The board today **re-appointed **S.C. Kothari as the new CEO after the sad demise of ED Vidush Somani.
This person was the CEO of Cera from 1995-2008. He along with the Somanis was intrumental in Cera’s expansion over the years.
Looks like a good fit for the CEO, but what prompted him to leave in the first place ???
Rudra,
Looks like he got retired from the position as he was working for Cera for 23 years.
I have checked his linked in profile -
http://www.linkedin.com/pub/s-c-kothari/b/344/975
It says retired from the position in 2008.
Kushal
Cera came out with yet again strong results with topline growth of more than 50% while bottom line grew at 40%+. Even thoughsligh decrease in margins, else exceptional results in subdued market. Mr.Somany is indicating sales of 500 crores by end of this year, an uphill task indeed.
http://www.thehindubusinessline.com/industry-and-economy/marketing/article3951653.ece
However, article mentions about increase in tiles capacity, which doesn’t make sense, it should be that of sanitaryware.
Now from results, few cautionary things
)- Sales/Inventory has increased, as on 30th september, company is carrying inventory woth 3 months of sales on its books i.e. roughly 25% annual sales. Inventory/sales ratio has increased steadily in past 2 years.
)- Debt is increasing, i.e. debt/equity is approaching 0.5 from more comofortable 0.3 last year. I understand that company is expanding capacity and product range which will mean higher w/c. but still, balance sheet leverage poses its own risks and market history is full of examples where ambitious capacity expansion followed by weakness in demand resulting into distressed balance sheet. Though, I do not think at this stage it is alarming, one must keep a close eye on.
Overall, a very satisfacotry performance. If management walks the talk of achieving 500 Cr turnoverand maintains 10-11% NPM, EPS of 40+ is achievable. IF P/E of 12-13 is assigned, still there is significant upside from current level.
Best Regards
Dhwanil Desai
hi cera, excellent performance indeed. especially when looked in perspective of overall slowdown and the leader HSIL struggling to maintain growth and profits. if they continue to grow at this rate for a few more years(which is very important to watch especially with recent leadership change), this could become the no. 2 player in sanitaryware. this growth has been achieved with the backdrop of weak economic and construction growth. once the overall macro situation picks up, we could have significant tailwinds in place to help the growth. cera has been an amazing wealth creater and could compound at 25-30% over the next few years.
thoughsligh
)-
)- turnoverand
|
Y/E Mar.
|
Revenue
(Rs mn) |
APAT
(Rs mn)
|
APAT
(% Ch.) |
AEPS
(Rs.) |
P/E
(x) |
ROCE
(%) |
ROE
(%) |
P/BV
(x) |
|
FY11
|
2429.5
|
251.9
|
28.9
|
19.9
|
18.3
|
29.5
|
25.2
|
4.1
|
|
FY12
|
3206.3
|
317.9
|
26.2
|
25.1
|
14.5
|
27.7
|
25.4
|
3.3
|
|
FY13E
|
4648.3
|
432.6
|
36.1
|
34.2
|
10.6
|
30.0
|
27.2
|
2.6
|
|
FY14E
|
5810.6
|
549.3
|
27.0
|
43.2
|
8.4
|
30.1
|
26.9
|
2.0
|
Hi Gaurva,
Thanks for the updated report.
Best Regards
Dhwanil Desai
Cera has reported good set of numbers in terms of revenue and PAT growth. However, cash generation remains a bit of concern. In FY 12, Cera generated only 4.7 cr of cash from operations. With PAT of 32 cr, 4.7 cr of cash from operations is pretty bad and main reason has been increased working capital (mainly increased inventory).
For the 6 months of FY 13 also:
Q3/Fy-13 Results out…
Total Income up 55.2% to 128.02 Cr from 82.49 Cr.
EBIDTA up 50.3% to 20.53 Cr from 13.66 Cr.
Net Profit up 51% to 12 Cr from 7.95 Cr.
EBIDTA margin is 16% V/s 16.6% (SQ-12) and 16.6% (DQ-11)
NET Pr margin is 9.4% V/s 9.9% (SQ-12) and 9.6% (DQ-11)
Total Raw material costs as a %ge to Income is 42.3% V/s 42.2% (SQ-12) and 39.3% (DQ-11)
Employee costs to Income is 11.5% V/s 12.4% (SQ-12) and 13% (DQ-11)
Other expenses to Income is 30.2% V/s 28.9% (SQ-12) and 31.2% (DQ-11)
Finance costs to EBIT is 11.2% V/s 10% (SQ-12) and 9.5% (DQ-11)
Tax Rate 33.2% V/s 32.9% (SQ-12) and 35.3% (DQ-11)
9M/Fy-13 v/s 9M/Fy-12:
Total Income up 49.7% to 329.91 Cr from 220.41 Cr (Fy/11-12: 319.39 Cr)
EBIDTA up 45.6% to 54.6 Cr from 37.49 Cr (Fy/11-12: 53.37 Cr)
Net Pr up 43.4% to 32.27 Cr from 22.5 Cr (Fy/11-12: 32.04 Cr)
Reported 9-month EPS 25.5 V/s 17.78 (Fy/11-12: 25.32)
At 1 pm on 10/01/2013, stock trading flat @ 440 on BSE.
