Company UpdateEarnings Call Transcript
Cera Sanitaryware Q1 FY27: 19.5% revenue growth; one-time items pressured margins; FY27 guidance intact at 18-20% revenue growth and 13.5-14% EBITDA
Financial Performance
- Revenue from operations: INR 486 crore; prior year Q1 INR 407 crore.
- Turnover discounts now deducted from revenue; current quarter down 2.5%, prior quarter down 3%.
- EBITDA excluding other income: INR 49.2 crore; margin 10.1% vs 13.1% YoY.
- PAT: INR 45 crore; EPS: INR 35.15; vs Q1 FY26 PAT 47 crore; EPS 36.08.
- Cash and cash equivalents stood at INR 943 crore as of June 30, 2026.
- Capex FY27 outlay planned at approximately INR 43 crore; Faucetware expansion and digital upgrades.
- Brand investment for FY27: INR 85 crore for brand-building campaigns.
- Guidance: FY27 revenue growth in the range of 18-20%; EBITDA margin 13.5-14%.
Operating Update
- Revenue mix: Sanitaryware 47%, Faucetware 40%, Tiles 11%, Wellness 2%.
- Sanitaryware growth 14% YoY with volume-driven contribution; Faucetware growth 25% YoY with volume-driven contribution.
- Senator and Polipluz progress to be evaluated over a longer horizon; targets intact.
- Gas cost weighted average INR 48.43 per m3; gas sources 69% GAIL, 31% Sabarmati.
- Gas cost accounts for about 3.3% of quarterly revenue.
- Pricing actions: cumulative increases of 12% in Sanitaryware and 16% in Faucetware; largely absorbed.
Balance Sheet & Cash Flow
- Inventory days reduced from 80 to 68.
- Receivables reduced from 38 to 30 days; payables increased from 43 to 48 days.
- Net working capital cycle improved from 75 to 50 days year-on-year.
Capex & Projects
- FY27 capex outlay about INR 43 crore; Faucetware brownfield capacity expansion and efficiency upgrades.
- Greenfield sanitaryware expansion deferred; utilization improved to ~80% after June; decision end-year.
- Flagship Senator stores guidance maintained at 50 by year-end.
Brand & Digital
- DMS extended to retailer loyalty program for better secondary-sales visibility.
- Brand campaign 'Your Moment of Cera' launched with Kriti Sanon across TV, digital, and media.
- Brand-building and promotional spend planned around INR 85 crore in FY27.
Guidance & Outlook
- FY27 revenue growth expected 18-20%; EBITDA margin guided 13.5-14%.
- Delayed price impact: Q2 will reflect price rises; project pricing to contribute post-Q2.
- Brass price trajectory under watch; potential further price hikes if costs stay elevated.
- Full-year gross margin expected to recover toward historical levels if input costs stabilise.
Q&A Highlights
- Q1 margins were affected by one-time items; full-year margins expected at 13.5-14%.
- One-time wage settlement impacted current period; annualized ~INR 18.3 crore; prior period INR 6.3 crore.
- Staff cost quarterly run-rate excluding one-time settlement around INR 72 crore; full-year impact ~INR 18.3 crore.
- Greenfield capex revival possible if demand sustains; current utilization improvements reduce urgency.
- Brass price movements may necessitate additional price increases; retail impact delayed to next quarter.
- Senator/Polipluz progress remains intact; numbers to be tracked over longer horizon; targets unchanged.