CeraSanitaryware 1QFY2014RU.pdf 110713

7/28/2019 CeraSanitaryware 1QFY2014RU.pdf 110713

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Please refer to important disclosures at the end of this report 1

Y/E March (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy)Total operating income 127 158 (19.9) 91 39.9EBITDA 20 21 (4.1) 16 27.5

EBITDA Margin (%) 15.7 13.1 258bp 17.2 (152)bp

Adj. PAT 11 14 (20.0) 9 21.2Source: Company, Angel Research

Cera Sanitaryware (CSL) reported strong set of numbers for 1QFY2014. Top line

surged by 39.9% yoy to`127cr, 8.2% higher than our expectation of`117cr. On

operating front, EBITDA grew by 27.5% yoy to `20cr while margins dip by 152

basis point yoy to 15.7% owing to rise in raw material cost. Net profit rose by

21.2% yoy to `11cr, amidst higher EBITDA growth on account of higher tax

expense (35% of PBT) and lower other income.

Expanded capacity and high brand visibility to aid revenue growth

CSL has expanded its capacity of sanitaryware unit from 2.0mn pieces per annum

(p.a.) to 2.7mn pieces p.a. in FY2013 and is planning to expand it further to 3mn

pieces p.a. in FY2014. The expansion will thus enable CSL to en-cash on the

opportunity emerging from the consistently growing sanitaryware demand owing

to factors like urbanization, rising standard of living, changing lifestyle, growing

construction activities etc. Simultaneously, high brand visibility, due to consistent

marketing efforts (marketing cost has grown at 46.3% CAGR over FY2008-13), is

expected to further boost revenue growth going forward.

Outlook and valuation

We expect CSLs consistent marketing efforts coupled with expansion of its

product portfolio (in the tiles segment) to help it post a revenue CAGR of 27.8%

over FY2013-15E to`797cr. The EBITDA and net profit are expected to grow at a

CAGR of 20.5% and 18.3% over the same period to `109cr and `65cr

respectively.The stock is currently trading at a PE of 10.3x FY2015E. We maintainour Buy recommendation with a revised target price of `613, based on a targetPE of 12x for FY2015E.Key financials (Standalone)

Y/E March (` cr) FY2011 FY2012 FY2013 FY2014E FY2015ENet sales 243 319 488 631 797% chg 27.0 31.5 52.8 29.4 26.2

Adj. net profit 27 32 46 54 65% chg 38.4 16.7 44.3 16.7 19.9

EBITDA Margin (%) 18.8 16.7 15.4 14.5 13.7EPS (`) 21.7 25.3 36.5 42.6 51.1

P/E (x) 24.3 20.8 14.4 12.4 10.3

P/BV (x) 6.0 4.8 3.7 2.9 2.3

RoE (%) 27.3 25.5 29.0 26.5 25.3RoCE (%) 25.6 23.2 26.7 25.7 25.0

EV/Sales (x) 2.7 2.1 1.4 1.1 0.8

EV/EBITDA (x) 14.3 12.7 9.0 7.3 6.2

Source: Company, Angel Research

BUYCMP `527

Target Price `613

Investment Period 12 Months

Stock Info

Sector

Net debt

Bloomberg Code

Shareholding Pattern (%)

Promoters 55.5

MF / Banks / Indian Fls 0.1

FII / NRIs / OCBs 18.7

Indian Public / Others 25.7

Abs.(%) 3m 1yr 3yr

Sensex 6.1 12.5 9.7

CSL 19.7 82.8 295.8

19,676

Ceramic products

Market Cap (`cr) 667

Beta 0.3

567/282

Avg. Daily Volume 7,826

Face Value (`) 5

13

52 Week High / Low

BSE Sensex

Nifty 5,935

Reuters Code CERA.BO

CRS IN

Twinkle GosarTel: 022- 3935 7800 Ext: [email protected]

Cera SanitarywareIncreasing brand visibility to be key driver

Result Update | Ceramic Products

July 11, 2013


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Cera Sanitaryware | 1QFY2014 Result Update

July 11, 2013 2

Exhibit 1:1QFY2014 performance (Standalone)

Y/E March (` cr) 1QFY14 4QFY13 % chg (qoq) 1QFY13 % chg (yoy) FY2013 FY2012 % chgTotal operating income 127 158 (19.9) 91 39.9 488 321 52.2Net raw material 55 79 (30.3) 34 62.3 214 124 72.4(% of Sales) 43.5 50.0 37.5 43.8 38.7 52.2

