progress. Some have already set foot on Indian soil.

The real estate sector will be a crucial beneficiary of India's resurgence to the global stage. India's premium commercial and residential real estate landscape will entice global and local investors. This will encourage business growth and increase productivity. As businesses expand and succeed, this will be a multiplier for the country's economy. Already experiencing heightened activity in Tier 2 and 3 towns, the next decade will likely see a strong rise in demand for all building materials. The Indian ceramic industry is on track to become the world's largest ceramic producer in the coming years. It has already established itself as a significant global player in the ceramic tile market, ranking second only to China in terms of manufacturing, consumption, and export. This growth is also being propelled by India's increasing urbanization and construction activity, which has led to a surge in demand for various types of tiles, especially glazed vitrified tiles.

People's aspirations have soared alongside their growing disposable incomes. They no longer want to spend energy shopping for tiles; they just want an appealing look. This shift is driving the demand for large-sized, value-added tiles and a preference for organized players. I believe Somany will play a more significant role in the advancement of the tile sector, as regulatory norms are creating a more level playing field. This evolution ensures that the Company develops strategies to make tile purchasing increasingly convenient.

Somany Ceramics stands strong among these dynamics on its path of expansion. The Company's determination and ambition allows it to effectively cater to an even larger customer base across the country. Somany Ceramics is well-positioned for future growth backed by the expected doubling of the Indian tile industry in the next 5-7 years. The growth is driven by rising disposable incomes, increasing replacement demand, government push for infrastructure development, and a surge in demand for aesthetically pleasing and functional spaces.

Somany Max Coverstone • Collection

Launched in 2023-24

The Company plans to take advantage of the 'China +1' strategy in developed markets to enhance its market position and growth prospects.

In addition to expanding globally, Somany Ceramics is focused on enhancing its production capabilities domestically by strengthening its supply chain, and meeting the evolving demands of its customers. By establishing a strong presence in Tier 2 and 3, and smaller cities across India, it aims to tap into new markets and serve a wider customer base. Additionally, the Company's commitment to customer centricity and technological upgradation ensures that it stays ahead of the competition, delivers innovative solutions, and meets the expectations of the modern Indian consumer.

Aligned with this motto, the Company is focusing on expanding its product portfolio, providing innovative solutions that cater to the specific needs of each target group, further solidifying its position as the go-to brand for ceramic tiles, bathware, and allied products.

With limitless possibilities, Coverstone enhances spaces with luxurious surfaces. Additionally, Somany Ceramics has proudly also unveiled its latest bathware range, the French Collection by Somany. Designed with imperial French suave, this ultra-luxuriant collection not only embodies the 50- year legacy of Somany Ceramics but also places consumers in the choicest group of art connoisseurs.

The Company's R&D efforts not only enhance its internal processes but also contribute to the broader objective of sustainable development within the industry. Somany Ceramics remains committed to leveraging technology to drive growth and delivering superior value to customers, stakeholders, and the environment.

Embracing Sustainability

Sustainability is a core value driving every aspect of Somany Ceramics' business strategy. The Company recognizes the crucial role of sustainable practices in preserving the environment for future generations while also ensuring its long-term success. Sustainability is deeply embedded in the Company's management philosophy, guiding decisions on raw material sourcing, manufacturing processes, and product innovation. It is committed to reducing its carbon footprint, conserving natural resources, and minimizing waste generation. By prioritizing sustainability, Somany Ceramics not only contributes to a healthier planet but also enhances its brand reputation, attracts environmentally conscious customers, and strengthens the resilience and longevity of its business.

The Company has entered into a strategic investment of Rs.376.20 Lakhs in equity shares of Clean Max Ananta Private Limited, a special purpose vehicle. This initiative aligns with the provisions of the Electricity Act, 2003, and underscores Somany's commitment to sustainable energy practices by procuring solar power from a captive generating plant in the state of Haryana. This investment, subject to applicable laws, represents a significant step towards enhancing the Company's environmental stewardship and reducing its carbon footprint.

Looking ahead, the Company anticipates a positive shift in the domestic demand landscape next year. This optimism is fueled by the lag effect of new construction, where tiles are typically applied in the finishing stages. Furthermore, Somany Ceramics expects the real estate industry to grow at a higher pace in the foreseeable future, which will contribute favorably to the domestic market environment. Besides this, exports should continue to augur well, benefiting the Indian tile industry.

In conclusion, Somany Ceramics is excited about the potential for growth and development that lies ahead for the Company and India as a whole. The Company continues to be ambitious in its pursuit of growth. It is proud to express the resilience and commitment of its employees and partners, who have been integral to its successful journey. On behalf of Somany Ceramics Limited, I would like to thank you all for your continued support.

With my best wishes,

Chairman & Managing Director