Mehabe score: 4 G Factor: 3 Piotski Score: 6 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
Incorporated in July 1998, Cera Sanitaryware Ltd is headed by Mr Vikram Somany; the company manufactures sanitaryware and faucets and outsources wellness products and tiles. The sanitaryware and faucet plants are in Kadi, Gujarat, with capacity of 36 lakh and 18.5 lakh pieces per annum, respectively.
The Company has been constantly launching new designs in Sanitaryware, Faucets and Tiles. The new designs are indigenously developed by in-house teams, after feedback from the market. This helps the Company to be seen a leader in product offerings. Site:CERA Main Symbol:CERA
Stock trades at 4478.0, below its 50dma 4948.15 and below its 200dma 4604.81. The stock remains bearish on technicals
The 52 week high is at 6450.00 and the 52week low is at 3315.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
Weakness
– The company has delivered a poor sales growth of 5.95% over past five years.
Competition
– The industry trades at a mean P/E of 32.9x. Kajaria Ceramics trades at the industry’s max P/E of 48.13x. CERA trades at a P/E of 44.5x
– Industry’s mean G-Factor is 2.1 while the mean Piotski score is 9.0. CERA has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 0.9%. The max 1- month return was given by Orient Bell: a return of 11.31 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 403.0 cr compared to Rs 324.0 cr for period ended Sep 2020, a rise of 24.4% .
vis-vis 41.0 for period ended Sep 2020 .
Operating Margins expanded 273.0 bps for period ended Sep 2021 vis-vis Sep 2020.
Company reported operating profit of Rs 62.0 cr for period ended Sep 2021 and operating profit margin at 15.4 % for same period.
The EPS for quarter ended Sep 2021 is Rs 33.09 compared to Rs 9.39 for previous quarter ended Jun 2021 and Rs 18.93 for Sep 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1386.0 cr for period ended TTM vis-vis sales of Rs 1224.0 cr for the period ended Mar 2021, a healthy growth of 11.7%. The 3 year sales cagr stood at 0.8%.
Operating margins expanded to 14.0% for period ended TTM vis-vis 13.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 131.0 cr for period ended TTM vis-vis sales of Rs 101.0 cr for the period ended Mar 2021, rising 22.9%.
Company recorded a Net Profit CAGR of 4.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 268.0 cr for period ended Mar 2021 vis-vis Rs 129.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 12.0% compared to 14.0% over the last 3 Years. – The stock has given a return of 34% on a 1 Year basis vis-vis a return of 23% over the last 3 Years. – The compounded sales growth on a TTM bassis is 27% vis-vis a compounded sales growth of 1% over the last 3 Years. – The compounded profit growth on a TTM basis is 44% vis-vis a compounded profit growth of 0% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 18.75% vis-vis 17.95% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 15.82% vis-vis 15.75% for Sep 2021
Conclusion
– is almost debt free.
– is expected to give good quarter – The company has delivered a poor sales growth of 5.95% over past five years.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 4948.15 and is trading at 4478.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
