Multibagger Stock Tip – Cera Sanitaryware


Company Overview:

Cera Sanitaryware one of the leading business houses of India and it is the third largest company in the organized sector with over 20% market share. Cera has been steadfastly moving towards its mission of becoming a total bathroom solution company. It is the first Sanitaryware Company to use Natural gas and the company engaged into wide spectrum of activities related to manufacturing Ceramic Sanitaryware, import and export of various bathroom related products like Tiles, C.P Fittings etc.

It is the first Sanitaryware company to implement ISO 9002 and ISO 14001 certifications for Quality Management Systems and Environment-friendly Manufacturing systems.

Business Details:

Cera has been on the forefront of launching a versatile colour range and introducing the bath suite Concept. It also launched innovative designs and water-saving products. The twin-flush model launched in India by Cera for the first time, reduces the water needs of households considerably. WCs designed to flush in just 4 litres of water is another notable innovation by Cera. Its product range includes:

  • Vitreous China Sanitaryware
  • Faucet ware- C.P Fittings and Taps
  • Wellness products like Shower Panels, bathroom cubicles, bath tubs, whirlpools- Jacuzzi, Bath fittings
  • Allied products- PVC Cisterns & Seat Covers
  • Kitchen sinks and bathroom Mirrors

The Company Having a state of the art production facility at Kadi, in North Gujarat. To achieve growth in the rapidly changing retail market in the country, Cera, has launched its one of a kind Cera Style Studios in Ahmedabad, Bangalore, Chandigarh, Kolkata, Cochin, Hyderabad and Mumbai. Cera Style Studios will complement its existing network of 600 dealers and 5000 retailers. To increase penetration, along with Style Studio’s, Cera has launched several Cera Style Galleries across the country which are Exclusive Cera Retail Centre.


Besides having a very good presence in the domestic market they are presently exporting the products to as many as 20 different countries spread across in Canada, North America, Africa, Australia, New Zealand, and Middle East etc.

Future Projects & Expansion Plans:

Cera Sanitaryware is planning to invest Rs 140 crore in its manufacturing facility in Kadi in Mehsana district of Gujarat, to enhance capacity. As per the plan it will spend Rs 100 crore to increase production of range of wall and vitrified tiles from the present 2.7 million to 3 million pieces. The company currently has a production capacity of 2 million pieces per annum, which is already being expanded to 2.7 million pieces. The ongoing expansion is likely to be commercially commissioned by January 2013. Another Rs 40 crore for manufacturing faucets from 2,500 to 5,000 pieces per day at the facility. The company expects to add capacity to 3 million pieces per annum over the period of next one and a half year. The company has also forayed into manufacturing of tiles. In this regard, it has launched an array of elegant range of high-definition (HD) digital wall and digital polished glazed vitrified tiles with matching floor tiles. It is also offering the normal vitrified tiles with nano technology. With these new launches, Cera has laid the groundwork for a quantum leap in growth in the coming years and has reaffirmed the brand in the market. The company is expecting revenue of Rs.20 crore from tile business this year and Rs.60 crore next year. Cera, however, will not manufacture tiles but will outsource them from indigenous tile makers. With the compounded annual growth rate (CAGR) of 25 per cent over the past five years, the company is now targeting a turnover of Rs 500 crore for 2012-13.

Financial Performance:

Cera has registered sharp numbers for the quarter ending September 2012. The company has achieved yet again impressive growth with a figure of Rs. 111.38 Cr. being 52% smart increase in top line as against Rs.73.29 crores in the like quarter last year. Operating profit skyrocketed about 58% at Rs.18.43 crore Vis-a-Vis Rs.11.70 crores YoY. The increase in business was due to increased demand. Despite the market vagaries, the company has registered a 44 per cent rise in its profit after tax (PAT) at Rs 11.03 crore for the quarter ended 30 September, 2012 as compared with Rs.7.65 crores in Q2FY12. EPS stood at Rs.8.72 as against Rs.6.05 clocked in quarter ended September 2011. By way of a CAGR of 25 per cent over the last five years, the company is expecting to increase its turnover from Rs 319 crore in 2011-12 to nearly Rs 500 crore this fiscal. The company enjoy’s 75 percent share in Gujarat’s Sanitaryware market


Cera Sanitaryware Ltd. is trading at an attractive valuation at 11.84x and 10.21x of FY13EPS of Rs.31.92 and FY14EPS of Rs.37.02.

We Bet the Share to Grab at 375 for Target of 475. In a time frame of 9-12 Months.