Buy Cera Sanitaryware; target of Rs 7456: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on Cera Sanitaryware

We are upgrading our recommendation from ACCUMULATE to BUY given the recent significant correction in stock price. We visited Cera’s (CRS) sanitaryware and faucetware plants, and central warehouse, at Kadi, Mehsana, Gujarat. Whilst there, we interacted with the senior leadership team to gain insights into demand, competition, capacity expansion plans, and product diversification strategies for the near to long term. We believe demand challenges in the bathware segment will continue in the near term. However, the management expects demand to revive in Q2FY26. The company aims to drive growth through product diversification, focusing on premium offerings. In the long term, growth is expected to come from premium products, which are targeted to contribute to 10% of revenue in the next 3 years. Additionally, polymer-based products in the faucet segment are expected to drive volume growth over the next 3-4 years. Over the years, CRS has maintained its market share in both the sanitaryware and faucets segments.

Outlook

We estimate revenue/ EBITDA/PAT CAGR of 14.0%/18.7%/17.5% over FY25-27E. There is no change in our estimates and we maintain TP of Rs7,456, based on 30x FY27E earnings. Upgrade to BUY.

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Cera Sanitaryware - 27032025 - prabhu