CERA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials

Earnings & Profitability: EPS of ₹189 is strong, and ROCE (22.4%) and ROE (18.3%) reflect solid capital efficiency.

Quarterly PAT: Dropped slightly from ₹86.8 Cr to ₹46.5 Cr, a 0.94% decline—minor but worth monitoring.

Debt Profile: Debt-to-equity of 0.05 makes CERA nearly debt-free, a major plus for financial stability.

Cash Flow: While not explicitly stated, low debt and consistent profitability imply healthy operating cash flows.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 33.4 Fairly valued vs. industry average

P/B Ratio ~6.1 Premium valuation, but justified by ROE

PEG Ratio 1.94 Slightly overvalued relative to growth

Dividend Yield 1.02% Decent, adds to shareholder value

Valuation is reasonable for a high-quality midcap, though not a bargain.

🏭 Business Model & Competitive Advantage

CERA Sanitaryware is a premium player in bathroom solutions, tiles, and wellness products. Its strengths include

Strong brand positioning in the premium segment

Wide distribution network and dealer relationships

Innovation in design and water-saving technologies

Low debt and consistent dividend payouts

The company has delivered over 200% returns in the past five years, supported by a 12.4% profit margin and strong fundamentals

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📈 Technical & Sentiment Indicators

RSI: 46.5 – Neutral zone, no strong momentum.

MACD: -34.0 – Bearish crossover, short-term weakness.

Volume Dip – Below weekly average, indicating reduced interest.

DMA 50 & 200: Current price is below both—suggests short-term bearishness.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹6,000–₹6,200, near support and below DMA 50.

Current Price ₹6,334: Slightly above ideal entry, but still reasonable for long-term investors.

🕰️ Long-Term Holding

Hold or Accumulate on Dips: Strong fundamentals, low debt, and brand strength make it a solid long-term compounder.

Monitor Profit Trends: Recent dip in PAT and FII outflow (-3.4%) suggest caution in the short term.

If you'd like, I can also provide a peer comparison with Somany Ceramics or a forecast model for FY27.

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trendlyne.com

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walletinvestor.com

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stockpricearchive.com

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