Company Update : Cera Sanitaryware Ltd by Motilal Oswal Financial Services Ltd
Decent revenue, weak margins
* Revenue grew 11% YoY, driven by 18.2% growth in faucetware (40% of the revenue mix) and 6.4% growth in sanitaryware (48% of the mix).
* Elevated brass prices and inadequate price hikes continue to hurt gross margin and thus EBITDA margin (10.2%, down 299bps YoY, 353bps QoQ)
* Extraordinary items of INR185m were on account of provisions for the new labor code.
* Consequently, reported PAT slid 48% YoY and adj. PAT dipped 8% YoY.
* Project-led business (38% revenue mix) remained a key support pillar.
* The retail segment has started showing early signs of improvement across both faucetware and sanitaryware.
* Evaluating calibrated price hikes in the coming months to protect margins.
* Both the Senator and Polipluz brands remain in a focused build-out phase.
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SEBI Registration number is INH000000412
