Cera Sanitary.

Cera Sanitaryware reported a 5.4% year-on-year increase in revenue from operations, reaching ₹419 crore in Q1 FY26, compared to ₹398 crore in Q1 FY25. Profit after tax remained stable at ₹47 crore. However, the EBITDA margin saw a slight contraction to 16.4% from 17.5% in the prior year, primarily due to inflation-driven cost increases and initial expenses associated with new brand launches. Working capital metrics also showed an increase YoY, with inventory days rising from 75 to 80 and receivables from 32 to 38 days.

The Faucetware segment was the strongest performer, recording a 13.4% YoY growth to ₹161.85 crore, supported by an expanded SKU portfolio. In contrast, the Sanitaryware segment's revenue remained largely flat at ₹208.67 crore, reflecting continued soft demand. The Tiles and Wellness segments also contributed positively with 5% and 14.6% YoY growth, respectively. From a product positioning perspective, 43% of sales came from the premium category, 35% from mid-segment, and 22% from entry-level products.

The B2B segment continued its growth trajectory, increasing its contribution to total revenues to 38% in Q1 FY26, up from 36% in Q1 FY25. This growth is attributed to healthy order inflows from the real estate sector, driven by increased construction activity and improved developer sentiment. The company's project bank, representing orders won, registered a significant 32% YoY growth in Q1 FY26, indicating strong visibility for future sales translation.

CERA is advancing its strategy for the premium 'Senator' brand, which now boasts expanded portfolios and a dedicated sales team. The target is to operationalize 45-50 exclusive Senator stores by FY26 end, with showroom displays upgraded to 650-800 sq ft. In parallel, the company successfully launched 'POLIPLUZ,' a new value brand targeting aspirational households in tier 4 cities and rural areas. POLIPLUZ is expected to achieve a topline of ₹25-30 crore in the current year and 5-7% of total turnover in three years, with an attractive EBITDA margin of 24-25%.

Management acknowledged the continued softness in consumer demand and increased competitive discounting in the market due to industry overcapacity. Despite these challenges, CERA stated it has maintained its volumes and margins, avoiding market share loss. The company remains optimistic about long-term industry prospects, supported by structural drivers and anticipates a market recovery in the second half of FY26, projecting a full-year FY26 revenue growth in the higher single-digit to double-digit range.

As of June 30, 2025, CERA held ₹778 crore in cash and cash equivalents. The total Capex outlay for FY26 is planned at ₹23 crore, allocated for routine maintenance, brand building, and retail footprint expansion. Expected annual staff costs for the new Senator and POLIPLUZ brands are projected to be ₹13-15 crore, with an additional ₹11-12 crore allocated for Senator and Luxe publicity from next year, out of a typical annual publicity budget of ₹60 crore.