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Systematix Report
Cera Sanitaryware Ltd. Q1 was soft (revenue/Ebitda/profit after tax down 7%/18%/16% YoY; 14.5% Ebitda margin) as elections and heatwaves impacted demand in all categories and markets.
Lower volume and higher discounts impacted margins and profit after tax. Capacity utilization in sanitaryware stood at 76% and 84% in faucet ware.
However, Cera Sanitaryware sees initial signs of improving demand for the project which should reflect in business-to-consumer in one-two quarters. Margins would also improve with a rise in sales.
Despite softness in the near term, the company has maintained its guidance of 16% revenue compound annual growth rate over four years with Ebitda margin ranging 15-17%. Of the cash pile up of Rs 8.6 billion, a Rs 1.3 billion will be utilized for the buyback (at Rs 12,000 /share).
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