Cera Sanitaryware Limited — Q4 FY26 earnings call

Call held 9 May 2026

Management summary

Cera Sanitaryware reported a mixed Q4 FY26, with revenue growing 11.41% YoY to ₹644 crores driven by strong faucetware and sanitaryware sales. However, profitability was impacted by elevated input costs and higher trade discounts, leading to a 310 bps decline in EBITDA margin to 15.2% and a 10.46% drop in PAT. The company is optimistic about sustained retail demand recovery and has implemented price revisions to mitigate cost pressures, while also expanding its new brands and faucetware capacity.

Highlights

  • Revenue from operations for Q4 FY26 stood at ₹644 crores, an 11.41% YoY growth compared to ₹578 crores in Q4 FY25.

  • Faucetware revenue grew significantly by 24.3% YoY, and Sanitaryware revenue grew by 10.7% YoY.

  • Retail demand showed encouraging recovery, sustaining through Q4 and into April 2026.

  • New brands Senator and Polipluz generated ₹19 crores in FY26, with a target to reach ₹70-80 crores in FY27.

  • Company maintained a healthy cash and cash equivalents balance of ₹853 crores as of March 31, 2026.

Concerns

  • EBITDA declined 7.54% YoY to ₹98 crores, with EBITDA margins compressing by 310 bps to 15.2% in Q4 FY26.

  • Profit after tax (PAT) decreased 10.46% YoY to ₹77 crores, and EPS fell 9.64% YoY to ₹59.96.

  • Gross margins were impacted by elevated brass input costs (up 29% YoY) and continued high trade discounts.

  • Tiles segment revenue declined by 8.3% YoY and is expected to be impacted in Q1 FY27 due to outsourcing dependency and Morbi disruptions.

Key financials

  1. Revenue ₹644 Cr +11.4%YoY
  2. EBITDA ₹98 Cr -7.5%YoY
  3. EBITDA Margin 15.2%
  4. PAT ₹77 Cr -10.5%YoY
  5. EPS ₹59.96 -9.6%YoY

What they filed

Q1 FY27: revenue up 19.4%, net profit down 4.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue490 449 578 407 488 −0%499 +11%624 +8%486 +19%
EBITDA70 59 106 53 67 −4%51 −14%98 −8%49 −8%
Net profit68 46 86 47 57 −16%24 −48%77 −10%45 −4%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenue ContributionYoY Growth
Sanitaryware46%10.7%
Faucetware43%24.3%
Tiles9%-8.3%
Wellness2%31.2%

Capital allocation

high confidence
  • Capex ₹45 Cr
    • Normal capex ₹25 Cr
    • Faucetware expansion ₹5 Cr
    • Acquisition of office space ₹15 Cr
    In this particular year, we are anticipating a total capex of something like INR 45 crore. This includes normal capex of roughly INR 25 crore which will typically do on a year-on-year basis, roughly INR 5 crore is there for the faucetware expansion, I am talking about within this INR 30 crore, there is INR 5 crore for faucetware expansion. And also, another INR 15 crore has been budgeted for acquisition of some more office space which we are planning to acquire in the current financial year. That will be in the range of INR 15 crore. So, total capex taking everything together, the routine, the faucetware expansion of INR 5 crore, and this office space acquisition of something like INR 15 crore, would be in the region of INR 43.42 crore.
  • Dividend ₹75/share (final)
    So, this time, we have given a healthy dividend, declared a healthy dividend payout, which is now INR 75 per share, almost 1,500% of the face value.
  • Liquidity Cash ₹853 Cr
    As of 31st March '26, our cash and cash equivalents stood at INR 853 crore.

Guidance & targets

Revenue

  • Overall Revenue Growth Revenue · FY27 · High confidence 18-20%
    So, with the demand trend continuing to grow upward, we expect the overall growth of around 18% to 20% next year.