Employee cost 17 16 3.0 13 25.5 58 43 36.3

(% of Sales) 13.2 10.2 14.7 11.9 13.3

Other Expenses 35 42 (16.9) 28 26.3 115 101 14.1

(% of Sales) 27.7 26.7 30.6 23.5 31.4

Total expenditure 107 137 (22.2) 75 42.4 387 267 44.7EBITDA 20 21 (4.1) 16 27.5 101 53 89.3EBITDA Margin (%) 15.7 13.1 258bp 17.2 (152)bp 20.7 16.7 407bp

Interest 1 2 (35.0) 1 15.1 7 4 85.3

Depreciation 3 3 4.5 2 29.2 9 8 19.0

Other income 1 4 (62.9) 2 (11.8) 9 7 31.6

PBT 17 20 (13.1) 14 23.9 94 49 92.8(% of Sales) 13.5 12.4 15.2 19.2 15.2

Tax 6 6 4.1 5 29.2 22 17 28.3

(% of PBT) 34.5 28.8 33.1 23.0 34.6

Reported PAT 11 14 (20.0) 9 21.2 72 32 127.0PATM (%) 8.8 8.8 10.2 14.8 9.9


Exhibit 2:Actual v/s Angel Estimates

Actual v/s Angel's Estimates Actual (` cr) Estimate (` cr) % variationTotal Income 127 117 8.2EBITDA 20 18 10.6EBITDA Margin 15.7 15.4 34bp

Adjusted PAT 11 11 2.5Source: Company

Top-line marginally higher, profits in line with expectation

For 1QFY2014, CSLs top line surged by 39.9% yoy to `127cr, 8.2% higher than

our expectation of `117cr. On operating front, EBITDA grew by 27.5% yoy to`20cr while margins dip by 152 basis point yoy to 15.7% vis--vis our estimate of

15.4%. The dip in margin is attributable mainly to rise in raw material cost by 600

basis points from 37.5% in the same quarter previous year to 43.5% which was

offset to a large extent offset due to reduced other manufacturing expenses

(employee, power and other expenses) by 449bp. Net profit rose by 21.2% yoy to

`11cr, amidst higher EBITDA growth on account of higher tax expense (35%) and

lower other income.


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July 11, 2013 3

Exhibit 3:Revenue growth momentum continues


Exhibit 4:High RM cost offset by fall in other expenses


Investment arguments

Emphasized focus on marketing and high brand visibility

Owing to continuous marketing activities, that has led to greater visibility of the

Cera brand, the advertisement cost for the company has been consistently

moving northwards. Marketing expenses constitute around 16% of the net sales

and have grown at a 46% CAGR over FY2008-13.

Exhibit 5:Marketing expenses moving northwards

Source: Company

CSL intends to widen its reach by opening more retail formats like Cera Style

Galleries which display the complete range of Cera products and Cera Style

Studios which are company-managed touch and feel experience centres.

Currently, CSL has 50 Cera Style Galleries operational pan-India. Both the above

retail formats have been a success as evident from CSLs robust top-line growth.

CSL also had a massive media campaign during the launch of its new re-designed

logo by employing former Miss Asia Pacific turned actress, Dia Mirza, as the

brand ambassador.

65 7

3 82 1

00

91

111 1

28

158

127

27.328.9

37.9 32.840.0

52.055.2

57.6

39.9

0

10

20

30

4050

60

70

0

20

40

60

80

100

120

140

160

180

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)

(`cr)

Revenue ( LHS) yoy growth (RHS)

12

12

14

16

16

18 2

0 21

2

0

18.8

16.016.5

15.917.2 16.5

16.013.1 15.7

0

2

4

6

8

10

1214

16

18

20

0

3

6

9

12

15

18

21

24

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

1QFY14

(%)

(`cr)

EBITDA (LHS) EBITDA Margin (RHS)

21.6

43.3

48.0

11.3

43.4

35.2

0

10

20

30

40

50

60

0

10

20

30

40

50

60

70

80

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

(%)

(`cr)

Advertisement Commssion Dis tribution % change yoy


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July 11, 2013 4

Expansion of product portfolio to complete the package

CSL has announced its entry into the tiles segment which is a logical extension of

its product portfolio, thereby enabling customers to fulfill their entire bathroom

products needs. As per the management, the company is to launch high-definitiondigital wall tiles with matching floor tiles, besides digital polished glazed vitrified

tiles, the manufacturing of which would be completely outsourced. Being

complimentary products to CSLs existing product portfolio, it would be easy to

penetrate these new products into the market, through utilization of the existing

distribution channels. CSL is aiming at a revenue of`20cr from the tiles segment in

the first year of launch itself.

