Thread by @TYMFinance

Cera Sanitaryware conducted the conference call for Q3 FY22:

Here are the concall highlights:
🧵👇

Business Updates:

• Demand remain robust and mgmt expect the demand to remain robust for medium term.
• Home Upgradation market is also going robust.
• Dealership & Vendors market is growing well.
• Freight Rate: 7K $ per container. These are creating impact in export.

Domestics Market:

• Export market got impacted due to freight cost, however domestic market is showing good demand growth.
• Tiles business is still an outsourcing business and there will remain small part of business as of now.

Revenue Share:
- Sanitaryware: 53% (47% on YoY)
- Faucetware: 35%. (52% on YoY)
- Tiles: 10% (-46 on YoY)
- Wellness 2% (- 4% on YoY)

Value Split:
Sanitaryware
- Entry Level: 29%
- Mid Level: 13%
- Premium: 57%

Facuvetware
- Entry Level: 30%
- Mid Level: 47%
- Premium: 23%

Price Hike

Sanitaryware:
- 3-5% in Aug 20
- 5-7% in Feb 21
- 4% in August 21
- 10% in Nov 21
Total price hike: 26%

Faucetware:
- 8-10% in Feb 21
- 10% in Aug 21
- 5.5% in Dec 21

• Price Hike by Cera is as per the increase in RM cost with certain time lag.

Raw Material:

• On Sanitaryware, key items such as China Clay, PoP etc which constitutes 95% of RM price rise was 1%. This create niche of Cera in procuring RM.
• High reliance on renewable energy helped maintaining cost, as 90% of energy is procured from renewable source.

Gas prices Rise:
- GAIL price: Increase from 9.5Rs cubic mt. to 13Rs. 44% of gas supply.
- Sabarmati, BPCL, GSPC: 45Rs to 70Rs. 55% of gas supply

• Cost of corrugated boxes has increase by 3%.

Capacity Utilization:
- Sanitaryware: 103%
- Faucetware: 99%

Outsourcing:
- Sanitaryware: 59% (Manufacturing: 41%)
- Faucetware: 55.5% (Manufacturing: 45%)

• With focus on optimum production, inventories are expected to rise in order to serve customer at viable price.

Other:

• Expanding the dealer networks as mentioned in image
• Q3 Inventory Days remain 66.5 days (53 YoY)
• Net Working Capital Days 60.5 days (61 YoY)
• Cash increased too 523cr compare 403 cr in Q2
• FY22 CAPEX Budget: 17.2cr (6.7cr in Sanitaryware, 4.4 cr in Faucetware)

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