Good morning, everyone, and thank you for joining us on the earnings conference call for Cera Sanitaryware Limited for Q4 FY26 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.

Some of the statements made in today's conference call may be forward-looking in nature, and a detailed note in this regard is contained in the results documents that have been shared with all of you earlier. I would now turn the call over to the management for their opening remarks.

Thank you, and over to you, Deepak.

Thank you, Devrishi. Good morning, everyone, and a warm welcome to you all for joining us for the Q4 and full year FY26 earnings conference call of Cera Sanitaryware Limited.

I will begin by sharing a brief overview of our operational and strategic developments during the quarter, following which our CFO, Mr. Vikas Kothari, will take you through the financial performance in greater detail.

During the quarter, the company delivered an improved performance with revenues growing in double digits at 11.4% on a year-on-year basis. Sanitaryware and faucetware accounted for 46% and 43% of the revenues, respectively, during the quarter.

This performance further builds on the early signs of recovery that we had started witnessing from Q3 and reinforces our confidence that demand conditions are gradually improving. Importantly, this improvement is being led by our core product categories, where we are seeing relatively better traction given our strong positioning in the mass and mid segments.

From a broader perspective, the underlying drivers for the building material sector continue to remain supportive. We are seeing a more balanced recovery across segments, with traction in both urban markets and select Tier 2 and Tier 3 regions.

This is encouraging for our core product categories as demand conditions continue to stabilize. During the quarter, we implemented a calibrated price revision across faucetware and sanitaryware, effective from March 1st, primarily to offset the increase in input costs, particularly in brass.

Going forward, we expect continued volatility in key input prices, including metals and energy costs, over the near to medium term. While these pricing actions have been undertaken in a measured manner, we continue to maintain a balanced approach, keeping in mind both margin protection and market competitiveness.

Pricing decisions will remain dependent on movements in input costs and overall demand conditions. On the margin front, we have continued to see some pressure during the quarter with margins remaining below our normal range, largely on account of higher input costs as well as on account of continued trade discounts.

We have already compensated for the higher costs by increasing prices in both sanitaryware and faucetware segments. As operating conditions stabilize, we expect to progressively regain better control over discounts, which should support a steady improvement in margins over time.

The company has identified certain focus markets, mainly the Northeast, West Bengal, Uttarakhand, Bihar, Tamil Nadu, Madhya Pradesh, Jharkhand, Goa, Chhattisgarh, and Odisha, as a part of its growth strategy initiated some time ago. Continuous efforts undertaken across these regions to strengthen distribution and market interventions have contributed meaningfully to the growth achieved by the company so far.

From a portfolio perspective, FY26 has been an important year in strengthening our overall brand architecture, particularly through our initiatives under Senator and Polyplus. Both brands have made steady progress during the year, with key building blocks now largely established across product portfolio, team structure, distribution, and market presence.

Under Senator, we have successfully expanded our retail footprint with 40 flagship stores operational during the year and are targeting to scale this up to 60 stores by next financial year. Under Polyplus, we have onboarded 102 distributors and 1,120 dealers—1120 dealers—during FY26, with a target to expand the network to 200 distributors and 2,000 dealers by the end of FY27.

These initiatives are currently in the investment and brand building phase, where the focus remains on strengthening positioning, expanding reach, and building long-term brand equity. Given the nature of this phase, we expect the outcomes to play out progressively over time, with a more visible contribution to growth as these initiatives scale up.

With the foundational elements now largely in place, our focus will increasingly be on strengthening execution and driving progressive scale-up over the coming periods. Backed by a strong leadership team and relevant industry experience in building established brands, we remain confident about the long-term potential of these initiatives.

At the same time, as we continue to invest in these emerging brands, the core Cera brand remains central to our growth strategy and continues to be the primary driver of volumes and overall business performance. As mentioned earlier, we are seeing improved traction in this segment, supported by gradual recovery in retail demand as well as continued momentum in the project business.

Cera Luxe is also gradually strengthening our presence in the premium and contemporary segment, supported by an expanding product portfolio and improving market visibility. Given our strong positioning across our core segment, we expect a significant part of the growth going forward to be driven by the core Cera brand, where we have established scale, distribution reach, and strong brand recall.

