Highlights of the Concall

• The company's registered an impressive performance on all counts – double-digit topline revenue growth attained with improvement in working capital, EBIDTA margin improvement and decent traction in profitability. Cera Sanitaryware has reported a rise of 24% in its net profit at Rs 38.04 crore for the quarter ended March 2019 as compared to Rs 30.61 crore for the same quarter in the previous year. Total income of the company increased by 15% at Rs 418.78 crore for quarter under review as compared to Rs 365.62 crore for the quarter ended March 2018. For the FY19, the company has posted a rise of 15% in its net profit at Rs 115.05 crore as compared to Rs 100.25 crore for the previous year. Total income of company increased 13% at Rs 1,359.24 crore for year under review as compared to Rs 1,203.95 crore for year ended March 2018. The Company reported standalone EBITDA margin at 15.4% (up 140 bps YoY), largely led by lower than expected staff cost and other expenses.

• The Company south/north/west/east India contributed 44%/25%/22%/9% of sanitaryware revenue in Q4FY19.

• The Company has guided the growth trend to follow in FY20E as well. The Company expects ~20% revenue growth in FY20, aided by recent product launches (under brands Senator and Isvea) and sustained growth momentum in allied products (tiles and faucets). Sanitaryware segment is expected to grow at 7-10% in FY20. Further, the company has taken price hike of 4-6% in all the segments in April, 2019.

• The company's has recommended a dividend of Rs. 13/- (260%) per fully paid-up equity share of Rs. 5/- each.

• The Company capacity utilization in sanitaryware and faucets was at 91% and 71% in FY19 respectively. Tiles JVs are currently operating at above 90% capacity utilization. The Company will cater to incremental tile volumes via outsourced manufacturing.

• The Company in tiles is a newer entrant, entering the segment in 2014 with its own plant coming on stream in 2016. The Company expects high single to low double-digit growth of top-line in tile annually in a market size of Rs.14,000 crore, which is just an organised market in tiles.

• For FY19, out of total income of Rs 115.05 crore, Sanitaryware contributed 52.5% of top-line, faucetware 23.5%, wellness 3.5% and tile 20.5%.

• The Company CAPEX plan for FY2020 is Rs.75 crore. The Company plans to spend Rs 7.5 crore in customer touch points, Rs 19 crore for staff colony and curry plant in Mehsana, For automation in faucetware busiess of ~Rs 12 crore, automation in sanitaryware business of ~Rs 28 crore, and - logistic warehousing and IT system is ~Rs 8.5 crore.

• The Company plans to spend 4.5% of topline for Advertisement and brand building for FY20.