Hold Cera Sanitaryware; target of Rs 8262: ICICI Securities

ICICI Securities recommended hold rating on Cera Sanitaryware with a target price of Rs 8262 in its research report dated September 23, 2023.

Broker Research

September 26, 2023 / 14:49 IST

Hold

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities research report on Cera Sanitaryware

We recently interacted with the management of Cera Sanitaryware (CRS). Key takeaways: 1) Demand scenario in Q2- TD has been tepid as higher overall inflationary conditions have resulted in some temporary slackness. CRS expects demand to be much stronger in H2FY24 and has reiterated its ~20% YoY revenue growth guidance for FY24. 2) Margins to remain steady at ~16% as raw material costs remain benign. 3) Brownfield expansion of faucetware facility has commenced production from Sep’23 and will likely be a major growth driver. 4) Land acquisition for the sanitaryware facility is in final stages; will likely happen in Q3FY24. We continue to like CRS, as it could potentially be a significant beneficiary of the ongoing uptick in the housing market, and model revenue/PAT CAGR of 16.4%/22.3%, over FY23- 26E with healthy return ratios (ROE of 20.2% in FY25E).

Outlook

We maintain our estimates and HOLD rating with a rolled over Dec’24E TP of INR 8,262 (earlier INR 7,928), set at unchanged 32x Dec’25E PER.

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