    — Vikas Kothari

  • Sanitaryware Revenue Growth Revenue · FY27 · High confidence 12%
    in sanitaryware segment, we expect 12% growth driven by favourable volume impact of 7% and price impact of 5% to 6%

    — Vikas Kothari

  • Faucetware Revenue Growth Revenue · FY27 · High confidence 18%
    in case of faucetware, we expect a growth of 18% which is going to be driven by favourable volume impact of 10% to 12% and price impact of 8%.

    — Vikas Kothari

  • Senator Brand Revenue Revenue · FY27 · High confidence 40-45 crores

    Previously 10.5 crores → 40-45 crores

    for FY27, we are projecting that Senator should be able to generate roughly INR 40-45 crore

    — Deepak Chaudhary

  • Polipluz Brand Revenue Revenue · FY27 · High confidence 30-35 crores

    Previously 8.5 crores → 30-35 crores

    the Polipluz would be in the range of INR 30 to INR 35 crore.

    — Deepak Chaudhary

Volume

  • Faucetware Volume Growth Volume · FY27 · High confidence 10-12%
    faucetware should continue to grow at 10% to 12% in volumes

    — Deepak Chaudhary

  • Sanitaryware Volume Growth Volume · FY27 · High confidence 7-8%
    sanitaryware should be in the range of, you can say, 7% to 8% in FY27 also.

    — Deepak Chaudhary

Margin

  • EBITDA Margin Margin · Ongoing · Medium confidence 14-15%
    we will be able to sustain the EBITDA margins at around 14% to 15%.

    — Vikas Kothari

Distribution

  • Polipluz Distributors Distribution · FY27 · High confidence 200

    Previously 102 → 200

    we intend to take it up to 200 distributors and 2,000 dealers in the next financial year.

    — Deepak Chaudhary

  • Polipluz Dealers Distribution · FY27 · High confidence 2000

    Previously 1120 → 2000

    — Deepak Chaudhary

  • Senator Flagship Stores Distribution · FY27 · High confidence 60

    Previously 40 → 60

    are targeting to scale this up to 60 stores by next financial year.

    — Deepak Chaudhary

Capex

  • Total Capex Capex · FY27 · High confidence 45 crores
    In this particular year, we are anticipating a total capex of something like INR 45 crore.

    — Vikas Kothari

Marketing

  • Marketing & Publicity Spend Marketing · FY27 · Medium confidence Increase from 49 crores

    Previously 49 crores → Increase from 49 crores

    our marketing and publicity spends stood approximately at INR 49 crore, and we expect this to increase in FY27 as we step up our brand-building initiatives across key channels.

    — Deepak Chaudhary

  • Senator Publicity Spend Marketing · FY27 · High confidence 10-12 crores
    for the next year, we expect that INR 10 to INR 12 crore would be going in for the Senator publicity etc.

    — Deepak Chaudhary

Employee Costs

  • Employee Expenses Growth Employee Costs · Ongoing · Medium confidence 10%
    we expect that the employee expenses should increase in the range of 10% on the basis of normal wage hikes and the incremental salary increases that are normally there.

    — Deepak Chaudhary

What to watch in Q1 FY27

Retail Demand Recovery & Growth

next quarter
Current Encouraging recovery in Q4 FY26, continued in April 2026
Target Sustained growth in retail segment in Q1 FY27

Why it matters

Retail demand is a key driver for overall volume growth and margin improvement, especially as trade discounts are controlled.

I would now turn the call over to the management for their opening remarks. Thank you, and over to you.

Risks & concerns

  • Morbi Gas Availability & Supply Disruptions

    high

    Disruptions in the unorganized sector in Morbi due to gas availability challenges could impact supply, though Cera is insulated due to sourcing arrangements and internalization efforts.

    Management acknowledged

  • Input Cost Volatility (Metals & Energy)

    medium

    Expect continued volatility in key input prices, particularly brass and energy costs, impacting margins.

    Management acknowledged

  • High Trade Discounts

    medium

    Elevated trade discounts contributed to margin pressure, but management expects to regain control as demand stabilizes.

