scorecardresearchCera Sanitaryware jumps 7.5% to hit a record high; Up 19.7% this month

Cera Sanitaryware jumps 7.5% to hit a record high; Up 19.7% this month so far

Updated: 20 Feb 2023, 01:38 PM IST
TL;DR.

Maintaining their bullish trend, Shares of Cera Sanitaryware climbed 7.52% to hit an all-time high of 6,398. apiece. Since its Q2 announcement on February 02, the stock has soared from 5,343 to its current level of 6,398, generating a fabulous return of 19.74%.

Following the Q3 performance, domestic brokerage firm, Bonanza Capital has maintained its buy rating on the stock with a target price of  <span class='webrupee'>₹</span>6,724 apiece.

Following the Q3 performance, domestic brokerage firm, Bonanza Capital has maintained its buy rating on the stock with a target price of 6,724 apiece.

Shares of Cera Sanitaryware climbed 7.52% to mark a new all-time high in Monday's trade. The stock has been on a strong bull run ever since the company announced its December quarter earnings on February 02.

In keeping with its upward trend, the stock opened strongly in today's session at 5,966 apiece, up 16 from its previous closing price of 5,950, and it hung up to the same magnitude reaching a new record high of 6,398.

The company, which is a manufacturer of sanitaryware, faucets, and tiles, reported a 30% jump in its consolidated net profit at 57 crore compared to 44 crore in the year-ago quarter.

The consolidated revenue from operations during the quarter stood at 458 crore, growing by 13.36% as against 404 crore in the year-ago period. The total operating profit during the quarter came in at 75 crore, an increase of 12% from 67 crore, while the operating profit margin came in flat at 16% in Q3FY23.

The company's Earnings per Share (EPS) improved to 43.38 in Q3FY23 from 33.25. In the July-September quarter, the EPS stood at 39.

Since its Q2 announcement, the stock has soared from 5,343 apiece to its current level of 6,398, generating a fabulous return of 19.74%. In the last one year, the stock has returned nearly 54%. Furthermore, the stock has risen 205% since its all-time low of 2,091 per share.

Article
Stock price chart of Cera Sanitaryware.

Following the Q3 performance, domestic brokerage firm, Bonanza Capital has maintained its "buy" rating on the stock with a target price of 6,724 apiece. The brokerage believes that Cera has a lot of growth potential considering its strong track record, robust growth metrics, and positive demand outlook.

The brokerage said that the company had delivered a robust quarter driven by a healthy demand environment, which was aided by sustained interest from customers to improve and upgrade their homes.

The Sanitaryware and Faucetware divisions registered a strong growth of 19% and 12% YoY; they made up 54% and 33% of the Q3 FY23 sales, respectively. The SW and FW business segments are seeing increased demand in the residential housing market as well as the home improvement market, it highlighted.

Cera is witnessing a strong momentum in the premiumization of new-age and high-margin products, indicating demand for improved products with better design and features. This also shows their readiness to pay a high price in return for high quality, the brokerage added.

The company has made progress in expanding the production capabilities of its faucetware division, which is expected to be completed well on schedule.

In addition, Bonanza Capital is bullish on the company’s growth potential on the back of its strong trend of premiumization across new-age and high-margin products, focus on SW and FW segments aiding robust growth in performance, innovations in the product portfolio, and strong financial standing enabling sustained growth and expansion.

12 analysts polled by MintGenie on average have a 'strong buy' call on the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

Article
What is EPS
First Published: 20 Feb 2023, 01:38 PM IST