Cera Sanitaryware Ltd: India’s Porcelain Powerhouse or Just a Fancy Flush?


1. At a Glance

With an ROCE of 22%, debt-free status, and a stock that once touched ₹11,500, Cera is the silent warrior of India’s bathroom revolution. But has the brand maxed out its premium mojo, or is there more ceramic gold under that glaze?


2. Introduction with Hook

Imagine walking into a luxurious 5-star hotel bathroom. Chrome-finished faucets, elegant tiles, mood lighting, and there it is—your throne: a pristine CERA toilet. You sit down and suddenly… boom, you own the stock.

  • Current Price: ₹6,922 (down ~40% from its all-time high)
  • FY25 PAT: ₹246 Cr (up 4x from FY14 levels)
  • Dividend Payout: 34%, clean cash flows, almost no debt

Yet, in FY25, topline grew just 2%. Is this a pause or the start of porcelain fatigue?


3. Business Model (WTF Do They Even Do?)

Cera manufactures and trades building products—mostly sanitaryware, faucets, tiles, wellness (bathtubs, shower panels), kitchen sinks, mirrors.

It operates across three major brands:

  • CERA: Core value and volume-driven
  • Senator: Premium sanitaryware, faucetware
  • CERA Luxe: Luxury bath space targeting high-end consumers

It sells through a pan-India dealer network of 16,000+ retailers and also exports to 40+ countries. Bonus: It runs wind and solar plants in Gujarat for captive power.


4. Financials Overview

Profit & Loss Snapshot (₹ Cr):

FYSalesNet ProfitOPMROEEPS (₹)
FY201,20911614%19%89
FY221,44214915%19%115
FY241,87123916%18%184
FY251,91524615%18%190

Key Trends:

  • Sales CAGR (10Y): 9%
  • PAT CAGR (10Y): 14%
  • ROCE consistently >20%
  • Operating margins steady around 15%

But FY25 growth was muted. Base effect? Or sector-wide slowdown?


5. Valuation

Fair Value (FV) Range:

  • P/E-Based: 30x–38x FY26E EPS of ₹210 = ₹6,300 to ₹7,980
  • DCF-based conservative range: ₹6,000–₹7,200
  • EV/EBITDA Range: 18x–20x FY26E EBITDA = ₹6,800–₹8,000

EduInvesting Verdict™ FV Range:
₹6,300–₹8,000

Current price of ₹6,922 sits right in the mid-range, but lacks momentum catalysts.


6. What’s Cooking – News, Triggers, Drama

  • Buyback Bonanza: August 2024—buyback of 1,08,333 shares at ₹12,000/share = ~₹130 Cr deployed.
  • Leadership Shuffle: Multiple resignations in 2024 (Executive & Independent Directors). Execution risk?
  • ESOP 2024 Launch: Aligns key management with shareholder value.
  • Capex Watch: No major asset additions since FY24—flat fixed assets.

Where’s the next growth lever?


7. Balance Sheet

Balance Sheet FY25 (₹ Cr):

ParticularsFY25
Equity Capital6
Reserves1,344
Borrowings63
Total Liabilities1,841
Fixed Assets380
Investments702
Other Assets749

Key Points:

  • Net debt < ₹0
  • 38% of balance sheet in investments = safety cushion
  • Book value per share = ₹1,038

8. Cash Flow – Sab Number Game Hai

YearCFOCFICFFNet Flow
FY2298-70-21+7
FY23156-101-59-3
FY24228-140-80+8
FY25116+128-258-14

Takeaways:

  • Operating cash remains strong, ~10–12% of revenue
  • FY25 CFI inflow due to liquidation of investments
  • FY25 CFF outflow due to aggressive buyback

9. Ratios – Sexy or Stressy?

RatioFY25
ROCE22%
ROE18%
OPM15%
P/E36.5
D/E~0
Cash Conversion137 Days

TL;DR:
Sexy margins, zero debt, but CCC creeping up. Inventory days high at 163.


10. P&L Breakdown – Show Me the Money

YearSalesEBITDAPATEPS
FY221,442221149115
FY231,803293210161
FY241,871295239184
FY251,915293246190

Margins are mature. Any PAT growth now comes from cost control or scale.


11. Peer Comparison

CompanyCMP (₹)M.Cap (Cr)P/EOPMROCEPAT Growth
Cera6,9229,0023615%22%3% YoY
Hindware Home2712,2675%3%Loss YoY
Ganga Bath Fit30.4681925%28%Low base

Verdict: Cera is the only consistent performer in the space.


12. Miscellaneous – Shareholding, Promoters

Shareholder TypeMar 2025
Promoters54.41%
FIIs20.58%
DIIs6.93%
Public18.06%
  • FII holding rose from 18% (2023) to 22.89% (Sep 2024), now down to 20.58%
  • Public shareholding increasing = retail entering
  • Buyback & ESOPs indicate confidence, but execution risk post resignations

13. EduInvesting Verdict™

Cera Sanitaryware is the HDFC Bank of Bathrooms—steady, boring, cash-spewing, and elite in brand positioning. But FY25’s growth slowdown raises one smelly question:

Has growth clogged the pipeline?

The business fundamentals remain squeaky clean:

  • No debt
  • 22% ROCE
  • 34% dividend payout
  • Globally diversified base
  • OPMs stable for over a decade

But premium valuations demand premium growth—which Cera didn’t deliver in FY25.

Expectations for FY26:

  • A rebound to ₹2,100–2,200 Cr revenue
  • EPS > ₹210
  • Valuation re-rating if demand picks up in real estate or infra push from GOI

Until then, investors may enjoy the dividends while watching tiles dry.


Metadata
– Written by EduInvesting Research | 19 July 2025
– Tags: Cera Sanitaryware, Bathware Stocks, Consumer Durables, Fundamental Analysis, ROCE Kings, Buyback Stocks

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