Cera Sanitary.

Cera Sanitaryware reported a 2.9% year-on-year revenue growth, reaching ₹449 crores in Q3 FY25, up from ₹437 crores in Q3 FY24. However, EBITDA (excluding other income) remained flat at ₹59 crores YoY, with EBITDA margins (excluding other income) at 13.2%, a 40 basis points decline from 13.6% in Q3 FY24. Profit after tax decreased by 9.9% to ₹46 crores, compared to ₹51 crores in the prior year, reflecting challenges in demand and increased operating expenses.

In Q3 FY25, Sanitaryware and Faucetware segments contributed 50% and 37% of revenues, respectively, with Faucetware growing 6% year-on-year. Tiles and Wellness segments also saw growth of 5% and 24% respectively. The company's sales mix comprised 44% from the premium category, 34% from mid-category, and 22% from the entry-level category. The B2B segment continued to gain momentum, contributing 35% of Q3 FY25 revenues, a shift from historical 70:30 retail-to-project ratio.

Cera is strengthening its presence in the luxury segment with Senator and Cera Luxe brands. The company aims to establish 20 to 25 exclusive Senator stores by the end of FY25, scaling up to 75 stores by FY26. Luxe products are planned to be showcased in over 100 existing stores by the end of next year. Product development efforts resulted in 158 new SKUs for Senator and 104 new SKUs for CERA in Q3 FY25.

Market conditions remained challenging in Q3 FY25, with demand not picking up as expected, particularly in the retail segment. Management noted that while early signs of demand improvement were seen, persistent headwinds suppressed growth. Despite this, the company anticipates closing FY25 with lower single-digit growth, revising down from earlier high single-digit expectations. The Union Budget's positive measures and RBI's interest rate relaxation are expected to stimulate demand in the building materials industry over time.

The company maintained high capacity utilization rates, with Faucetware at 91% and Sanitaryware at 90%, ensuring readiness for future demand. Gas prices remained favorable, with the weighted average cost at ₹33.53 per cubic meter, significantly below the industry average. Advertising and marketing spend for the quarter was ₹14 crores, down from ₹22 crores in Q3 FY24. The company is also focusing on cost optimization, including logistics and labor costs, and leveraging its flexible outsourcing model to manage production efficiently.

Working capital days increased from 60 to 76 days in Q3 FY25. Inventory days rose from 79 to 85, primarily due to maintaining production levels to balance plant utilization despite weaker demand. Receivable days increased from 27 to 33, attributed to a change in the cash discount policy, which reduced cash discounts but increased receivables. Payable days decreased from 46 to 42, due to a shift towards MSME suppliers requiring faster payments.