CERANSEQ2 FY202617 November 2025

Cera Sanitaryware Limited

7,910words

102turns

10analyst exchanges

1executives

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Management on call

Vikas Kothari

CFO; and Mr. Deepak Chaudhary - VP, Finance and Investor

Key numbers — 40 extracted

1.4%

ort a steady performance this quarter. Our Sanitaryware segment delivered a year-on-year growth of 1.4%, supported by stable demand and continued traction in our product portfolio. While the Sanitarywar

rs,

As indicated in our previous earnings calls, I would like to reiterate that over the past few years, we have continued to strengthen the organization's strategic foundation through sharper brand segme

39%

flows from the real estate sector and sustained construction activity. Project sales accounted for 39% of our topline in Q2 FY '26. We continue to benefit from our strong brand equity, execution reliab

33%

evelopment remain core to our strategy. During the quarter, new product launches contributed about 33% of the overall sales, reflecting our continued focus on keeping the portfolio contemporary and rel

INR 488 crore

e quarter and half year ended 30th September '25. Revenue from operations for Q2 FY '26 stood at INR 488 crore, remaining largely flat compared to INR 490 crore in Q2 FY '25. EBITDA without other income was

INR 490 crore

Revenue from operations for Q2 FY '26 stood at INR 488 crore, remaining largely flat compared to INR 490 crore in Q2 FY '25. EBITDA without other income was at INR 67 crore as compared to the corresponding q

INR 67 crore

emaining largely flat compared to INR 490 crore in Q2 FY '25. EBITDA without other income was at INR 67 crore as compared to the corresponding quarter of the previous year at INR 70 crore. EBITDA margin sligh

INR 70 crore

other income was at INR 67 crore as compared to the corresponding quarter of the previous year at INR 70 crore. EBITDA margin slightly declined from 14.2% in Q2 FY '25 to 13.8% in Q2 FY '26, primarily due to i

14.2%

e corresponding quarter of the previous year at INR 70 crore. EBITDA margin slightly declined from 14.2% in Q2 FY '25 to 13.8% in Q2 FY '26, primarily due to increase in input costs. However, the said i

13.8%

r of the previous year at INR 70 crore. EBITDA margin slightly declined from 14.2% in Q2 FY '25 to 13.8% in Q2 FY '26, primarily due to increase in input costs. However, the said impact is partially miti

INR 33.79

as costs witnessed a slight decrease during the quarter with the weighted average cost standing at INR 33.79 per cubic meter in Q2 FY '26 compared to INR 33.95 per cubic meter in Q2 FY '25. Our costs remain w

INR 33.95

rter with the weighted average cost standing at INR 33.79 per cubic meter in Q2 FY '26 compared to INR 33.95 per cubic meter in Q2 FY '25. Our costs remain well below the industry average, reflecting the ben

Guidance — 20 items

Deepak Chaudhary

opening

“Project sales accounted for 39% of our topline in Q2 FY '26.”

Deepak Chaudhary

opening

“We plan to extend DMS coverage to more dealers in the coming quarters.”

Deepak Chaudhary

opening

“On Senator: We remain firmly on track to achieve our FY '26 flagship rollout target of 45 to 50 stores with 28 stores already operational as on date.”

Deepak Chaudhary

opening

“At present, Polipluz is being distributed through 38 distributors and 650 dealers with a target to expand the network to 100 distributors and 2,000 dealers by March 2026.”

Deepak Chaudhary

opening

“To conclude, Q2 FY '26 underscores stable execution in a soft retail environment, coupled with steady traction in project sales and encouraging strategic progress.”

Archana Gude

“Or do we have to rework the growth guidance, both on topline as well as operating margin front?”

Archana Gude

“Like we have done 2% in H1, we anticipate that H2 will be improving with all the macroeconomic factors being positive.”

Archana Gude

“So we anticipate that we should be ending H2 with something like 10% to 12% of a growth number.”

Archana Gude

“But then that also means we need to slightly reduce our operating margin guidance also?”

Vikas Kothari

“And our understanding is that we will be able to reach the numbers, but we remain cautiously optimistic about the demand recovery, we stated would happen in H2 FY '26.”

Risks & concerns — 8 flagged

With no price revision taken in the current financial year, sales volume have remained healthy, and the apparent decline reflects the base effect rather than any weakness in the underlying demand.

— Vikas Kothari

Praveen, it is very difficult to say, because whether the project size would as a proportion of the total business would be growing or not.

— Deepak Chaudhary

If retail improves, then obviously, this proportion will remain same and then over a period of time, steadily decline to the levels that we anticipate of 35%.

— Deepak Chaudhary

Volume and price mix is very difficult to say in case of Faucetware because both in case of sanitaryware as well as Faucetware because it is a completely mixed basket.

— Deepak Chaudhary

But some idea, would a large part be price, I understand sanitaryware is difficult.

— Jaspreet Arora

Yes, you mean there is a slowdown in discretionary spending?

