Multi Baggers

Hem Securities

5.30 AM Jan 1st 1970

Cera Sanitary

BSE ID : 532443 NSE ID : CERA

RECOMMENDED PRICE 378.00

PEAK FROM RECO 9782.25 2,487.90%

CURRENT PRICE 7300.00 Resource id #18

Cera Sanitaryware is a pioneer in the sanitaryware segment in India. It is the third largest company in the organized sector with over 20% market share.

Cera Sanitaryware

Cera Sanitaryware is a pioneer in the sanitaryware segment in India. It is the third largest company in the organized sector with over 20% market share. Cera has been steadfastly moving towards its mission of becoming a total bathroom solution company. It is the first sanitaryware company to use Natural gas.

The company has registered sharp numbers for the quarter ending September 2012. The company has achieved yet again impressive growth with a figure of Rs. 111.38 Cr. being 52% smart increase in top line as against Rs.73.29 crores in the like quarter last year. Operating profit skyrocketed about 58% at Rs.18.43 crore vis-a-vis Rs.11.70 crores y-o-y. The increase in business was due to increased demand. Despite the market vagaries, the company has registered a 44 per cent rise in its profit after tax (PAT) at Rs 11.03 crore for the quarter ended 30 September, 2012 as compared with Rs.7.65 crores in Q2FY12. EPS stood at Rs.8.72 as against Rs.6.05 clocked in quarter ended September 2011.

With a CAGR of 25 per cent over the last five years, the company is expecting to increase its turnover from Rs 319 crore in 2011-12 to nearly Rs 500 crore this fiscal. The company enjoys 75 percent share in Gujarat's sanitaryware market.

It is the first sanitaryware company to implement ISO 9002 and ISO 14001 certifications for Quality Management Systems and
Environment friendly Manufacturing systems.

Valuation

With strong presence in throughout the nation, capacity expansion plans, strong marketing initiatives capturing improved demand and increasing awareness for sanitation, Cera's growth prospects looks attractive. We believe Cera Sanitaryware Ltd. is trading at an attractive valuation at 11.84x and 10.21x of FY13EPS of Rs.31.92 and FY14EPS of Rs.37.02. We initiate a 'BUY' on the stock with a target price of Rs.480 (appreciation of about 27%) with the medium to long term investment horizon.

For full report, Click on the attachment below

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Cera Sanitaryware.pdf