Increased contribution of sanitaryware in total domestic

expenditure

Owing to changing lifestyles, sanitary products are now perceived as more thanbasic necessity. Their role has widened to being status statements; thus

commanding a higher allocation of the spending budgets of individuals. Increase

in disposable incomes of people has been a vital factor supporting the demand for

sanitaryware products.

Also, requirement of personal space and privacy are gaining inevitable place,

subsequently leading to nuclear families. This has led to augmented residential

figures, thereby increasing demand for sanitary products. This trend is expected to

continue providing sustainable demand visibility for sanitary products.

Capacity expansion of sanitaryware

CSL has expanded the capacity of its sanitaryware unit from 24,000MT (2.0mn

pieces p.a.) to 32,400MT (2.7mn pieces p.a.) in FY2013 and plans to further

expand this capacity to 3mn pieces p.a at a cost of `100cr in FY2014. This will

enable the company to tap and cater to the increasing demand for sanitaryware

products.

Exhibit 6:Capacity utilisation of sanitaryware unit


102106

85

90 90

0

20

40

60

80

100

120

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

FY2011 FY2012 FY2013E FY2014E FY2015E

(%)

(`

cr)

Installed Capacity Production Capacity Utilization


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July 11, 2013 5

Financials

Exhibit 7:Key assumptions

Particulars (%) FY2014E FY2015EFinished Goods: SanitarywareInstalled capacity (MT) 36,000 36,000

Capacity utilisation 90.0 90.0

Sales quantity growth 17.0 17.0

Sales value growth 25.2 25.2

Sale Price/ unit growth 7.0 7.0

FaucetwareInstalled capacity (units) 900 900

Capacity utilisation 40.0 50.0

Sales value growth 43.0 37.5

TilesSales value (`cr) 20.0 30.0

Raw MaterialSanitaryware value growth 28.0 29.0

Traded Goods value growth 2.9 3.7

Sandstone/clay value growth 50.6 29.0

Brass Ignots value growth 13.0 13.0


Exhibit 8:Change in estimates

Y/E March Earlier estimates Revised estimates % changeFY2014E FY2015E FY2014E FY2015E FY2014E FY2015ENet Sales (` cr) 630 795 631 797 0.3 0.3EBITDA Margin (%) 14.4 13.6 14.5 13.7 9.7 9.9

EPS (`) 43 51 43 51 (0.4) (0.0)Source: Angel Research

Top-line to grow at 27.8% CAGR over FY2013-15E

Historically, CSL has witnessed a strong top-line CAGR of 36.6% over FY2010-13.

The traction is expected to continue owing to companys continuous marketing

efforts to strengthen the brand and increase the visibility.

With the enhancement in capacity and the recent entry into the tiles segment, net

sales of CSL are expected to grow at a CAGR of 27.8% over FY2013-15E to

`797cr in FY2015E. Sanitaryware contributes ~98% to total sales, which is to

reduce to ~94% in FY2015 owing to increased contribution from the faucetware

and new tiles segments.


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July 11, 2013 6

Exhibit 9:Revenue headed towards north


EBITDA to grow at 20.5% CAGR over FY2013-15E

On the back of strong revenue growth, the EBITDA of the company is expected to

rise from `75cr in FY2013 to `109cr in FY2015E, at a CAGR of 20.5%. The

operating margin is expected to correct from 15.4% in FY2013 to 13.7% in

FY2015E. The dip is mainly on account of rising raw material costs, which the

company is not being able to pass on completely to consumers owing to stiff

competition from cheaply available Chinese substitutes and unorganized domestic

market.

