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Check Before You Invest : Cera Sanitaryware Ltd

BSE: 532443 NSE: CERA ISIN: INE739E01017
  |   Sector:  Construction & Infrastructure   |   Industry:  Ceramics/Marble/Granite/Sanitaryware

Snapshot

Q.1 Which industry/sub-sector does Cera Sanitaryware Ltd belong to?
Cera Sanitaryware Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Ceramics/Marble/Granite/Sanitaryware segment.
Q.2 Is Cera Sanitaryware Ltd a good quality company?
Cera Sanitaryware Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Cera Sanitaryware Ltd undervalued or overvalued?
Cera Sanitaryware Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 36.53 40.76
Price to Book 5.07 6.84
Price to Sales 3.64 4.63
EV to EBITDA 23.02 26.36
Q.4 Is Cera Sanitaryware Ltd a good buy now?
Cera Sanitaryware Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd revenue growth is 2.4% for FY-2025, which is below its 5-year CAGR of 9.63%, indicating slower growth.

Q.2 Gross Profit margin of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.4% for FY-2025, which is in line with its 5-year median of 15%, indicating stable margins.

Q.3 Operating Profit Margin of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.3% for FY-2025, which is in line with its 5-year median of 15.3% indicating stable margins.

Q.4 Net Profit Margin of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Net Profit Margin is 12.87% for FY-2025, is above its 5-year median of 11.63%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 15.4 15
Operating Profit Margin (%) 15.3 15.3
Net Profit Margin (%) 12.87 11.63

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Return on Asset is 13.45%, which is in line with its 5-year historical median of 13.45%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Return on capital employed is 22.99% for FY-2025, which is in line with its 5-year historical median of 22.99%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Return on equity is 18.33% for FY-2025, which is in line with its 5-year historical median of 18.33%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Cash conversion cycle is 58 days, above its 5-year historical median of 47 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.23 1.25
ROE (%) 18.33 18.33
ROCE (%) 22.99 22.99
Cash Conversion Cycle 58 days 47 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Debt-to-Equity ratio is 0.01, which is lower the industry average of 0.32, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Cera Sanitaryware Ltd?
Cera Sanitaryware Ltd Debt to cash flow from operations is 0.13, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Cera Sanitaryware Ltd?

Q.1 Promoter shareholding and pledge status of Cera Sanitaryware Ltd?
Promoters hold 54.41% of the Cera Sanitaryware Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Cera Sanitaryware Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Cera Sanitaryware Ltd vs industry peers?
Cera Sanitaryware Ltd revenue CAGR is 9.63%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 2.4 0
Gross Profit Growth (%) -1.1 9
Operating Profit Growth (%) 3.9 1.1
Net Profit Growth (%) 2.9 15.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.23 0.55
ROE (%) 18.33 2.33
ROCE (%) 22.99 5.52
Cash Conversion Cycle (days) 58.31 187

Valuation & price assessment

Q.1 Stock return of Cera Sanitaryware Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 11.3% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
11.3% 8% -8.2% -9.5%
Q.2 Valuation ratios of Cera Sanitaryware Ltd vs historical?
The current P/E ratio of 36.53 is lower than its historical median of 40.76, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 36.53 40.76 24.16
Price to Book 5.07 6.84 0.90
Price to Sales 3.64 4.63 1.28
EV to EBITDA 23.02 26.36 10.79

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