Cera Sanitary ware - down 16%

Well, this is the big risk with stocks that are quoting at an exorbitant P/E. Even a slight slippage in performance gets punished severely. The growth in sales was down from 24% to 15% and the EBITDA margins were down from 16% to 14.50%. The management also stated that there is some sluggishness in demand which may continue for the next few quarters as well.

The same thing happened in Hawkins as well, if you recollect.

We'll have to wait for analysis from brokerages to get a sense of where the stock will go from here.

Meanwhile, the press release about the results is here. The management's interview is here.

 

Cera Sanitaryware eyes 30% bottomline growth in FY16: Vikram Somany

The company has cut down cost and brought in more efficiency that has led to 30 percent of bottomline growth which they believe to be more than expectation.

On Thursday, Cera Sanitaryware announced its Q4 results. Net profit of Cera Sanitaryware rose 14.37% to Rs 22.12 crore in the quarter ended March 2015 as against Rs 19.34 crore during the previous quarter ended March 2014. Sales rose 14.78% to Rs 250.44 crore in the quarter ended March 2015 as against Rs 218.19 crore during the previous quarter ended March 2014.

For the full year,net profit rose 30.34% to Rs 67.66 crore in the year ended March 2015 as against Rs 51.91 crore during the previous year ended March 2014. Sales rose 23.80% to Rs 821.67 crore in the year ended March 2015 as against Rs 663.69 crore during the previous year ended March 2014.

In an interview with CNBC TV18, Vikram Somany, CMD, Cera Sanitaryware, said that compared to last year the orders for the company were less due to which the growth for the last quarter was 15 percent but annual growth was 24 percent.

The company has cut down cost and brought in more efficiency that has led to 30 percent of bottomline growth which they believe to be more than expectation. The topline growth for the quarter was around 15 percent.

The EBITDA margins in Q4 was 14.5 percent compared to 16 percent last year. Giving the reason of decline in the margins, he said, "It was because this quarter we were expecting a bigger turnover and accordingly we had build up stocks but turnover is slightly less, so the EBITDA margin was slightly less but for the whole year it is 15.5 percent".

The company is hopeful to see more orders in this quarter compared to last year with pick up in Swachh Bharat Abhiyan. They are looking at more than 25 percent growth rate for the next year and maintaining bottomline growth at 30 percent.

Presently, the company is not planning to increase the prices. But seeing the increase in demand for building toilets, sanitaryware and ceramic items in the next two-three years, they might increase the price.

Lastly, commenting on the orders from the government under Swachh Bharat Abhiyan, he said, "We do not supply directly. We supply through our dealers and our dealers are getting orders to supply sanitaryware for various toilets and schools and other projects. So there is some demand for it but its not picked up to the level we thought it would".

See more at: https://www.indiainfoline.com/article/news-top-story/cera-sanitaryware-eyes-30-bottomline-growth-in-fy16-vikram-somany-115042400407_1.html