— Jaspreet Arora

I understand on the variable side, it might be difficult, - there is already inflation and price increase is difficult.

— Jaspreet Arora

Across, you will find that whenever a new player is setting up a plant in sanitaryware, they find it extremely difficult to stabilize because of the fact that rejections are extremely high.

— Deepak Chaudhary

Q&A — 10 exchanges

Congrats on the sequential improvement earnings. I have three questions. Firstly, on full year FY '26 earnings; - in the last earnings call, you guided for high single-digit sales growth and given we have grown just 2% in H1 of FY '26. Is the net sales growth of 13%, 14% doable in H2 FY '26? Or do we have to rework the growth guidance, both on topline as well as operating margin front? Deepak Chaudhary: We continue to be optimistic about the H2 performance. Like we have done 2% in H1, we anticipate that H2 will be improving with all the macroeconomic factors being positive. So we anticipate th

Archana Gude

Sure, sir. But then that also means we need to slightly reduce our operating margin guidance also? Operating margin should be remaining at that region of 14.5% to 15% that we are seeing right now. Typically, because the numbers are smaller in the first half, you will find that operating margins are also slightly lower. Once the numbers improve in H2, which is typically higher than H1 by typically, it is 45% in the first half and 55% of our total sales coming in the second half. So, with improved volumes, the margins automatically improve in the quarter 3 and quarter 4. So, we should continue t

My first question is related to the divestment. So, in the press release, you had mentioned that you have received a consideration of around INR 18.7 crore. So is that booked in the P&L for Q2 or yet to be booked? So Praveen, thank you very much for asking the question. Just to update, as we have already given our financials also, the Company has divested its stake in two subsidiary LLPs i.e Race Polymers Arts LLP and Packcart Packaging LLP. This is owing to the relatively lower business magnitude and limited strategic relevance, and with respect to the focus that we want to develop in our cor

Praveen Sahay

Okay, thank you for that. Second question is related to your guidance of 7% to 8% growth on the overall side. You also mentioned that the retail is a bit slow. And to offset that, you are entering in the project business. Now it is up to 39% contribution from the project business. So, the way forward in the latter year, we will see this contribution to increase further to bring the growth? Praveen, it is very difficult to say, because whether the project size would as a proportion of the total business would be growing or not. Essentially, that is totally dependent upon how the demand revives.

The segment-wise growth rate that you mentioned, just to clarify that sanitaryware registered 1% growth and faucets minus 3%, that was for Q2?

Vikas Kothari

Right. Okay, and what would be, sir, for H1, the similar number? So, if you talk about H1, so in case of H1, Sanitaryware has grown by 0.58%, Faucetware has grown by 3.5%, Wellness has grown by 8.2% and Tiles have grown by roughly 4%. So overall growth in terms of H1 is 2.2%. So, faucets had grown 3%? Yes. 3% plus and despite quarter 2 being negative. So the first quarter growth was very good? Yes. So, you will see the impact in Q3, because like I told, in case of Faucetware, the price increase impact last year was taken because of the rising brass prices. And because of that anticipation, pre

So, just two questions, actually clarifications. Maybe I missed the opening remarks, but you have guided for a 7% to 8% overall topline growth for the full financial year? Or is that just for H2?

Deepak Chaudhary

For the full financial year. And within that, faucets will grow in double digits. Is that understanding right? Correct, yes. Got it. And also, you mentioned that the 2 new brands, Senator and Polipluz will contribute to INR 40 crore, INR 45 crore in H2? Correct. And in terms of gross margin, so why did we see a compression in gross margin this quarter? Gross margins is more or less remaining the same. You will find that across quarters; there will always be a variation of 1% or 2%. But otherwise, it is always in that range of 52% to 55%. The discounts, typically, you will find that the gross m

With respect to the Senator and Polipluz portfolio, while you mentioned that INR 45 crore, INR 50 crore could be seen in the current year. How do we see next 2, 3 years in terms of revenue potential and the scale up in the margin profile as well?

Deepak Chaudhary

In respect of the margin profile, like Senator will have slightly higher margins as opposed to the kind of mix that we are having right now. We expect that it should have margins to the tune of 20% to 22%. Polipluz, we expect it to be slightly higher. It should be in the range of 25%. The kind of volumes and the numbers that we have projected for the next 2 years, like this should be contributing to something like INR 150 crore of turnover from Senator and Polipluz taken together. Right. And what kind of new product launches we have seen in the core category of sanitaryware, faucet for first h

So, I have a few questions about the premium products that we are launching, specifically the Senator brand and Polipluz. Since the Company is transitioning into the premium market segment where 42% to 43% has been the average contribution to the overall revenues. How are we expecting to compete in the segment where we have already established players in the Sanitaryware segment, such as Hindware and some other players as well who specifically cater to the premium category? What is the marketing position of the Company how are we looking to further capture the market in the premium segment? Se

