CERA - Cera Sanitary.

📊 NSE: CERA 🏢 Ceramics - Tiles / Sanitaryware 📅 Last Updated: 12/13/2025 20:50

💰 Financial Performance

Revenue Growth by Segment

In Q2 FY26, Sanitaryware (47% of revenue) grew 1.4% YoY, Tiles (11% of revenue) grew 3.1% YoY, and Wellness (2% of revenue) grew 3.2% YoY. Faucetware (40% of revenue) declined 3.5% YoY due to a high base effect from previous price increases.

Geographic Revenue Split

The company maintains a diversified domestic presence across South, East, North, and West India, providing adequate geographical diversity to mitigate regional demand fluctuations.

Profitability Margins

Gross margins are stable between 52% and 55%. Net profit margin for FY25 was 12.5%, a slight improvement from 12.4% in FY24, despite market challenges.

EBITDA Margin

EBITDA margin was 17.9% in FY25 compared to 18.4% in FY24, a decline of 50 bps attributed to increased sales discounts and competitive intensity in the retail segment.

Capital Expenditure

Planned capex for FY26 is INR 23 Cr for routine maintenance and retail footprint expansion. A major greenfield expansion for sanitaryware, revised to INR 150 Cr from INR 130 Cr, has been deferred pending market demand revival.

Credit Rating & Borrowing

Long-term bank facilities of INR 56 Cr are rated CARE AA; Stable. Short-term facilities of INR 44 Cr are rated CARE A1+. Interest coverage ratio remains robust at 44.23x as of FY25.

⚙️ Operational Drivers

Raw Materials

Natural gas is a primary utility cost, representing 3.6% of total revenue. Other inputs include materials for sanitaryware and faucetware manufacturing, though specific chemical/metal % splits are not disclosed.

Import Sources

Gas is sourced domestically from Gujarat (Sabarmati) and through national pipelines (GAIL).

Key Suppliers

Key energy suppliers include GAIL (providing 80% of gas consumption) and Sabarmati Gas (providing 20% of gas consumption).

Capacity Expansion

Current manufacturing is a mix of in-house production and outsourcing. The proposed greenfield expansion to increase sanitaryware capacity is currently on hold with a 18-24 month gestation period once resumed.

Raw Material Costs

Raw material costs are managed through a balanced sourcing strategy. Gas costs stood at 3.6% of revenue in Q2 FY26, reflecting operational efficiency in energy procurement.

Manufacturing Efficiency

Efficiency is supported by a mix of manufacturing and outsourcing. The rollout of a 'Dealer Management System' (DMS) aims to improve supply chain agility and execution.

Logistics & Distribution

The company operates a vast distribution network across India. Trade receivables turnover was 9.58x in FY25, with a debtor cycle of 38 days.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth is targeted through premiumization of the product portfolio, expanding the retail footprint, and leveraging the B2B/Project segment (39% of Q2 FY26 revenue) to offset retail softness. The company is also implementing a Dealer Management System (DMS) to enhance market readiness.

Products & Services

Sanitaryware (washbasins, water closets), Faucetware (taps, showers), Tiles, and Wellness products (bathtubs, partitions).

Brand Portfolio

CERA

New Products/Services

Continuous addition of new Stock Keeping Units (SKUs) and a focus on value-added products manufactured exclusively in-house to drive premiumization.

Market Expansion

Expansion of retail footprint and strengthening brand presence in metro markets where luxury and premium segments are growing.

Market Share & Ranking

Cera maintains a leading position in the domestic sanitaryware industry, particularly strong in the retail and mass-premium segments.

Strategic Alliances

Joint Ventures include Packcart Packaging LLP and Race Polymer Arts LLP, with Cera holding a 51% majority stake in each.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward luxury and premium segments in metros. While the mass-premium segment is stagnant, Cera is positioning itself to capture the eventual upward turn in the demand cycle.

Competitive Landscape

Intense competition from both organized players and fragmented unorganized segments in the mass-premium market.

Competitive Moat

Sustainable moat through a 40-year brand legacy ('CERA'), a robust distribution network, and a debt-free balance sheet with INR 736 Cr in cash surplus.

Macro Economic Sensitivity

Highly sensitive to real estate construction cycles and urban discretionary spending. Sluggishness in the residential market has led to stagnated revenue between INR 1,800 Cr and INR 1,900 Cr.

Consumer Behavior

Shift toward premiumization and 'wellness' products at home, though current retail demand remains soft due to macro-economic factors.

Geopolitical Risks

Potential impact on raw material supply chains, though domestic sourcing of gas (GAIL/Sabarmati) provides some insulation.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with POSH Act (Internal Complaint Committee sessions held in Dec 2024 and March 2025) and SEBI Listing Obligations.

Environmental Compliance

The company has implemented a Business Responsibility and Sustainability Report (BRSR) and focuses on environment, health, and safety (EHS) standards.

Taxation Policy Impact

Not specifically disclosed, but the company adheres to Indian Accounting Standards (Ind AS 34).

Legal Contingencies

No pending applications under the Insolvency and Bankruptcy Code (IBC) 2016. No material regulatory or court orders passed against the company in FY25.

⚠️ Risk Analysis

Key Uncertainties

Prolonged sluggishness in retail demand and real estate projects could lead to further revenue stagnation (currently in the INR 1,800-1,900 Cr range).