On the brand and marketing front, we are strengthening our overall communication strategy with a sharper focus on enhancing brand visibility across segments. During FY26, our marketing and publicity spends stood approximately at ₹49 crore, and we expect this to increase in FY27 as we step up our brand building initiatives across key channels.

We are working towards rolling out a series of focused campaigns across digital, social, and on-ground platforms. This will include the introduction of a new brand ambassador, which we expect to announce in the near term, and which we believe will further enhance brand visibility and engagement across the key markets.

Overall, these initiatives are aimed at strengthening our brand positioning and supporting our growth strategy going forward. In addition, we have been strengthening our brand visibility through strategic franchisee and institutional tie-up with leading consumer-facing brands across India.

These include association with well-recognized names such as McDonald's, Tea Post, Conplex, JSW One Homes, Shalby Hospitals, Federal Bank, and other prominent brands across sectors. From a supply side perspective, as most of you are aware, the industry has been witnessing disruptions in parts of the unorganized sector, particularly in Morbi, due to gas availability challenges arising from the ongoing geopolitical situation.

In response to this environment, we are increasingly undertaking internalization of certain sanitaryware product categories, which is expected to enhance supply reliability and strengthen our ability to cater to demand requirements more efficiently. While gas prices remain elevated and are unlikely to ease in the near term, Cera is relatively insulated from these disruptions.

This is supported by our continued gas sourcing arrangement, including supplies from GAIL at relatively subsidized rates, which have ensured operational continuity. In addition, we have been able to effectively service demand through our existing inventory levels and manufacturing capabilities, enabling us to maintain supply in a market where several players have faced disruptions.

This has also provided an opportunity to liquidate inventory and support off-take during the period, leading to improved demand visibility. Overall, while the external environment remains challenging, we are well positioned to navigate the current situation without any material disruption to production or supply in the near term.

At the same time, we continue to closely monitor the situation and remain focused on ensuring operational stability and responsiveness across our network. On the operations front, we continue to focus on improving manufacturing efficiencies and strengthening our supply chain.

In faucetware, we continue to witness strong traction, with operations running at high utilization levels. During March 2026, we manufactured 4.3 lakh pieces, reflecting a healthy demand momentum.

In view of the strong demand visibility, we are undertaking capacity expansion to increase the production capacity to 5 lakh pieces per month with minimal capex outlay of approximately ₹5 crore. The enhanced capacity is expected to become operational from Q4 FY27 onwards.

To summarize, while the near-term environment continues to present certain challenges, we are seeing gradual improvement in demand conditions, supported by a strong market positioning and execution focus. Importantly, we are beginning to see early signs of strengthening across key demand drivers, and as these trends sustain, we expect this to translate into more visible growth momentum over the coming periods.

Our priority remains on disciplined execution, strengthening our operating fundamentals, and building a robust platform for future growth. With a strong balance sheet, diversified product portfolio, and continued investments across brands, channels, and systems, we believe that we are well positioned to navigate the current environment and capture growth opportunities as demand conditions continue to improve over time.

With this, I would like to hand over to Mr. Vikas Kothari to run you through the financials of the company.

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 year ended 31st March, '26.

Revenue from operations for the quarter stood at ₹644 crore as compared to ₹578 crore in Q4 FY25. EBITDA, excluding other income, for the quarter was at ₹98 crore as compared to ₹106 crore in the corresponding quarter of the previous year.

EBITDA margins stood at 15.2% in Q4 FY26 as compared to 18.3% in Q4 FY25. This decline was primarily driven by continued pressure on gross margins, led by elevated brass input cost and higher trade discounts.

Margins were also impacted by pre-operative expenses related to the Senator and Polyplus formats. Gas cost during the quarter remained stable, with the weighted average cost at ₹35.55 per cubic meter in Q4 FY26 as compared to ₹36.03 per cubic meter in Q4 FY25.

During the quarter, gas consumption was sourced 64% from GAIL and 36% from Sabarmati. Overall, gas cost as percentage of revenue stood at 2.3%.

Input costs, particularly brass, continued to remain at elevated levels, while other input costs such as clay also witnessed some upward movement during the period. In response to these sustained cost pressures, the company implemented calibrated price revisions of 4% in sanitaryware and 11% in faucetware towards the later part of the quarter.