Syed Nawaz

Any marketing burn or any marketing spends, etcetera? Because as you said that we are entering into a new segment altogether, which has not yet been explored by Cera. So are we expecting any marketing burn as well? Like in the first year, like we are talking about, let us say, the two quarters which have gone by and also the H2, the focus would be mostly on the getting the showrooms ready and also more on the acting on the influencers, getting the influencers on board, making them aware about the brand because they are the ones who kind of bring in the consumer and the final decision tilt happ

Sir, I observed that in the sanitaryware category, the competition is quite high, and we see that an entrant who has been restricted to Faucetware has actually started getting traction in sanitaryware. Now does that explain some amount of slowness in our growth? That is my first question. Second, - how the realization of sanitaryware improved in the last 1 year or so? And what is the average realization for sanitaryware for us? So, like you told, in terms of the entrants or in terms of the players who are dealing in Faucetware, they have got an opportunity to come into the sanitaryware segment

Management

Sir, just one clarification. You said your margins will be 14.5%, 15%. This is for the full year, right?

Deepak Chaudhary

Correct, yes. And second thing is in the first half of this year, how much money we would have booked in the P&L with regards to Polipluz and Senator because of expense for the employees? In the current half year, which has ended, the sales have been marginal because it was more about getting the products and the leadership in place. So, the amount of sales in the first quarter is kind of negligible. No, I am asking for expense because you must have hired people, branding expense you have done, how much would that be? See, for the kind of showroom development, which has happened, it is an ongo

Just to clarify, sir, you mentioned this extra income or a one-off income of INR 5.5 crore. So, the PBT of INR 72 crore would become whatever lesser by that much, right? INR 66 crore, INR 67 crore. Is that how to read it, the recurring PBT?

Deepak Chaudhary

The EBITDA without other income is in the range of INR 67 crore as opposed to INR 69.60 crore in the previous corresponding quarter. Transcript of CERA Sanitaryware Ltd. Q2 FY26 Earnings Call And the PBT of INR 72 crore includes this INR 5.5 crore of exceptional income? Yes. INR 5.5 crore. Correct. Yes. It is with other income, correct. Okay, that helps. And just lastly, are there any measures within the cost side, particularly on the fixed side? I understand on the variable side, it might be difficult, - there is already inflation and price increase is difficult. So, on the cost side, because

Thank you, everyone, for attending this call and showing interest in Cera Sanitaryware Limited. Should you need any further clarification or would like to know more about the company, please feel free to reach out to me or to CDR India. Thank you once again for taking the time to join the call. Thank you.

Management

Speaking time

Deepak Chaudhary

Jaspreet Arora

Vikas Kothari

Moderator

Resha Mehta

Arun Baid

Praveen Sahay

Archana Gude

Karan Bhatelia

Syed Nawaz

Opening remarks

Devrishi Singh

Ladies and gentlemen, good day, and welcome to Cera Sanitaryware Limited earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Devrishi Singh rom CDR India. Good morning, everyone, and thank you for joining us on the earnings conference call for Cera Sanitaryware Limited for Q2 and H1 FY '26 earnings, which were announced yesterday. We have with us today the management team comprising; Mr. Vikas Kothari - CFO; and Mr. Deepak Chaudhary - VP, Finance and Investor Relations of Cera Sanitaryware. We will start with brief opening remarks from the management, following which we will open the call for Q&A. A quick disclaimer before we begin.

Deepak Chaudhary

Good morning, everyone. On behalf of the management team of Cera Sanitaryware Limited, I would like to extend a warm welcome to all of you to our Q2 FY '26 earnings conference call. I will begin by sharing a brief update on our operational and strategic progress, following which our CFO, Mr. Vikas Kothari, will take you through the financial highlights for the quarter. In the backdrop of demand environment that remains subdued, particularly on the retail side, we are pleased to report a steady performance this quarter. Our Sanitaryware segment delivered a year-on-year growth of 1.4%, supported by stable demand and continued traction in our product portfolio. While the Sanitaryware segment continued to face headwinds, the pace of contraction moderated compared to the previous quarters. We believe that improving macro fundamentals and policy measures, including the recent GST changes will aid recovery in retail demand over time. As indicated in our previous earnings calls, I would like t

Vikas Kothari

Thank you, Deepak, and a very good morning to everyone. I will now take you through a brief overview of the Company's financial performance for the quarter and half year ended 30th September '25. Revenue from operations for Q2 FY '26 stood at INR 488 crore, remaining largely flat compared to INR 490 crore in Q2 FY '25. EBITDA without other income was at INR 67 crore as compared to the corresponding quarter of the previous year at INR 70 crore. EBITDA margin slightly declined from 14.2% in Q2 FY '25 to 13.8% in Q2 FY '26, primarily due to increase in input costs. However, the said impact is partially mitigated by improved operational efficiency and cost optimization program. Gas costs witnessed a slight decrease during the quarter with the weighted average cost standing at INR 33.79 per cubic meter in Q2 FY '26 compared to INR 33.95 per cubic meter in Q2 FY '25. Our costs remain well below the industry average, reflecting the benefit of our balanced sourcing strategy and operational eff

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