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Prabhudas Lilladher Report
We met with the management of Cera Sanitaryware Ltd. to assess the demand, competition, pricing, and capacity expansion. Management continues to observe a slowdown in demand in the near term and is expected to review its revenue guidance of Rs 25 billion/Rs 29 billion by March 2025/September 2025 with ~16% plus Ebitda margin, following the conclusion of FY24.
We also believe demand scenario will continue to remain subdued in the near term, while Cera expected some improvement with recent capacity expansion in faucetware division in FY25.
We estimate revenue/ Ebitda/profit after tax compound annual growth rate of 18.2%/22.3%/20.9% over FY24-26E.
We maintain ‘Accumulate' rating, as we value the stock at 35 times Dec-25 earnings per share to arrive at target price of Rs 8,486.
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