Automobiles: Channel check takeaways Dismal demand climate for MHCVs. CRS: Demand trends improving. IT Services: Stellar outsourcing show- a positive readthrough for Indian IT

Key takeaways from our interaction with the management of Cera Sanitaryware (CRS).

Cera Sanitaryware's (CRS) Q1FY21 consolidated revenue declined 46% YoY, bettering our estimate of a 62% drop.

Building material companies under our coverage are likely to post a dull Q4FY20 as tough market conditions have been further accentuated by the lockdown in end-March, thus taking a toll on volumes.

Demand environment anaemic but margins steady

We present key takeaways from our meeting with the management of Cera Sanitaryware (CRS).

We recently hosted investor meetings with the Cera Sanitaryware (CRS) management.

Cera Sanitaryware (CRS) reported tepid Q2FY20 standalone revenue of Rs 3.3bn (1.1% YoY), with the sanitaryware segment contracting 9% YoY.

We recently met the management of Cera Sanitaryware (CRS) and present our key key takeaways.

Cera Sanitaryware (CRS) reported subpar Q1FY20 standalone revenue of Rs 2.7bn, down 4.8% YoY, with the sanitaryware segment declining 12.7%.

We recently met Container Corp of India's (CCRI) management in Delhi. Key takeaways: (1) revenue target of Rs 250bn by FY25/FY26 (Rs 7bn in FY19), (2) IR's advance freight scheme likely to be EPS-accretive, (3) completion of Rewari-Palanpur stretch of WDFC now expected by end-FY20, (4) coastal shipping operations to be launched on the east coast, and (5) warehousing area...

Cera Sanitaryware (CRS) reported above-estimated revenue growth of 14.5% YoY in Q4FY19 driven by 30%/22% growth in the tiles/faucet segments. Operating margins expanded 132bps YoY to 15.4% primarily due to lower other/employee expenses 217bps/118bps YoY, resulting in EBITDA/PAT growth of 25%/24% YoY. Management has guided for 13-14% revenue growth and ~15% margins in FY20. We increase FY20-FY21 PAT estimates by 4-5%...

We met the management of Cera Sanitaryware (Cera). The company primarily has businesses in sanitaryware, faucets and tiles. It also caters to other product categories viz. wellness, water heaters, etc. With 54% contribution to the topline, sanitaryware is the largest revenue-generating business for the company, followed by faucets (23%) and tiles (20%). Cera follows an asset-light JV model across business segments, with inhouse manufacturing facilities for high-value sanitaryware & faucets products while low-value products are outsourced. The company has a network of ~14,000 dealers and retailers across India. Revenues grew at...

Key takeaways from our meeting with the management of Cera Sanitaryware (CRS): (1) blended revenue growth of 12-13% going ahead with sanitaryware growing at 10-12%, tiles at ~10%, and faucets at 15-17% led by wider distribution; (2) blended operating margins sustainable at ~15% backed by sanitaryware at ~20%, with tile/faucet margins guided at ~10%/12-14%. We prune PAT estimates on below-expected tile growth guidance and revise our Dec'19 target price to Rs 3,120 (from Rs 3,255)....

Key takeaways from our meeting with the management of Cera Sanitaryware (CRS): (1) blended revenue growth of 12-13% going ahead with sanitaryware growing at 10-12%, tiles at ~10%, and faucets at 15-17% led by wider distribution; (2) blended operating margins sustainable at ~15% backed by sanitaryware at ~20%, with tile/faucet margins guided at ~10%/12-14%. We prune PAT estimates on below-expected tile growth guidance and revise our...

Cera Sanitaryware (Cera) reported 3QFY19 revenue growth of 10% YoY at Rs3,188mn, which was largely in line with our as well as Bloomberg consensus estimates. EBITDA at Rs460mn (+13% YoY) was 9% above our estimate, but slightly below Bloomberg consensus estimate. EBITDA margin for the quarter was 14.4% (+40bps YoY and +60bps QoQ), 80bps above our estimate. Margins improved because of lower gas price and a favorable sales mix. PAT increased 23% YoY to Rs284mn, 15% above our estimate and 2% above Bloomberg consensus estimate. Price hike (between 3% to 5%) during October 2018 helped in improving gross...

Cera Sanitaryware (Cera) reported 2QFY19 revenue growth of 12% YoY at Rs3,310mn, which was 3%/16% below Bloomberg consensus estimate/our estimate, respectively. The company reported EBITDA of Rs456mn which was in line with Bloomberg consensus estimate, but 13% below our estimate. EBITDA margin for the quarter was 13.8%, 50bps above our estimate, but down 180bps YoY, which was largely expected because of the rise in gas costs. PAT increased 3.2% YoY to Rs281mn, in line with our estimate and 8% above Bloomberg consensus estimate. In total, Cera presented a decent set of results in a tough quarter which was impacted by Kerala floods and a quick rise in gas costs. The...

Cera Sanitaryware (Cera) reported 2QFY19 revenue growth of 12% YoY at Rs3,310mn, which was 3%/16% below Bloomberg consensus estimate/our estimate, respectively. The company reported EBITDA of Rs456mn which was in line with Bloomberg consensus estimate, but 13% below our estimate. EBITDA margin for the quarter was 13.8%, 50bps above our estimate, but down 180bps YoY, which was largely expected because of the rise in gas costs. PAT increased 3.2% YoY to Rs281mn, in line with our estimate and 8% above Bloomberg consensus estimate. In total, Cera presented a decent set of results in a tough quarter which was impacted by Kerala floods and a quick rise in gas costs. The...

Cera Sanitaryware (Cera) is among the top 3 players in the Indian sanitaryware industry having a stronghold over the mid and premium segments. The company has travelled uphill, grabbing market share from established brands like Hindware (HSIL) and Parryware. Sharp focus on capital employed, high product quality and innovation have been the bedrock of Cera's success. As of today, Cera controls 28% of India's organised sanitaryware market, behind Parryware and HSIL at 33% and 31%, respectively. Recovering from the Goods and Services Tax or GST shock, the company is expected to increase its revenues/EBIT at 15%/23% CAGR, respectively, over FY18-FY21E. In the...

Festive Season Demand Holds Key for Q3FY17E: Cera Sanitaryware delivered healthy Q2FY17 earnings compared to its Q2FY16 YoYbasis. The sales turnover has increased from Rs.1996Mn in Q2FY16 to Rs.2610Mn in Q2FY17 representing 30.8% YoY growth. The variable cost which includes powerand fuel cost gone down almost 46% in Q2FY17 versus Q2FY16, which led to a 10.0% savings in the operational expenses that led to the improvement of the EBITDA by 49.5% on YoY basis in Q2FY17.