Buy Cera Sanitaryware, target price Rs 5657: ICICI Securities

ICICI Securities has buy call on Cera Sanitaryware with a target price of Rs 5657. The current market price of Cera Sanitaryware is Rs 4672.85. Time period given by analyst is one year when Cera Sanitaryware Ltd. price can reach defined target.

Cera Sanitaryware Ltd., incorporated in the year 1998, is a Mid Cap company (having a market cap of Rs 6080.18 Crore) operating in Building Materials sector.

Cera Sanitaryware Ltd. key Products/Revenue Segments include Building Products, Other Operating Revenue, Export Incentives and Sale of services for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 396.58 Crore, down -4.15 % from last quarter Total Income of Rs 413.75 Crore and up 68.93 % from last year same quarter Total Income of Rs 234.75 Crore. Company reported net profit after tax of Rs 39.87 Crore in latest quarter.

Investment Rationale
CRS’s Q1FY23 performance was better than estimates, hence it increases PAT estimates by 2%/1% for FY23E/FY24E. We continue to like the company for its comprehensive product portfolio, wide distribution reach, strong brand and robust balance sheet. Maintain BUY with a revised Mar’23E target price of Rs5,657 set at unchanged multiple of 32x P/E FY24E. Key risks: 1) demand slowdown in housing sector; and 2) continued higher input prices, which may dent demand / profitability.

Promoter/FII Holdings
Promoters held 54.48 per cent stake in the company as of 30-Jun-2022, while FIIs owned 18.34 per cent, DIIs 10.6 per cent.