These revisions were largely applicable to the retail segment, while project business remained relatively insulated due to pre-booked orders. This approach is intended to balance margin protection with market competitiveness.

For the quarter under review, revenue contributions by segment was broadly as follows: sanitaryware at 46%, faucetware 43%, tiles at 9%, and wellness at 2%. On a YoY basis, sanitaryware revenue grew by 10.7%, faucetware by 24.3%, wellness by 31.2%, while tiles declined by 8.3%.

Our core categories, sanitaryware and faucetware, together accounted for 89% of the total revenues. Capacity utilization during the quarter stood at 60—70% for sanitaryware and 106% for faucetware.

From a product mix perspective, 41% of sales were from premium segment, 38% from mid segment, and 21% from entry-level products. Geographically, Tier 3 cities accounted for 40% of sales, followed by Tier 1 at 36%, and Tier 2 at 24%.

Profit after tax stood at ₹77 crore as compared to ₹86 crore in the corresponding quarter of the previous year. Earnings per share for the quarter stood at ₹59.96 compared to ₹66.36 in Q4 FY25.

On the working capital front, we continued to see improvement across key parameters during the quarter, with inventory days decreasing from 79 days to 71 days, receivables reducing from 37 days to 33 days, while payables stretched from 38 days to 40 days. This resulted in a YoY reduction in net working capital from 78 days to 64 days.

As of March 31st March, '26, our cash and cash equivalents stood at ₹853 crore. On capital expenditure front, the capital expenditure for FY26 remained measured with an outlay of around ₹14.5 crore by end of March '26.

This was largely directed towards routine maintenance along with selective investments towards strengthening our brand presence and retail initiatives. Overall, our financial position remains healthy, supported by a strong balance sheet, disciplined cost management, and prudent working capital practices.

While the operating environment continues to be impacted by input cost pressures, the steps taken during the quarter, including calibrated price revisions and a continued focus on cost efficiencies, position us well to navigate near-term challenges. We remain focused on maintaining financial discipline while continuing to invest selectively in strategic initiatives, and believe this approach should support steady and sustainable performance going forward.

With this, I would like the moderator to open the lines for Q&A. Thank you very much.

Hi, sir, and thank you for opportunity and many congratulations for good set of numbers. The first question is related to the demand.

If I look at that from a Q3 to Q4, and we can clearly see that's the retail has done better in the Q4, and also in the commentary and opening statement you had said that's the retail channel has encouraging recovery and there. How you are going to see in the FY27 the retail, because the retail has been quite a muted for a past few quarters?

Now we started seeing some improvement. How you are going to see the growth in the retail the way forward?

Second thing is on the institution contribution, because institution contribution has also increased in the last 4 years from 32 to 38% with a good growth. Where you see the balance between institution and the retail in the coming years?

Thank you, Praveen. I'll just take you through the journey of how these progress in demand has been over the last couple of years.

If you see, we had entered the phase of sluggish demand from Q3 of FY23 23-24. During that period, the project demand continued to remain strong, but retail had entered into a sluggish kind of a situation.

Since Q3 of the current financial year, we have started seeing the improvement in the retail demand, and we saw this sustaining through Q4 on also. If we see the month of April also, we have seen a good surge in the retail.

It has continued in the current quarter also. We are hopeful that going forward the kind of demand recovery that we have seen in the retail segment should continue in the full year of FY27.

The kind of traction that we're seeing in project, that we find that it has increased from something like 30% what it used to be earlier couple of years back to 35% and then now to something like 39-40%. With the improvement in retail demand, we expect that this percentage should now remain stable.

Going forward, we expect that the proportion of retail and project should now be remaining stable at 60% for retail and 40% for the project business. On an overall growth perspective, we have started seeing improvements in volume, and going forward we expect that there should be good traction in the volume in both the sanitaryware and faucet.

More so in the faucet segment, even in the period where the demand used to be sluggish, we had consistently seen improvements in the faucetware demand. Going forward in FY27, we expect that faucetware should continue to grow at 10 to 12% in volumes, and sanitaryware should be in the range of you can say 7 to 8% in FY27 also.

Okay. That's a 7 to 8% or a 10 to 12% is a volume growth what you are indicating for?

