Cera Sanitaryware Q3 Results Review - Disappointing Results, Challenges Persist: IDBI Capital

IDBI Capital Report

Cera Sanitaryware Ltd.’s Q3 FY24 result was below our estimates on key parameters. Subdued demand and challenges in key markets weighed on net sales, while incremental advertising cost dented margins.

With strategic objectives focused on expanding market share and enhancing the business-to-consumer segment, the company refrained from implementing price hikes since May, 2022 with price adjustments for sanitaryware increase of 2% and no price hikes in faucetware division.

Sanitaryware and faucetware divisions, which contributed 52% and 36% to Q3 FY24 revenue, witnessed a decrease of 8% and increase of 5% respectively. Given subdued demand and cost pressure, we expect earnings to be muted in near term.

We introduce FY26E and maintain Hold with a revised target price of Rs 8,003 (earlier Rs 8,333), assigning 37 times price earnings ratio on FY26E.

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