'Buy' Cera Sanitaryware Shares Maintains Anand Rathi, Trims Target Price — Check Details

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Anand Rathi Report

Cera Sanitaryware Ltd. reported a flat revenue of ~Rs 4.9 billion in Q2 FY26, largely due to subdued retail environment and poor performance of faucetware. Gross profit declined 3.7% YoY to ~Rs 2.5 billion, led by elevated input cost.

Despite high employee expenses, decline in Ebitda was arrested at Rs 671 million (down 3.5% YoY), owing to lower other operating expenses. However, PAT tumbled 16.8% YoY to Rs 566 million due to onetime deferred tax income recognised in previous year.

Management targets 10-12% growth in H2 FY26 and 7-8% growth in FY26.

Expecting revenue/earnings to clock 8.9/11.8% CAGR over FY25-28, we maintain Buy rating on the stock with a 12-month target price of Rs 8,443 (from Rs 8,956 earlier), valuing it at 35x FY27e/FY28e average earnings per share.

Risks:

Demand slowdown, under-absorption of overheads, higher input cost, and increased competitive intensity.

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