Cera Sanitaryware (532443) Q1 24/25 earnings summary

Executive summary

• Q1 FY 2025 faced challenging market conditions due to subdued demand, heatwaves, and general elections, resulting in standalone revenue of INR 398 crore and profit after tax of INR 47 crore.

• Sanitaryware and porcelain segments contributed 53% and 36% of revenues, respectively, with new product development accounting for 32% of sales.

• Strategic focus remains on premiumization, luxury segment expansion, and strengthening presence in Tier-2 and Tier-3 towns.

• Standalone and consolidated unaudited financial results for Q1 FY25 were approved and reviewed by the Board and Audit Committee on August 12, 2024.

• The company operates mainly in building products, with sales primarily in the domestic market.

Financial highlights

• Standalone revenue from operations for Q1 FY25 was ₹39,801.31 lakhs, down from ₹42,691.69 lakhs in Q1 FY24; consolidated revenue was ₹40,071.18 lakhs, down from ₹42,863.37 lakhs.

• Standalone net profit after tax for Q1 FY25 was ₹4,696.56 lakhs, compared to ₹5,637.49 lakhs in Q1 FY24; consolidated net profit was ₹4,745.78 lakhs, compared to ₹5,670.16 lakhs.

• Basic and diluted EPS for Q1 FY25 stood at ₹36.11 (standalone) and ₹36.18 (consolidated), versus ₹43.35 and ₹43.27 in Q1 FY24, respectively.

• EBITDA margin at 17.5% (down from 19% YoY); net working capital days reduced to 66 from 72 YoY.

• Cash and cash equivalents stood at INR 864 crore as of June 30, 2024, up 14.4% sequentially.

Outlook and guidance

• Guidance for FY 2025 and beyond remains unchanged, targeting INR 2,900 crore revenue by March 2027 and 16% CAGR over three years.

• Margins expected to be maintained between 16%-17% for the rest of the year, with improvement anticipated as demand recovers in H2.

• Growth momentum expected to pick up from Q3 FY 2025, supported by a strong project order book and anticipated retail recovery.

• A proposed revision in capital gains tax rates, if enacted, would decrease deferred tax expenses and liabilities by ₹784.99 lakhs.