Correct, correct.

Next question is related to the price, because the last quarter also you indicated a 4% in the sanitary and 11% in the faucet, but eventually we indicated that from the March onwards we started seeing the gradual price increase. What challenges basically you had faced, especially in the taking the price hike, because the brass prices has been quite a higher for a last couple of quarters back, but the price hike has been first announced, and now in the March actually has been taken?

One, and the second is related to the prices, how much more, as you had indicated also that's the elevated the brass prices is maintaining, and also the clay prices is increased, how much more price hikes you expected to take to maintain your margin guidance of a 14% around?

You're right that the the input situation has been challenging in the last one quarter or so, especially in light of the geopolitical situation which developed in the month of February. Now, brass prices had started moving upwards even before that, and in the last 3-4 months, it has gone up from something like late 600 to early 700.

From that, it has gone up to something like 800 to 850, which is prevailing at right now. Now, if I see on a year-on-year basis, there would have been an increase of something like 29-30% in the brass prices.

Now, effectively, we have taken a price increase of 11% in the month of March. In the month of April, we had taken a surcharge of 10% in the case of sanitaryware and 5% in the case of faucetware.

Now, again, we have taken a price increase of 8% in the case of sanitaryware and 5% in the case of faucets. We have removed the surcharge and we've gone in for a price increase.

Effectively, over a period of you can say 2 months, we have taken a price increase of 12% in the case of sanitaryware and 16% in the case of faucetware. Now, these prices are only effective on the retail portion, and for the projects, the prices are expected to like as per our norms, they remain stable for the period of 1 year from the time that we it is booked into our system.

On an average, if I assume that projects would be starting and would be completing and there would be a 6-month kind of an average for wherein the new price effect would take place in the case of projects. We can expect this kind of price change to start reflecting in the project business from, let's say, in another 5 to 6 months.

Retail, it has already been implemented and the impact will be visible from the like it is already visible from March, and it will all be visible in Q1 more because it'll be a full kind of a quarter where the price increase has remained effective. Now, in respect of as to how well we have been able to cover our rises in price, you'll find that in case of brass, we have more or less been able to cover the kind of price increases with the kind of price increases that we have taken.

Slight deviation is there. We have had to absorb some kind of price increase in the brass.

Typically, if I if we see if you see, like I had said that the price increase has been 30% over the last 1 year, and if I assume that it constitutes something like 60% of my brass constitute 60% of my cost, the effective impact on my COGS would be in the region of 18%, and I've taken a price increase of 16%, so that is still a kind of on a 2% which is left as a gap between the pricing and the kind of same price increase had cost increase which has happened in the case of brass. That we intend to calibrate by way of discount controls, which we are expecting that now that the demand has started recovering, we'll see better discounts management going forward.

That couple of percentage points that we're still lagging behind the case of price increase should be kind of made up by way of better discount management. In case of sanitaryware, the clay, etc., has increased, but the bulk of the price impact comes in on account of gas.

Like most of the players in Morbi have been severely impacted because of the rise in the kind of kind of rises which have happened in the prices of gas. Also in the month in the quarter coming quarter, we expect that even though Morbi plants have started opening up, typically the first quarter is in the case of sanitaryware a little slow in the case of Morbi because one, especially this will be more so in the current quarter because even there while they have started opening up, most of the labor would have kind of gone back home at the time when the plants were closed, and it will be a gradual process by which the labor would come in and the plant would plants would start opening up again.

Also, that we find that during Q1 it is a monsoon period, and during that period also, you'll find that the production in Morbi in case of sanitaryware remains slow. It will only be a it will take some time beyond Q1 when we can expect that the Morbi would be becoming fully operational in case of sanitaryware.

That is a kind of an opportunity for us because the players who are not having their own kind of manufacturing facility and are sourcing mostly from Morbi, will find it going a little tough unless and until they have built up stocks heavily earlier. We anticipate that the current situation would be playing well for us going forward in Q1 and Q2.

Thank you so much for an elaborative answer, sir. Thank you for that.

The last question from my side is related to the brand, because we had did a lot of investment in the Senator and the Polyplus in terms of the distribution and the product last year. If you can give me some color on how much of the revenue in the FY26 you had generated from these brands and what's our target?

