Cera Sanitary.

Cera Sanitaryware reported Q2 FY26 revenue from operations at INR 488 crore, a marginal decline from INR 490 crore in Q2 FY25. EBITDA (without other income) stood at INR 67 crore, down from INR 70 crore YoY, resulting in a margin compression from 14.2% to 13.8% primarily due to increased input costs. Profit after tax was INR 57 crore, lower than INR 68 crore in the prior year, which included a one-time^📎 deferred tax income. EPS for the quarter was INR 43.92.

In Q2 FY26, Sanitaryware contributed 47% to revenue, growing 1.4% YoY, while Faucetware accounted for 40% but saw a 3.5% YoY decline due to a high base effect from prior year's price increases. Tiles and Wellness segments grew 3.1% and 3.2% respectively. Project sales remained a strong pillar, contributing 39% to the topline, driven by steady order inflows from the real estate sector. For H1 FY26, net revenues increased by 2.2% to INR 907 crore.

The retail demand environment remained subdued in Q2 FY26, though the pace of contraction in the Sanitaryware segment moderated. Management expressed cautious optimism for H2 FY26, citing positive macroeconomic factors such as stable interest rates, steady GDP growth, increased government spending on housing and infrastructure, and the recent rollout of GST 2.0. They anticipate H2 growth of 10-12%, leading to a full-year growth of 7-8%.

Cera is strengthening its strategic foundation through brand segmentation and channel strategies. The rollout of a Dealer Management System (DMS) has onboarded approximately 200 dealers, enhancing data visibility. New premium brand Senator aims for 45-50 stores by FY26 (28 operational), while deep-value brand Polipluz is expanding its network to 38 distributors and 650 dealers, targeting 100 distributors and 2,000 dealers by March 2026. These new brands are projected to contribute INR 40-45 crore to turnover by FY26 and approximately INR 150 crore by FY27.

The company has earmarked a capex outlay of approximately INR 23 crore for FY26, primarily for routine maintenance, brand presence, and retail footprint expansion. During the quarter, Cera divested two LLPs, Race Polymer Arts LLP and Packcart Packaging LLP, for a total consideration of INR 18.75 crore, realizing a profit of INR 5.54 crore which was included in Q2 other income. Management emphasized ongoing cost optimization programs and operational efficiencies, particularly in publicity spend and plant operations (reducing rejections), to mitigate input cost pressures.

EBITDA margin declined to 13.8% in Q2 FY26 from 14.2% YoY, mainly due to increased input costs, particularly a sharp rise in brass prices to INR 620-630/kg. Gas costs, however, saw a slight decrease. Despite the cost pressures, management aims to maintain operating margins in the 14.5-15% range for the full year, banking on improved volumes in H2 and continued cost efficiencies. No immediate price hikes are planned, but a decision may be considered if brass prices continue to rise.