    Management acknowledged

  • Tiles Business Impact from Outsourcing & Morbi

    medium

    Tiles business, heavily reliant on outsourcing from Morbi, is expected to be impacted in Q1 FY27 if plants do not fully open or sourcing remains difficult.

    Management acknowledged

Q&A highlights

8 direct
Retail vs. Institutional Sales Mix and Future Growth Direct
going forward, we expect that the proportion of retail and project should now remain stable at 60% for retail and 40% for the project business.

Clarifies the expected channel mix for future growth, indicating confidence in retail recovery and stabilization of project contribution.

Asked by Praveen Sahay

Impact of Price Hikes on Margins and Future Pricing Strategy Direct
effectively over a period of two months, we have taken a price increase of 12% in the case of sanitaryware and 16% in the case of faucetware... we can expect this kind of price change to start reflecting in the project business from, let us say, in another five to six months.

Provides specific details on recent price hikes and their expected impact on retail (immediate) and project (delayed) segments, crucial for margin recovery.

Asked by Praveen Sahay

Revenue and Profitability Targets for New Brands (Senator & Polipluz) Direct
for FY27, we are projecting that Senator should be able to generate roughly INR 40-45 crore and the Polipluz would be in the range of INR 30 to INR 35 crore. Total, we expect that these two brands taken together should give us roughly INR 70 to INR 80 crore.

Quantifies the ambitious growth targets for the new brands, indicating their increasing contribution to overall revenue and the company's premiumization strategy.

Asked by Praveen Sahay

Overall Revenue Growth Guidance for FY27 Direct
So, with the demand trend continuing to grow upward, we expect the overall growth of around 18% to 20% next year.

Consolidates segment-specific growth into an overall revenue growth target, providing a clear top-line outlook for the next fiscal year.

Asked by Utkarsh Nopany

Continuation of Trade Discounts and Margin Pressure Direct
So, as far as margin decline is concerned, the two factors which have largely impacted the gross margin are the rise in the input cost, mainly the brass prices which have gone up by 29% which has now been sufficiently taken care of through the price rise to offset the impact of increased cost. And secondly, the elevated trade discounts. So, these trade discounts are again can be corrected it in the coming quarters.

Addresses the persistent margin pressure from discounts, indicating management's plan to control them in upcoming quarters, which is key for margin recovery.

Asked by Utkarsh Nopany

Sanitaryware Capacity Utilization and Morbi Impact Direct
in case of sanitaryware in the month of March, we had an advantage in terms of the inventory levels... And what has happened is in March we have taken a decision to close one kiln... So, I think this capacity which is running at 70%-75% will further improve in the coming months.

Explains the strategic management of capacity and inventory in response to gas supply issues from Morbi, highlighting operational flexibility and future capacity plans.

Asked by Utkarsh Nopany

Q4 Employee Cost Decline and Future Outlook Direct
In Q3, once the wage code was announced, we had taken certain assumptions that based on the kind of liabilities which will be coming up, there would be an additional expense of something like INR 5 crore... But in the current quarter, once we have got a better understanding of the wage code and related laws... there is an exceptional item of INR 10 crore of write-back.

Clarifies the one-time nature of the Q4 employee cost reduction due to a write-back related to wage code assumptions, providing clarity on a non-recurring item.

Asked by Aasim Bharde

FY27 Capex Plan and Greenfield Project Status Direct
In this particular year, we are anticipating a total capex of something like INR 45 crore... the greenfield project was initially estimated at around INR 130 crore, of which land portion has already been purchased, that is at INR 27 crore... if we conclude in terms of construction this year, then it will cost around INR 150 crore.

Outlines the detailed capex plan for FY27, including routine, expansion, and office space acquisition, and provides an update on the greenfield project's cost and timeline.

