Cera Sanitaryware Ltd, conducted their today at 10:30 AM.
"Co. expects to double itself after every year"
Here are the key takeaways π
"Co. expects to double itself after every year"
Here are the key takeaways π
Business Updates:
β’ Macro Outlook and increasing demand drives growth for the company.
β’ Company has been back to pre covid level growth, and mgmt expect overall demand to exceed supply.
β’ Working capital has been improved with improvement in receivable days.
β’ Macro Outlook and increasing demand drives growth for the company.
β’ Company has been back to pre covid level growth, and mgmt expect overall demand to exceed supply.
β’ Working capital has been improved with improvement in receivable days.
Utilization:
- Sanitary ware: 85%
- Faucet ware: 92%
Sales Mix growth QoQ
- Sanitary ware- 62% -48.5 (~-0.5%)
- Faucet ware- 35%- 28.28 (10.49%)
- Tiles- 22% - 20.8 (-6.62)
- Wellness- -10% - 2. (-35.54)
β’ New product revenue contribution was 20%.
- Sanitary ware: 85%
- Faucet ware: 92%
Sales Mix growth QoQ
- Sanitary ware- 62% -48.5 (~-0.5%)
- Faucet ware- 35%- 28.28 (10.49%)
- Tiles- 22% - 20.8 (-6.62)
- Wellness- -10% - 2. (-35.54)
β’ New product revenue contribution was 20%.
Sales Mix Contribution: FY 2021 and decline in share YoY
- Sanitary ware: ~48.5%- (-0.5%)
- Faucet ware: ~30%- (10.5%)
- Tiles: 21%- (-6.6%)
- Wellness: 2% (-35.5%)
Price Hike:
β’ 3-5% price hike in Q1
β’ In Feb Sanitary ware hike was 5-6% and Faucet ware was 6-7%.
- Sanitary ware: ~48.5%- (-0.5%)
- Faucet ware: ~30%- (10.5%)
- Tiles: 21%- (-6.6%)
- Wellness: 2% (-35.5%)
Price Hike:
β’ 3-5% price hike in Q1
β’ In Feb Sanitary ware hike was 5-6% and Faucet ware was 6-7%.
Tiles:
β’ Soluble Salt is now less than 10% of share, which has lower share
β’ GBT sales is 50%+ of share, which has higher margin.
β’ Industry has problem of higher receivable days, hence recently 50% of dealers are added as per cash & cash equivalent.
β’ Soluble Salt is now less than 10% of share, which has lower share
β’ GBT sales is 50%+ of share, which has higher margin.
β’ Industry has problem of higher receivable days, hence recently 50% of dealers are added as per cash & cash equivalent.
Sanitary ware:
β’ 581cr revenue contribution was last 6 month. While all time high revenue is 603cr. Hence adding 16% (100cr) growth is not difficult.
Faucet ware:
β’ 339 cr is the revenue contribution which is also all time high, and adding 50cr more sales is not difficult.
β’ 581cr revenue contribution was last 6 month. While all time high revenue is 603cr. Hence adding 16% (100cr) growth is not difficult.
Faucet ware:
β’ 339 cr is the revenue contribution which is also all time high, and adding 50cr more sales is not difficult.
CAPEX: Spend was 10cr while target was 22cr, while target for this year capex is 26cr
Capex Mix:
- Sanitary ware: 7cr
- Faucet ware: 6cr
- Logistics- 5cr
- Customer Touch point- 8cr
Capex Mix:
- Sanitary ware: 7cr
- Faucet ware: 6cr
- Logistics- 5cr
- Customer Touch point- 8cr
Customer Touch point spend:
β’ Spend is majorly in Southern region (Bangalore, AP, Karntaka), where company is owning its own touchpoint where customer footfall is higher.
β’ Real-Estate is never owned only interiror and products are spend for capex.
β’ Spend is majorly in Southern region (Bangalore, AP, Karntaka), where company is owning its own touchpoint where customer footfall is higher.
β’ Real-Estate is never owned only interiror and products are spend for capex.
Decline in margin:
β’ COGS increase in Faucet ware due to increase in price of RM (brass). Co. didn't increase the price in Q1, as they had inventory and price has been increased this quarter.
β’ Brass is the large factor.
β’ Mould in factory further decrease the margin
β’ COGS increase in Faucet ware due to increase in price of RM (brass). Co. didn't increase the price in Q1, as they had inventory and price has been increased this quarter.
β’ Brass is the large factor.
β’ Mould in factory further decrease the margin
Outlook:
β’ Demand is not an issue right now only issue going is in vendor facility and production side. Demand is growing at steady rate.
β’ First half production was low, however now production is back, and previous sales are expected to recoup in coming quarter.
β’ Demand is not an issue right now only issue going is in vendor facility and production side. Demand is growing at steady rate.
β’ First half production was low, however now production is back, and previous sales are expected to recoup in coming quarter.
Macro Outlook:
β’ Sanitary ware unorganized to organized shift has played out well for industry, as organized players give 10 years warranty. Organized market share is 80%+
β’ Cera gives 10 year warranty in Faucet ware which is working well. 60-65% share is organized.
β’ Sanitary ware unorganized to organized shift has played out well for industry, as organized players give 10 years warranty. Organized market share is 80%+
β’ Cera gives 10 year warranty in Faucet ware which is working well. 60-65% share is organized.
Focus:
β’ In Metro cities many of players already exists and MNC are entering in Metro cities only, hence competitive intensity is high over there.
β’ Cera is now focusing more in Tier 2 t& Tier 3 city.
Sales Mix in Q4:
Tier 1: 31% share
Tier 2 14% share
Tier 3: 56% share
β’ In Metro cities many of players already exists and MNC are entering in Metro cities only, hence competitive intensity is high over there.
β’ Cera is now focusing more in Tier 2 t& Tier 3 city.
Sales Mix in Q4:
Tier 1: 31% share
Tier 2 14% share
Tier 3: 56% share
Italian Marble:
β’ Co. has tied up with Italian co. where Cera neither has to produce nor operate the business.
β’ Cera takes upfront revenue from customer and then order is send to co. Hence cash flow+ segment.
β’ Revenue contribution is very low. Co.will think when share is 10%
β’ Co. has tied up with Italian co. where Cera neither has to produce nor operate the business.
β’ Cera takes upfront revenue from customer and then order is send to co. Hence cash flow+ segment.
β’ Revenue contribution is very low. Co.will think when share is 10%
Advertisement:
β’ Previously spend was 4% of revenue and now there no such fixed expense.
Cash: 479 cr. Increase in cash has given significant improvement in ROCE.
β’ Previously spend was 4% of revenue and now there no such fixed expense.
Cash: 479 cr. Increase in cash has given significant improvement in ROCE.
For more discussion on Equity research and OI analysis
Subscribe to our YouTube channel π
Link π: youtube.com/c/TheTycoonMinβ¦
Subscribe to our YouTube channel π
Link π: youtube.com/c/TheTycoonMinβ¦
β’ β’ β’
Missing some Tweet in this thread? You can try to
force a refresh
γ
