In a note, JM Financial analyst Dharmesh Shah said organised players are better positioned due to higher inventory (45 to 60 days versus 18 to 20 days for unorganised units), opining that the ongoing disruption could even lead to the permanent closure of 5 to 6% of plants. He further sees phased price hikes of Rs 25 to Rs 85 per sqm (7 to 15%) for GVT and PVT tiles by organised players as gas accounts for 20 to 25% of production costs.
“The US Iran Israel conflict has disrupted fuel supply in Morbi, forcing shutdowns at 90 to 95 out of 700 to 725 tile plants amid propane shortages and potential cessation of Gujarat Gas supply after March 15. Fuel switching offers limited short term flexibility as controlled shutdown and restart takes two to three days and kiln modifications for alternatives such as RLNG could take at least a month,” the note said.
Moreover, export outlook remains weak as 35 to 40% of Morbi shipments go to the Middle East, where trade flows are currently disrupted, the note added.
JM’s recommendations on Kajaria, Somany and Cera
Kajaria Ceramics
Kajaria Ceramics, the largest listed player by market capitalisation (Rs 14,929 crore), is a top pick for this brokerage with a Buy recommendation. The target of Rs 1,125 implies a 17% upside over Rs 958, the price at which the stock was recommended.
The stock is currently trading at Rs 939.90, down 2% from Wednesday’s closing price.
Kajaria shares have declined 24% in the past six months while maintaining a 5% uptick over a one year period. Also Read | JioBlackRock Flexi Cap Fund adds Swiggy, Gujarat Gas; exits Mahanagar Gas and 18 others
Somany Ceramics
JM has an Add rating on Somany, a company with a market capitalisation of Rs 1,552 crore. Its stock has declined 20% over a six month period while sliding 9% in a year.
The stock offers an 18% potential upside, JM said, estimating the target price at Rs 435. It is currently trading at Rs 378 and was recommended at a price of Rs 370.
As the war entered its 13th day, a likely truce remains out of sight in the near term.
Somany earlier informed the exchanges that it received a communication from GAIL (India) stating that its plant in Bahadurgarh, Haryana will receive restricted gas supply according to the revised supply regulations issued by the Ministry of Petroleum and Natural Gas on March 9.
The gas supplies to industrial consumers will be maintained at 80% of the past six months’ average gas consumption and any overdrawal will be invoiced as per the applicable contractual terms and conditions, with effect from March 12, the exchange filing said.
“This may have a partial impact on the Company’s production activities at the plant. The Company is actively evaluating the situation and taking necessary measures to minimise the impact. Considering the Company’s existing inventory levels, supplies are continuing in the normal course of business,” the filing said.
Cera Sanitaryware
JM remains least bullish on Cera among its peers, assigning a Reduce rating with a target of Rs 5,200, which is a 12% upside over Rs 4,652, at which the stock was recommended. Its shares are currently trading around Rs 4,685.
Cera has been the biggest laggard in the pack, falling 26% in the past six months while witnessing an 11% correction over a one year period.
Nifty is down nearly 5% in the past six months while the BSE Sensex has corrected 6% in the same period.
Cera has also informed the exchanges about receiving a communication from Sabarmati Gas regarding provisional restrictions on gas supply up to 50% of the Daily Contracted Quantity (DCQ) with effect from March 6, 2026 till further notice.
“This disruption may have a temporary and partial impact on the company’s production activities,” the filing said.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)