Exhibit 10:Rising raw material cost dents EBITDA margin


243 319 488 631 797

27.031.5

52.7

29.4

26.2

0

10

20

30

40

50

60

0

100

200

300

400

500

600

700

800

900

FY2011 FY2012 FY2013 FY2014E FY2015E

(%)

(`cr)

Net Sales (LHS) yoy growth (RHS)

46 53 75 91 109

18.8

16.715.4

14.5

13.7

0

2

4

6

8

10

12

14

16

18

20

0

15

30

45

60

75

90

105

120

FY2011 FY2012 FY2013 FY2014E FY2015E

(%)

(`cr)

EBITDA (LHS) EBITDA Margin (RHS)


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July 11, 2013 7

Net profit to grow at 18.3% CAGR over FY2013-15E

A robust operating performance is expected to lead the bottom-line to grow at a

CAGR of 18.3% over FY2013-15E to `65cr. However, owing to capex plans and

entry into new avenues, we expect the debt of the company to rise, still placing thedebt equity ratio comfortably at 0.2x times in FY2015E, and interest cost at

manageable levels. Thus the resultant PAT margins are to dip from the current

9.5% to 8.1% in FY2015E.

Exhibit 11:Notable absolute PAT growth


27 32 46 54 65

11.3

10.09.5

8.5

8.1

0

2

4

6

8

10

12

0

10

20

30

40

50

60

70

FY2011 FY2012 FY2013 FY2014E FY2015E

(%

)

(`cr)

PAT (LHS) PAT margin (RHS)


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July 11, 2013 8

Competition

CSL, with a market share of 23%, competes with the market leader - Hindustan

Sanitaryware & Industries (HSIL; ~44% market share) and the unlisted peer Roca

Parryware (~26% market share). CSL with a return on equity of above 25% and

EPS of`51.1 for FY2015E looks attractive vis--vis its competitor HSIL.

Exhibit 12:Peer comparison

Company Year MCAP Net Sales OPM PAT EPS ROE PE PBV EV/Sales EV/EBITDA(` cr) (` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)

CSL FY2014E 667 631 14.5 54 42.6 26.5 12.4 2.9 1.1 7.3

FY2015E 667 797 13.7 65 51.1 25.3 10.3 2.3 0.8 6.2

HSIL* FY2014E 579 2,076 15.3 85 12.6 9.1 6.9 0.5 0.7 4.5

FY2015E 579 2,469 15.3 117 17.8 10.2 4.9 0.5 0.6 3.8

Source: *Bloomberg, Angel Research

Outlook and valuation

We expect CSLs revenue to post a CAGR of 27.8% over FY2013-15E to`797cr.

EBITDA and net profit are expected to grow at a CAGR of 20.5% and 18.3% over

the same period to `109cr and `65cr respectively in FY2015E. At the current

market price of `527, CSL is trading at a PE of 10.3x and EV/Sales of 0.8x on

FY2015E earnings. Considering the expansion and development plans being

undertaken by the company, CSLs returns are expected to rise further and

valuations are likely to become more attractive on a forward basis. We maintainour Buy recommendation on the stock with a revised target price of `613, basedon a target PE of 12x and implied EV/Sales of 1.0x.Exhibit 13:One-year forward PE band


0

100

200

300

400

500

600

700

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

(`)

Price 1.5x 5.5x 9.5x 13.5x


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July 11, 2013 9

Concerns

Risk from un-organized players: The main risk associated in the sanitarywaresegment is from the unorganized and local players. The unorganized

sanitaryware manufacturers enjoy the benefit of nil excise duty and sales tax

and hence their products are ~70% cheaper than the organized sector

products. Increase in excise duties from 8% to current 12% will make products

from organized players more expensive.

Advent of foreign brands in India is also becoming a threat since increased

purchasing power may lead to shift in consumer preferences to bigger brands.

Changes in government policy related to housing construction, imports, etc

are bound to impact the industry.

Further slowdown in the housing segment will impact fresh demand for

sanitaryware.

The company

CSL, a Gujarat based company, is the third largest sanitaryware company in the

organized sector with about 22% market share in India. Apart from sanitaryware

and faucets, CSL also deals in the wellness range, consisting high-end and luxury

bath tubs, steam cubicles, shower partitions and shower panels. Of the total sales

volume, ~55% of its products are being produced in-house while the remaining

45% are outsourced from other parties, including those from China and

Oman. The company has also expanded its brand presence to other related

categories like showers, faucets, PVC cistern seat cover, etc. It entered the tiles

segment recently which is completely outsourced.


