Somany Ceramics hit the 20% LC at Rs.228.80 within minutes of opening as one of its borrowers has defaulted on its payment and this has could have repercussions on its earnings.
The company said that a cheque of more than Rs 26 crore issued in its favour by Mentor Financial Services Pvt. Ltd. has bounced owing to insufficient funds. The company issued demand notices for repayment to Mentor Financial Services, its directors and its authorised signatory as per requirements of the applicable law. And in view of continued default by Mentor Financial Services, its directors and its authorised signatory, Somany Ceramics has now filed a criminal complaint Bahadugard, Haryana, Police Station.
Borkerages coving the stock have said that failure to recover this money will mean provisioning Somany Ceramics earnings in current fiscal and that will impact the bottomline to that extent.
ICICI Securities has reduced its earning estimates by 28% and 20% FY20 and FY21, respectively and revised its target price sharply from Rs.500 to Rs.300.