Cera Sanitaryware is showing signs of a turnaround. Revenue saw double-digit year-on-year growth of 11% in Q4FY26 and Q3FY26, marking a sharp improvement after several quarters of dull show.
Weak retail demand and stiff competition from smaller manufacturers in Morbi weighed on growth, as their lower cost structures had often made it difficult for organized players like Cera to raise prices or expand margins. But rising gas prices and disruptions across the region are reducing the cost advantage.
“The company expects to benefit from ongoing disruptions in the Morbi cluster due to labour and infrastructure challenges, enabling market share gains supported by adequate inventory, stronger in-house manufacturing capabilities and stable supply availability,” said a PL Capital report dated 11 June, after interacting with Cera’s management.
Plus, retail demand began improving in the second half of FY26, with the trend continuing at the start of FY27. Cera expects sanitaryware volumes to grow 7-8% this year, and faucetware volumes to grow faster at 10-12%. Faucetware is a key growth driver for Cera, contributing 43% of Q4FY26 revenues, and clocking 24% year-on-year growth. Sanitaryware formed 46% of Cera’s revenues and grew by 10.7%.
Backed by strong demand, Cera is expanding faucetware production capacity from 4.3 lakh pieces a month to 5 lakh pieces by FY27-end. It is also building businesses beyond core product categories. Its premium sanitaryware brand, Senator, and polymer-based products brand, Polipluz, could contribute ₹70-80 crore in revenue in FY27, versus just ₹19 crore in FY26.
To offset higher input costs, particularly the sharp rise in brass prices, Cera has recently implemented price hikes of around 12% for sanitaryware and 16% for faucetware. If it can retain these hikes while demand improves, profitability could rise.
Overall, Cera has guided for 18-20% revenue growth and 50-100 basis points of Ebitda margin expansion in FY27 from 13% in FY26, despite higher spending on branding and facing additional wage costs. The company is also evaluating a new greenfield sanitaryware plant, with the first phase of investment estimated at around Rs150 crore.
However, if smaller Morbi manufacturers recover quickly, competitive pressure could return. But if Cera succeeds in holding on to the market share gained during this time, while scaling faucetware, Senator and Polipluz, it could emerge stronger in FY27. The stock has gained 11% over the past month