Profile
Cera sanitaryware Ltd is engaged in manufacturing, marketing and distribution of
sanitaryware, faucetware and trading in tiles and other bathroom products. CERA
is positioned amongst Top-3 organized players in sanitaryware market owing to its
presence across product segments at various price points and unique designs. The
Company has more than 3,600 dealers and 12000+ retailtouchpoints.
Investment Rationale
Right outsourcing mix: CERA has been able to strike a prudent balance between
in-house manufacturing and outsourcing. This strategy helps company to be asset
light and improves overall return ratios like ROE/ROCE.
Use of high tech in manufacturing: Cera has been an innovator in the use of technology and automation in design and process. The company has indigenously developed robotic glazing machines which results in better spread of glaze while reducing wastage and dependence on labour. It has also developed 3D printing which allows reduction in SKUs since the mould is designed very fast and focus is on production on faster selling products.
Recovery in Real Estate: Cera is best-positioned to ride on real estate recovery due to focus on product positioning, brand-building. Recently housing demand has surged, resulting in growth opportunities for the Cera.
Outlook & Valuation
Cera is likely to see the healthy traction in the coming times due to strong product
portfolio at a varied price points, robust distribution network, rising brand awareness
in Tier-II and Tier-III cities, Imminent recovery in individual house building and
thrust on low-cost housing projects, cost savings initiatives and strong balance
sheet with consistent free cashflow generation