CERA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | CERA | Market Cap | 6,507 Cr. | Current Price | 5,044 ₹ | High / Low | 7,275 ₹ |
| Stock P/E | 27.6 | Book Value | 1,063 ₹ | Dividend Yield | 1.29 % | ROCE | 22.4 % |
| ROE | 18.3 % | Face Value | 5.00 ₹ | DMA 50 | 5,277 ₹ | DMA 200 | 5,949 ₹ |
| Chg in FII Hold | -1.22 % | Chg in DII Hold | 0.46 % | PAT Qtr | 56.6 Cr. | PAT Prev Qtr | 46.5 Cr. |
| RSI | 44.7 | MACD | -84.5 | Volume | 8,460 | Avg Vol 1Wk | 10,863 |
| Low price | 4,794 ₹ | High price | 7,275 ₹ | PEG Ratio | 1.61 | Debt to equity | 0.04 |
| 52w Index | 10.1 % | Qtr Profit Var | -16.8 % | EPS | 182 ₹ | Industry PE | 27.6 |
📊 Financials: Cera Sanitaryware Ltd. has delivered consistent profitability with PAT at 56.6 Cr compared to 46.5 Cr previously, though quarterly profit variation is negative (-16.8%). ROE at 18.3% and ROCE at 22.4% reflect strong efficiency. Debt-to-equity ratio of 0.04 highlights a virtually debt-free balance sheet. EPS of 182 ₹ supports earnings visibility, though growth momentum has softened.
💹 Valuation: Current P/E of 27.6 is in line with the industry average (27.6), suggesting fair valuation. P/B ratio ~4.74 (Price 5,044 ₹ / Book Value 1,063 ₹) is moderately expensive. PEG ratio of 1.61 indicates valuations are stretched relative to growth. Dividend yield of 1.29% provides modest income support.
🏢 Business Model: Cera operates in the sanitaryware and building materials sector, offering products across faucets, tiles, and sanitaryware. Competitive advantage lies in brand recognition, wide distribution network, and diversified product portfolio. Strong domestic demand in housing and infrastructure supports long-term growth.
📈 Entry Zone: Attractive accumulation zone between 4,800–5,000 ₹, near support levels and below DMA200 (5,949 ₹). RSI at 44.7 indicates neutral momentum, while MACD (-84.5) suggests bearish undertone. Long-term investors can accumulate gradually at lower levels.
🔒 Holding Guidance: Fundamentally strong with debt-free operations and efficient returns. Suitable for long-term holding, though valuations are fair and profit momentum needs monitoring. Accumulate on dips for margin of safety.
Positive
- Debt-free balance sheet (Debt-to-equity 0.04).
- Strong ROE (18.3%) and ROCE (22.4%) highlight efficiency.
- EPS of 182 ₹ supports earnings visibility.
- Strong brand presence in sanitaryware and building materials.
- DII holdings increased (+0.46%), reflecting domestic confidence.
Limitation
- Quarterly profit variation (-16.8%) indicates slowing momentum.
- P/B ratio of 4.74 suggests moderately expensive valuation.
- PEG ratio of 1.61 highlights stretched valuation relative to growth.
- FII holdings decreased (-1.22%), showing cautious foreign sentiment.
Company Negative News
- No major negative news reported, but profit decline and reduced FII holdings raise caution.
Company Positive News
- Debt-free operations strengthen financial resilience.
- Strong brand recognition and diversified product portfolio.
- Improved domestic institutional confidence with DII increase.
Industry
- Sanitaryware and building materials sector benefits from housing and infrastructure growth.
- Industry P/E at 27.6 suggests fair optimism.
- Urbanization and rising housing demand drive long-term growth.
Conclusion
✅ Cera Sanitaryware Ltd. is financially strong, debt-free, and efficient with solid ROE/ROCE. Valuations are fair but profit momentum has softened. Long-term investors may accumulate near 4,800–5,000 ₹ for margin of safety, while monitoring demand cycles and institutional sentiment.
I can also extend this with a peer comparison against Kajaria Ceramics and Somany Ceramics to highlight relative valuation and efficiency. Would you like me to add that?