Cera Sanitary. (CERA)
Slow GrowerFairStock Score: 59/100 — STEADY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹5,872 |
| Market Cap | ₹7,571.93 Cr |
| P/E Ratio | 37.31 |
| ROCE | 22.39% |
| ROE | 15.73% |
| Dividend Yield | 1.28% |
| Profit Growth | -2.7% |
| Debt/Equity | 0.03 |
| Sales Growth | 15.1% |
| Free Cash Flow | ₹243.78 Cr |
| Promoter Holding | 54.41% |
| 52-Week Range | ₹4,461.1 — ₹6,729.95 |
| Sector | Consumer Durables |
| Book Value | ₹1,141.57 |
Strengths
- Near-zero debt with D/E of 0.05 and Altman Z-Score of 4.35 indicate a very strong balance sheet.
- ROCE of 22.39% and ROE of 15.73% show efficient capital use and franchise quality.
- Free cash flow of ₹244 crore provides a solid buffer and supports the 1.33% dividend yield.
- Promoter holding of 54.41% aligns ownership interests with minority shareholders.
Concerns
- P/E of 28.02, EV/EBITDA of 31.76 and P/B of 5.23 are expensive for a company with negative profit growth.
- Profit growth of -9.96% and latest quarter net profit of ₹24 crore on sales of ₹499 crore show margin pressure.
- Price of ₹5,473 offers no margin of safety versus Graham Number of ₹1,962.84; DCF value of ₹442.70 is far below price.
- Sales growth of only 5.33% is modest and does not justify the rich valuation.
AI Analysis
Applying the Graham-Buffett lens, Cera Sanitary is a quality enterprise selling at a price Graham would refuse. The balance sheet is excellent: debt-equity of 0.05, Altman Z-Score of 4.35, and a Piotroski F-Score of 7/9. The business earns a respectable ROCE of 22.39% and ROE of 15.73%, generates free cash flow of ₹244 crore, and promoters own 54.41%. That franchise strength and financial discipline give it a durable niche in Indian sanitary ware. But quality is only half the equation. Profit fell 9.96% in the latest year, and sales grew just 5.33%. The latest quarter shows net profit of only ₹24 crore on sales of ₹499 crore, which is a thin margin. At ₹5,473, the market capitalisation is ₹6,302 crore. That translates into a P/E of 28.02, an EV/EBITDA of 31.76, and a P/B of 5.23. For a slow grower, that is an expensive price. Graham Number is ₹1,962.84 and even using the supplied DCF intrinsic value of ₹442.70, the margin of safety is deeply negative at -148.95%. In Buffett's words, 'price is what you pay, value is what you get' – here I would be paying a rich price for modest near-term growth. I would not buy Cera at this valuation. It is a good business, but not a good investment at this price. I would wait for a meaningful earnings upturn or a lower price that provides margin of safety. Patience, not enthusiasm, is the discipline of a value investor.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer