Hold Cera Sanitaryware; target of Rs 9872: Prabhudas Lilladher

About this update from Cera Sanitaryware Limited

Prabhudas Lilladher's research report on Cera SanitarywareCera Sanitaryware (CRS) reported disappointing results, below our estimates, due to subdued demand, which led to muted revenue (down 6.6% YoY) and a contraction in margins (-190bps YoY). However, CRS has maintained its revenue guidance to reach Rs29bn by Mar-27 with ~16% CAGR over FY24-27, factoring in the Q1FY25 & Q2FY25 slowdown, and EBITDA margin at 16-17%. We believe the demand scenario will revive by H2FY25 with improvement in demand led by healthy growth in the real estate sector. We estimate revenue/ EBITDA /PAT CAGR of 9.7%/9.7%/10.9% over FY24-26E.OutlookWe downward revise our FY25/FY26E earnings estimate by 5.5%/5.9% factoring in margin contraction along with subdued demand. We roll forward our TP to Jun’26 and downgrade the stock to ‘Hold’ from ‘Accumulate’ with revised TP of Rs9,872 (Rs9,650 earlier), based on 40x Jun’26 earnings.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Cera Sanitaryware - 190824 - prabhu

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