12-05-2025
Cera Sanitaryware Ltd (BOM:532443) Q4 FY25 Earnings Call Highlights: Strong Revenue Growth Amid ...
Revenue: INR578 crores in Q4 FY25, a year-on-year growth of 5.7%.
EBITDA: INR121 crores with margins at 20.4% in Q4 FY25.
Faucetware Revenue Growth: 9.6% year-on-year increase.
Sanitaryware Revenue Contribution: 48% of total revenues in Q4 FY25.
Faucetware Revenue Contribution: 40% of total revenues in Q4 FY25.
Profit After Tax: INR86 crores, a 14.1% increase from INR75 crores in Q4 FY24.
EPS: INR66.36 in Q4 FY25, up from INR57.9 in Q4 FY24.
Net Revenue for FY25: INR1,915 crores, a 2.4% increase from INR1,871 crores in FY24.
Cash and Cash Equivalents: INR719 crores as of March 31, 2025.
CapEx for FY25: INR22.84 crores.
New Store Launches: Over 342 new stores launched in FY25.
Working Capital Days: Increased from 60 days to 80 days in Q4 FY25.
Release Date: May 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Cera Sanitaryware Ltd (BOM:532443) reported a year-on-year revenue growth of 5.7% in Q4 FY25, reaching INR578 crores.
The company achieved an EBITDA margin improvement to 20.4%, driven by effective cost management and operational efficiency.
The Faucetware segment saw a robust year-on-year growth of 9.6%, supported by resilient demand and a wider range of SKUs.
Cera expanded its retail footprint significantly, launching over 342 new stores and expanding its Cera Experience Centers across multiple cities.
The company launched approximately 431 new SKUs and established a dedicated design center to drive innovation in product categories.
The operating environment in Q4 remained subdued with continued softness in consumer demand across end markets.
Sanitaryware segment revenues decreased by 1.6% year-on-year, reflecting sluggish demand in this category.
Working capital days increased from 60 to 80 days, primarily due to changes in credit policy and increased receivable days.
Gas prices increased during the quarter, impacting cost structures, although the company managed to keep the weighted average cost below the industry average.
The company faced pricing pressure due to oversupply and overcapacity in the market, leading to increased discounting.
Q: Can you elaborate on the margin improvement and its sustainability? A: Vikas Kothari, CFO: The margin improvement in Q4 was due to operational efficiency and cost management, with a 1.5% increase driven by a 0.10% improvement in gross margin, 0.5% savings in publicity, and 0.9% cost-effective measures. We expect margins to remain within the 15% to 16% range.
Q: What caused the increase in working capital, particularly receivables? A: Deepak Chaudhary, VP, Finance and Investor Relations: The increase in receivables is not due to project business but a change in the cash credit policy, reducing cash discount sales from 74% to 67%. Receivable days have already decreased from 44 to 38 days by April.
Q: Why has there been a persistent slowness in demand, and is it more prevalent in any specific segment? A: Devrishi Singh, Investor Relations: The slowness is mainly in the retail sector, while project sales have increased. The sluggishness is more pronounced in the Sanitaryware segment compared to Faucetware, where we have seen growth due to our smaller market share.
Q: Can you provide insights into the Tiles business and its margins? A: Vikas Kothari, CFO: Tiles contribute 10% of our revenue and are fully outsourced. The focus is on providing a complete solution to consumers. Margins in the Tiles business are lower than in Sanitaryware and Faucetware, typically in single digits.
Q: What is the company's strategy regarding export opportunities? A: Deepak Chaudhary, VP, Finance and Investor Relations: Exports currently constitute a small portion of our revenue. While there is potential due to tariff situations, we do not expect significant growth in exports in the near term.
Q: How does the company plan to achieve its revenue target of INR2,900 crores by FY27? A: Vikas Kothari, CFO: The target depends on market conditions improving. Despite subdued demand, our project pipeline is strong, and we aim to outperform the market by 6% to 7% once retail momentum improves.
Q: What are the reasons for the slower volume growth in the industry despite steady real estate cycles? A: Deepak Chaudhary, VP, Finance and Investor Relations: The industry faces pricing pressure due to oversupply and overcapacity. We have balanced this with efficiency and cost management. We expect project business to translate into higher numbers in FY26.
Q: How is the company addressing the premiumization strategy with brands like CERA Luxe and Senator? A: Vikas Kothari, CFO: We are focusing on premiumization with CERA Luxe and Senator, aiming for them to contribute 10% of revenue in the next three years. This includes a mix of in-house manufacturing and outsourcing, with dedicated teams and flagship stores to enhance market presence.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
