Cera Sanitaryware Limited

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.

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.

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.

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.

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.

Cera navigated supply chain disruption^🌐s, 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.

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.