Cera Sanitaryware – Q1FY14 results – mixed bag

This article has a quick update on Cera Sanitaryware’s first quarter results for FY14.

I had written a detailed note on Cera Sanitaryware earlier.

Q1FY14 results for Cera Sanitaryware

A snapshot of the quarterly result for period ending on 30 Jun 2013 is given below along with past quarterly data.

As can be seen the first quarter is usually slow for the company. So, if you look at Q1FY14 vs. Q4Fy13 it will look relatively unattractive but that would not be the fair way to look at it. If you consider Q1FY14 vs Q1 FY13 you will notice that operating margin has taken a hit. That is also because Q1FY13 had a comparatively high margin of 22% versus a figure of around 16%-17% for other quarters.

 

 

Download the quarterly result data for Cera Sanitaryware.

 

Management commentary

Moneycontrol carried an interview with Cera Sanitaryware’s strategic advisor.

Key takeaways are as follows:

  • Operating margins should stabilise around the 16% mark.
  • As is evident from their longer term data over the past few years, the company wants to increase sales volumes by accepting a small dip in operating margins.
  • This bodes well for the return on equity as the brand spend is becoming productive.
  • They are outsourcing tiles and selling them under the CERA brand.
  • Faucet-ware segment has been tough for them.

Cera Sanitaryware trades at a price to earnings (P/E) ratio of around 13.4 times as of the closing price on 24 July 2013.

The company seems to be growing at a decent clip at a time when companies in many sectors are struggling to grow.

To understand the business and get a perspective of past P/E range among other things, you can read the detailed research on Cera Sanitaryware.

 

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Comments

  1. malps says

    Kunal,

    How did CERA do compared to HSIL and Parryware in Q1? If they are loosing market share or margin more than the competition, it could be sign of worry.

    Regards,
    malps

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