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July 11, 2013 10

Sanitaryware industry

The Indian sanitaryware Industry, estimated at around`1500-1800cr, contributes

to ~8% of the worlds sanitary production. In India, the organized market

dominates the high-end products segment but a majority share is still captured by

the unorganized segment in the low-end products segment. The industry has a

sustained growth rate of 12-14% p.a. due to increasing housing demand,

purchasing power and consciousness towards hygiene. India is emerging as the

second largest sanitaryware market in the world and is expected to witness robust

growth owing to following:

Low penetration in Indian sanitation coverage

Considering Indias dense population, its sanitation coverage is only ~40%, which

is considered to be one of the lowest in the world, thus increasing risk of health

hazards and epidemics. According to a recent report by UNICEF, 638 millionpeople in India lack proper sanitation facilities. The government of India is keenly

focusing on improving the level of sanitation in the country by introducing housing

policies, sanitation policies, public toilets schemes, 100% FDI in real estate, etc

which are being termed as some of the major factors contributing for the growth of

sanitaryware market in India. With increasing awareness towards improving public

health, the sanitaryware segment is to enjoy high attention.

Change in lifestyle and awareness in population

Witnessing a paradigm shift in the change in middle and upper class lifestyles in

small but significant ways, rising per capita income, increasing awareness abouthealth and fitness and changing consumer mindsets will drive the demand for

premium sanitaryware products. The concept of making a clean and hygienic toilet

is growing rapidly in those rural areas where a toilet did not even exist until a few

years ago.

Wide exports horizon

Indian sanitaryware products are very competitive because of their low production

cost, and hence exports from India are also increasing every day. Seven foreign

brands like H&R Johnson, Roca and Kohler to name a few, have established their

operations in India.


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July 11, 2013 11

Profit and Loss (Standalone)

Y/E March (` cr) FY2011 FY2012 FY2013 FY2014E FY2015EGross sales 256 336 511 662 835

Less: Excise duty 13 16 24 31 39Net Sales 243 319 488 631 797

Other operating income - - - - -

Total operating income 243 319 488 631 797% chg 27.0 31.5 52.8 29.4 26.2

Net Raw Materials 86 119 214 283 363

% chg 29.6 38.0 79.4 32.2 28.4

Other Mfg costs 15 20 26 34 42

% chg 18.8 34.5 30.2 29.4 26.2

Power 12 16 23 30 38

% chg 94.3 27.6 48.2 29.4 26.2

Personnel 28 43 58 75 95

% chg 21.1 55.7 34.4 29.4 26.2

Other 56 68 92 119 150

% chg 19.4 21.5 34.7 29.4 26.2

Total Expenditure 197 266 413 540 688

EBITDA 46 53 75 91 109% chg 26.8 16.8 40.9 21.6 19.3

(% of Net Sales) 18.8 16.7 15.4 14.5 13.7

Depreciation & Amortisation 7 8 9 12 16

EBIT 39 46 66 79 93% chg 30.8 16.6 44.4 19.9 18.3

(% of Net Sales) 16.1 14.3 13.5 12.5 11.7

Interest & other Charges 3 4 7 8 9

Other Income 5 7 9 8 10

(% of Net Sales) 2.1 2.1 1.8 1.3 1.3

Recurring PBT 36 42 59 71 85% chg 32.9 14.3 41.2 21.1 19.2

PBT (reported) 42 48 68 79 95Tax 15 16 22 25 30

(% of PBT) 36.1 33.9 31.9 31.9 31.9

PAT (reported) 27 32 46 54 65Extraordinary Expense/(Inc.) (1) - - - -

ADJ. PAT 27 32 46 54 65% chg 38.4 16.7 44.3 16.7 19.9

(% of Net Sales) 11.3 10.0 9.5 8.5 8.1

Basic EPS (`) 22 25 37 43 51Fully Diluted EPS (`) 22 25 37 43 51% chg 38.4 16.7 44.3 16.7 19.9

Dividend 4 4 6 7 7

Retained Earning 24 28 40 47 57


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July 11, 2013 12

Balance Sheet (Standalone)

Y/E March (` cr) FY2011 FY2012 FY2013 FY2014E FY2015ESOURCES OF FUNDSEquity Share Capital 6 6 6 6 6Reserves & Surplus 106 133 173 220 278

Shareholders Funds 112 140 180 227 284Minority Interest - - - - -

Total Loans 32 41 55 60 66

Other long term liabilities 5 6 7 9 12

Long Term Provisions 14 17 20 26 32

Net Deferred tax liability 14 14 16 16 16

Total Liabilities 177 217 277 338 411APPLICATION OF FUNDSGross Block 113 132 175 235 295

