CERA Sanitaryware reported a healthy 11.1% top-line growth in Q3 FY’26, continuing sequential recovery seen in Q2. While EBITDA margin dipped to 10.2% due to input costs (brass) and increased promotional spending on new brands (POLIPLUZ, Senator), management expects margins to revert to the 13%-14% range in Q4. The company has announced calibrated price increases in Faucetware (11%) and Sanitaryware (4%) to counteract cost pressures.
Q3 FY’26 Performance Review
Cera Sanitaryware Limited provided the transcript for its Q3 FY’26 Earnings Conference Call held on February 5, 2026. Management highlighted a significant rebound in sales, with revenues growing by 11.1% during the quarter, following a 5% to 6% growth in the previous quarter, signaling a steady strengthening trend.
Operational Highlights and Capacity
The company noted strong market traction driven by a gradual revival in market conditions. Capacity utilization stood healthy at 102% for Faucetware and 82% for Sanitaryware. The product mix showed 44% from the premium segment, 35% from mid-segment, and 21% from entry-level products. Geographically, Tier 3 cities contributed the highest share at 41% of sales.
Financial Metrics Under Pressure
Revenue from operations for the quarter reached INR499 crore, up from INR449 crore in Q3 FY’25. However, EBITDA without other income decreased to INR51 crore (from INR59 crore YoY), resulting in an EBITDA margin of 10.2%, down from 13.2% in Q3 FY’25. This decline was attributed primarily to increased trade discounts and elevated brass input costs. Profit after tax stood at INR24 crore compared to INR46 crore in the previous year’s quarter.
Input Costs and Pricing Strategy
Management detailed that input costs, particularly brass, have seen significant increases, with the average price rising sharply in January. In response, CERA announced calibrated price increases: 11% for Faucetware and 4% for Sanitaryware, effective on March 1st, designed to balance margin protection with competitiveness.
Regarding new launches, Senator and POLIPLUZ together generated sales of approximately INR7 crore to INR8 crore in the first nine months. The projection for the full year for these new brands has been revised downwards from INR40 crore to around INR20 crore due to store readiness timelines.
Margin Outlook and Cost Management
Management assured investors that the margin pressures were due to a one-off phasing impact related to publicity, CSR, and pre-operating expenses for new brands. They confirmed an expectation to return to historic margins of 13% to 14% in Q4 and anticipate margins stabilizing between 16% to 17% in the second half of the next fiscal year, assuming stable costs.
Digital Initiatives and Working Capital
Key ongoing initiatives include the rollout of the dealer management program to improve inventory visibility and the planned transition of the retailer loyalty program to a fully automated system. Working capital days improved year-over-year, decreasing from 81 days to 79 days, supported by reduced inventory days (84) and receivables days (33).
Future Growth Drivers
Management expressed confidence that the structural recovery is sustainable. They anticipate maintaining double-digit growth momentum in Q4 and the upcoming fiscal year, supported by recent product introductions and improvements in previously lagging micro-markets, such as UP and Bihar/Jharkhand, which are now showing reversals in sales trends.
Capacity Expansion Update
Regarding the planned new Sanitaryware facility, the land purchase is complete, but construction commencement is deferred, pending market review at the end of Q4. Management stated that internal efficiencies and a shift in product mix (taking outsourced items in-house) have significantly increased the current plant’s output capabilities, providing scope for growth without immediate greenfield investment.
Source: BSE
