Cera Sanitaryware Ltd., a leading player in India’s bathroom solutions market, reported a mixed performance for Q3 FY25. While revenue saw a modest rise, profitability remained under pressure due to margin contraction.
The company’s revenue for the quarter stood at INR 4,493 million, marking a 2.9% year-over-year increase. However, EBITDA remained flat at INR 594 million, and PAT fell by 9.8% to INR 459 million. This translated into a diluted EPS of INR 35.56, down from INR 39.12 in the same quarter last year. Margins also weakened, with the EBITDA margin declining by 40 basis points to 13.2% and the PAT margin shrinking by 150 basis points to 10.2%.
For the nine-month period of FY25, revenue growth remained subdued at 1%, while EBITDA and PAT declined by 8.5% and 1.9%, respectively. The results reflect cost pressures and competitive challenges in the sanitaryware industry.
Commenting on the performance, Chairman & Managing Director Vikram Somany acknowledged the macroeconomic challenges and sluggish demand environment. However, he emphasized the company’s ability to maintain operational resilience.
Cera’s sanitaryware and faucetware divisions contributed 50% and 37% of total revenues, respectively. While retail demand remained slow, the B2B segment gained traction. The company is also expanding its footprint in the luxury segment through its Senator and Luxe brands.
To strengthen its product offerings, Cera launched 158 new SKUs under its Senator brand and 104 new SKUs under the CERA brand in Q3 FY25. Looking ahead, Mr. Somany expects improved consumption trends and infrastructure investments to support demand recovery, aided by government initiatives in the Union Budget.
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While Cera Sanitaryware remains a strong industry player, investors must assess its valuation before making investment decisions. According to InvestingPro’s Fair Value feature, the stock’s fair value is estimated at INR 5,838.4 per share, indicating an 8.1% downside potential from the current market price of INR 6,351.8.
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