Less: Acc. Depreciation 35 42 50 63 78

Net Block 78 90 125 173 217Capital Work-in-Progress 6 11 4 8 8

Lease adjustment - - - - -

Goodwill - - - - -

Investments 8 1 1 1 1Long Term Loans and adv. 15 15 21 28 36

Current Assets 132 178 228 261 319

Cash 37 32 40 58 60

Loans & Advances 7 9 10 15 18

Inventory 50 92 94 99 105

Debtors 39 45 83 90 136

Current liabilities 62 78 102 134 170

Net Current Assets 70 99 125 128 148Mis. Exp. not written off - - - - -

Total Assets 177 217 277 338 411


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July 11, 2013 13

Cash Flow Statement (Standalone)

Y/E March (` cr) FY2011 FY2012 FY2013 FY2014E FY2015EProfit Before Tax 42 48 68 79 95

Depreciation 7 8 9 12 16Other Income (5) (7) (9) (8) (10)

Change in Working Capital (9) (18) (18) 16 (19)

Direct taxes paid (15) (16) (22) (25) (30)

Cash Flow from Operations 19 15 29 74 51(Incr)/ Decr in Fixed Assets (14) (19) (36) (64) (60)

(Incr)/Decr In Investments 8 6 (6) (7) (7)

Other Income 5 7 9 8 10

Cash Flow from Investing (1) (6) (34) (63) (57)Issue of Equity/Preference 3 - - - -

Incr/(Decr) in Debt 5 12 18 13 15

Dividend Paid (Incl. Tax) (4) (4) (6) (7) (7)

Others (16) (22) 1 - -

Cash Flow from Financing (15) (14) 13 7 8Incr/(Decr) In Cash 2 (5) 9 18 1

Opening cash balance 34 37 32 40 58Closing cash balance 37 32 40 58 60


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July 11, 2013 14

Key Ratios (Standalone)

Y/E March FY2011 FY2012 FY2013 FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 24.3 20.8 14.4 12.4 10.3P/CEPS 19.6 16.8 12.0 10.0 8.3

P/BV 6.0 4.8 3.7 2.9 2.3

Dividend yield (%) 0.6 0.7 0.9 1.0 1.1

EV/Net sales 2.7 2.1 1.4 1.1 0.8

EV/EBITDA 14.3 12.7 9.0 7.3 6.2

EV / Total Assets 3.7 3.1 2.5 2.0 1.6

Per Share Data (`)EPS (Basic) 21.7 25.3 36.5 42.6 51.1

EPS (fully diluted) 21.7 25.3 36.5 42.6 51.1

Cash EPS 26.1 31.4 43.9 52.5 63.5

DPS 2.5 3.0 4.0 4.5 5.0

Book Value 88.5 110.3 141.9 179.2 224.5

DuPont AnalysisEBIT margin 16.1 14.3 13.5 12.5 11.7

Tax retention ratio 0.6 0.7 0.7 0.7 0.7

Asset turnover (x) 1.9 1.8 2.1 2.3 2.3

ROIC (Post-tax) 19.8 17.4 19.4 19.9 18.7

Cost of Debt (Post Tax) 5.4 6.4 8.8 8.8 8.8

Leverage (x) (0.1) 0.1 0.1 0.0 0.0

Operating ROE 18.2 18.1 20.2 19.9 18.8

Returns (%)ROCE (Pre-tax) 25.6 23.2 26.7 25.7 25.0

Angel ROIC (Pre-tax) 35.8 30.5 32.6 31.5 30.6

ROE 27.3 25.5 29.0 26.5 25.3

Turnover ratios (x)Asset TO (Gross Block) 2.1 2.4 2.8 2.7 2.7

Inventory / Net sales (days) 65 105 70 72 75

Receivables (days) 54 52 62 52 62

Payables (days) 115 108 90 90 90

WC cycle (ex-cash) (days) 50 77 64 40 41

Solvency ratios (x)Net debt to equity (0.1) 0.1 0.1 0.0 0.0

Net debt to EBITDA (0.3) 0.2 0.2 0.0 0.0

Int. Coverage (EBIT/ Int.) 14.4 11.4 9.3 10.1 10.9


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Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliablesources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as thisdocument is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any wayresponsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report .Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannottestify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.While Angel Broking Pvt. Limited endeavours to update on a reasonable basis the information discussed in this material, there may beregulatory, compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Angel Broking Pvt. Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking

or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or

in the past.

Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from

or in connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to thelatest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates mayhave investment positions in the stocks recommended in this report.

Disclosure of Interest Statement Cera Sanitaryware

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)

CeraSanitaryware 1QFY2014RU.pdf 110713

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