⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
CERA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | CERA | Market Cap | 6,424 Cr. | Current Price | 4,982 ₹ | High / Low | 7,275 ₹ |
| Stock P/E | 28.6 | Book Value | 1,063 ₹ | Dividend Yield | 1.30 % | ROCE | 22.4 % |
| ROE | 18.3 % | Face Value | 5.00 ₹ | DMA 50 | 4,987 ₹ | DMA 200 | 5,670 ₹ |
| Chg in FII Hold | -1.22 % | Chg in DII Hold | 0.46 % | PAT Qtr | 35.0 Cr. | PAT Prev Qtr | 56.6 Cr. |
| RSI | 56.3 | MACD | -107 | Volume | 95,377 | Avg Vol 1Wk | 31,765 |
| Low price | 4,461 ₹ | High price | 7,275 ₹ | PEG Ratio | 1.66 | Debt to equity | 0.04 |
| 52w Index | 18.5 % | Qtr Profit Var | -23.7 % | EPS | 165 ₹ | Industry PE | 57.9 |
📊 Financial Overview
- Revenue & Profitability: Quarterly PAT fell from 56.6 Cr. to 35.0 Cr., showing short-term weakness. EPS at 165 ₹ remains strong, reflecting solid earnings capacity.
- Margins & Returns: ROE at 18.3% and ROCE at 22.4% are healthy, indicating efficient capital use.
- Debt Profile: Debt-to-equity ratio of 0.04 highlights a near debt-free balance sheet, ensuring stability.
- Cash Flow: Dividend yield of 1.30% supports shareholder returns, backed by consistent profitability.
💹 Valuation Indicators
- P/E Ratio: 28.6 vs Industry PE of 57.9 → undervalued relative to peers.
- P/B Ratio: Current Price 4,982 ₹ vs Book Value 1,063 ₹ → P/B ~4.7, reflecting premium valuation.
- PEG Ratio: 1.66 → suggests fair valuation but not deeply undervalued.
- Intrinsic Value: Appears moderately undervalued compared to industry benchmarks.
🏢 Business Model & Competitive Advantage
- Cera Sanitaryware operates in sanitaryware, faucets, and tiles, benefiting from housing and infrastructure demand.
- Strong brand presence and diversified product portfolio provide competitive strength.
- Low leverage and healthy returns enhance financial resilience.
📈 Technical & Entry Zone
- Stock trading at 4,982 ₹, aligned with 50 DMA (4,987 ₹) and below 200 DMA (5,670 ₹).
- RSI at 56.3 indicates neutral momentum; MACD negative suggests short-term weakness.
- Entry Zone: Attractive between 4,700–4,900 ₹ for accumulation, with long-term holding potential.
✅ Positive
- Strong ROE (18.3%) and ROCE (22.4%).
- Near debt-free balance sheet (Debt-to-equity 0.04).
- Undervalued compared to industry PE.
⚠️ Limitation
- Quarterly PAT decline (-23.7%) shows short-term weakness.
- P/B ratio (~4.7) indicates premium valuation.
- FII holdings decreased (-1.22%), reflecting cautious sentiment.
📉 Company Negative News
- No major recent negative news, but profit decline and reduced FII holdings raise caution.
📈 Company Positive News
- Increase in DII holdings (+0.46%) signals domestic institutional confidence.
- Strong brand presence and diversified product portfolio support long-term growth.
🏭 Industry
- Sanitaryware and building materials sector benefits from housing demand and infrastructure expansion.
- Industry PE at 57.9 indicates high valuations across the sector.
- Competition from domestic and global players remains a challenge.
🔮 Conclusion
- CERA shows strong fundamentals with healthy returns, low leverage, and brand strength.
- Valuation is moderate compared to industry, though short-term profit weakness is a concern.
- Recommendation: Accumulate in the 4,700–4,900 ₹ range for long-term holding, focusing on housing and infrastructure-led demand growth.