Asked by Aasim Bharde

3 min read 7 chapters

Detailed narrative

Q4 FY26 Financial Performance and Margin Pressure

Cera Sanitaryware reported a revenue from operations of ₹644 crores in Q4 FY26, marking an 11.41% year-on-year growth from ₹578 crores in Q4 FY25. Despite top-line growth, profitability was challenged, with EBITDA declining 7.54% to ₹98 crores and EBITDA margins compressing by 310 basis points to 15.2%. Profit after tax (PAT) also saw a 10.46% decrease to ₹77 crores, resulting in an EPS of ₹59.96 compared to ₹66.36 in the prior year quarter. This margin pressure was primarily attributed to elevated brass input costs, which increased by 29% YoY, and continued high trade discounts.

Segmental Growth and Product Mix

The company's core categories, Sanitaryware and Faucetware, together contributed 89% of total revenues. Sanitaryware revenue grew by 10.7% YoY, accounting for 46% of revenues, while Faucetware demonstrated robust growth of 24.3% YoY, contributing 43% of revenues. The Wellness segment also grew significantly by 31.2% YoY, albeit from a smaller base (2% of revenues). Conversely, the Tiles segment experienced an 8.3% YoY decline, representing 9% of revenues. From a product mix perspective, 41% of sales came from the premium segment, 38% from mid-segment, and 21% from entry-level products, indicating a balanced market presence.

Pricing Strategy and Input Cost Management

To counteract sustained input cost pressures, particularly in brass, Cera implemented calibrated price revisions. Initially, a 4% increase in sanitaryware and 11% in faucetware was applied. Subsequently, over two months, effective price increases of 12% for sanitaryware and 16% for faucetware were rolled out, primarily impacting the retail segment. While these price adjustments are expected to cover most of the brass cost increases, some residual impact will be managed through better discount control as demand conditions stabilize. The company expects these price changes to reflect fully in retail from Q1 FY27 and in project business within five to six months.

New Brands (Senator & Polipluz) Expansion and Outlook

FY26 was a pivotal year for strengthening Cera's brand architecture through Senator and Polipluz. Senator, targeting the premium segment, expanded its retail footprint to 40 flagship stores, generating ₹10.5 crores in FY26, with a target of 60 stores and ₹40-45 crores revenue in FY27. Polipluz, focused on the entry-level and rural segments, onboarded 102 distributors and 1,120 dealers, achieving ₹8.5 crores revenue in FY26, with targets of 200 distributors, 2,000 dealers, and ₹30-35 crores revenue in FY27. Combined, these brands aim for ₹70-80 crores revenue in FY27, with profitability expected after accounting for initial publicity expenses.

Market Demand and Channel Dynamics

The company observed early signs of demand recovery from Q3 FY26, which strengthened in Q4 and continued into April 2026, particularly in the retail segment. The project business maintained strong traction, now contributing 39-40% of revenues, up from 30% a couple of years ago. Management anticipates the retail-to-project mix to stabilize at 60:40 going forward. Geographically, Tier-3 cities accounted for 40% of sales, followed by Tier-1 at 36% and Tier-2 at 24%, indicating balanced growth across regions.

Operational Resilience and Capacity Expansion

Cera navigated supply chain disruptions, particularly in Morbi due to gas availability issues, by leveraging existing inventory and manufacturing capabilities. The company also initiated internalization of certain sanitaryware product categories to enhance supply reliability. Faucetware operations ran at 106% utilization, manufacturing 4.3 lakh pieces in March 2026. In response to strong demand, Cera is undertaking a minimal capex of approximately ₹5 crores to increase faucetware production capacity to 5 lakh pieces per month, expected to be operational from Q4 FY27.

Capital Expenditure and Liquidity Position

The capital expenditure for FY26 was ₹14.5 crores, primarily for routine maintenance and brand/retail initiatives. For FY27, the company projects a total capex of approximately ₹45 crores. This includes ₹25 crores for normal capex, ₹5 crores for faucetware expansion, and ₹15 crores for acquiring office space. The greenfield project, initially estimated at ₹130 crores (excluding ₹27 crores for land already purchased), is now projected to cost ₹150 crores for the first phase. As of March 31, 2026, Cera maintained a healthy cash and cash equivalents balance of ₹853 crores.

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