kind of falling in love with this company. clear case of management walking the talk. i remember in an interview, the MD mentioned that we would be able to do 500 crores sales for this fiscal which seemed a bit far-fetched then but look at it now. they have already done 346 crors and if they repeat the performance of q3 they would be at 480 crores already. cera has managed to grow at 30%+ for a while now and has been taking market share aware from HSIL. this is a core portfolio pick and should remain that way. would be looking to add on any corrections to 400.
Was trading at 30 DMA today…I have started accumulating at these levels.
cera seems to be declining constantly for past few days… is it a good time to accumulate or should we give it time to settle.
…sad news… i missed reading the initial posts…
Hemant,
Is it a good price to accumulate as it is trading below 50 DMA?
Hello Rajarshi,
I follow Point and Figure technical analysis. Here is the chart and analysis for you:
The stock will form a double bottom at 400 which will act as a strong support.( See 2 O’s in red). The stock has earlier made a double top ( see 2 X’s in green) alongside. This shows the stock has very strong support here. If it breaks the support then it can touch 370. The stock is a sell below 360 where it will break the bullish support line ( drawn in blue).
It is true that the stock is currently trading below the 50 DEMA, however the RSI shows that it is near its oversold level at 30. Chances of the stock moving up from here. Accumulate between 370-400 for a target of 460 in the short term.
Hope you liked my analysis.
Thanks a ton for your analysis…Yes technically it seems that 400 support levels would be very difficult to break…hence i have started accumulating…i followed the same pattern for amara raja when it had fallen to 240-245 levels and looked oversold…I had taken a cue from Hemant and reaped benefits…
Any comments on this news
Ahmedabad-based Cera Sanitaryware Limited, the countryâs third-largest player in the sanitaryware products market, will be making a** capital expenditure of Rs 150 crore** for expanding its manufacturing capacities in the next two to three years, according to chairman and managing director Vikram Somany.
The rolling plan (a plan, which is adjusted according to changing circumstances), will include ramping up the production of sanitaryware from the current 2.7 million pieces to 3 million pieces a year, besides scaling up the capacity of faucets manufacturing from the present 2,500 pieces to 10,000 units a day at its facility in Kadi, Gujarat.
âWe currently have Rs 30 crore in fixed deposits. Given the 50% rate at which the debt-free company is growing, we are hopeful of garnering enough money to fund the expansion through internal accruals,â he told Business Standard.
Relaunching Cera Style Studio, a âtouch-and-feelâ products display outlet primarily targeting institutional sales, in Hyderabad on Sunday, Somany said the company currently had eight Cera Style Studios across the country, and would be launching three such stores â one each in New Delhi, Chennai and Kolkata â by October this year, each with a typical investment of between Rs 5 crore and Rs 10 crore.
The Indian sanitaryware market, which is currently pegged at Rs 2,500 crore, equally shared by branded and unbranded players, is growing at a compound annual growth rate (CAGR) of 15%.
Somany said the company was expecting its revenues to touch Rs 467 crore-500 crore this financial year, as against Rs 320 crore last fiscal, on the back of increasing demand for premium sanitaryware products and the replacement market, which is growing at 18% at present.
Plans plant in Andhra Pradesh
Stating that south India is an important market for the publicly-listed company, contributing about 40% to its overall sales, including 20% from Andhra Pradesh, Somany said Cera was contemplating setting up a manufacturing facility in the state, with an approximate investment of Rs 150 crore.
âThe proposal will be on the drawing board stage until the clouds of political uncertainty (separate Telangana statehood issue) are cleared,â he added.
Looks like the company is growing at a very healthy pace and the growth is mostly driven by faucet sale/expansion. The company is planning to triple its capacity in this segment. Even HSIL is planning to grow in this segment. Would be interesting to find out more about the faucet market and why these companies are aggressively adding capacity. Do you think HSIL might be a good buy at this price as well?
Jwalamukhi Investment Holdings (Ashish Dhawan) has increased its stake in CERA from 6.92% to 7% as per BSE filing…