Is there any revision in the target for the revenue for '27?

Okay. In case of Senator and Polyplus, Senator, we generated revenue in the region of ₹10.5 crore in the full year FY26.

In Polyplus, we generated something like ₹8.5 crore. Total, these brands combined generated total revenue of ₹19 crore approximately.

For FY27, we are projecting that Senator should be able to generate roughly ₹40-45 crore, and Polyplus would be in the range of ₹30 to 35 crore.

Total, we can expect that

these two brands taken together should be giving us roughly ₹70 to 80 crore.

With the break-even?

In the current quarter, there was a kind of loss if we take into account the kind of publicity expenses that we have been putting in. Going forward in the FY27 also, we'll have a lot of publicity being carved out for this particular segment, Senator.

If I exclude the publicity expenses, then we'll be making a small profit. If I take in the publicity expenses also, then it'll be maybe not current year, but next year when we start making profits after taking into account all the publicity costs, etc.

Thank you so much, sir, and all the best.

Thank you.

Hi. Good morning, sir.

Sir, my first question is regarding the revenue growth guidance for FY27. Earlier you have mentioned that we are expecting sanitaryware volume to grow at 7% to 8% rate and faucet at 10% to 12% rate for FY27.

Given the price hike which we have implemented in the last 2-3 month period, is it fair to understand that we are targeting sanitaryware revenue to grow at a healthy teen rate and faucetware revenue to grow at more than 20% rate for FY27, sir?

Thank you for asking the question. As you have seen the last year being stressed in terms of different activities, market conditions, geopolitical, and all, within those constrained situations also, we have delivered the number of ₹2,050 crore in terms of the overall revenue.

Going forward, based on how the market demand is doing, we have seen that quarter 3 and quarter 4 has built the confidence in terms of continuity of the upward trend. Basis that, we have estimated in terms of the revenue growth which is going to be there for financial year 20 '27.

With the demand trend continuing to grow upward, we expect the overall growth of around 18% to 20% next year. In this, if I to categorize by segment, in sanitaryware segment, we expect 12% growth, driven by favorable volume impact of 7% and price impact of 5% to 6%, because like Deepak has explained, it is a combination of both project and retail.

Retail will be driven by the price increase, whereas in case of projects, pre-orders will be at the old rate and the new orders will be at the increased rates. Similarly, in case of faucetware, we expect a growth of 18%, which is going to be driven by favorable volume impact of 10% to 12% and price impact of 8%.

Overall, if you see today in terms of how the things are moving and how we have capitalized different scenarios, adverse scenarios into opportunities, we expect that if such trend continues, the overall growth will be between 18% to 20%.

Okay. Secondly, on the margin side in your initial remarks

it was mentioned that Please speak.

Yeah. On the margin side, sir, you have initially mentioned that the trade discount which was going on, it is still continuing.

Just wanted to understand we are seeing good demand recovery in the retail segment and the supply side has also got impacted because of the gas supply disruption. Sir, why we are still continuing with the trade discounts?

No, just to give you an understanding in terms of the margins. If you see for the whole year, keeping aside this recent scenario of gas and all, the margins were stressed, reason for being the trade discounts which were offered to meet out the subdued demand, they were keep on increasing.

With this Q3 onwards, we have seen that because in terms of discounts and all, it is not a process that it can be immediately controlled. It is a gradual journey.

Like we told, discount management will be controlled this year. We have already started taking steps from Q1 onwards, and this will further strengthen in the coming quarters.

As far as margin decline is concerned, the two factors which has largely impacted the gross margin is the rise in the input cost, mainly the brass prices, which has been elaborated how this has gone, and it has gone by 29%, which has now been sufficiently taken care of through the price rise to offset the impact of increased cost. Secondly, the elevated trade discounts.

These trade discounts are again we can correct it in the coming quarters. If you have seen the margins which are in Q4, they have seen an uplift from 10.2% in quarter 3 to 15.2%, and we understand that with the growth which is going right now in terms of the demand aspect, we see that if this trend continues, we will be able to sustain the EBITDA margins at around 14% to 15%.

Okay. Sir, one question was regarding the capacity utilization.

If you can give some sense, what was the capacity utilization of our sanitaryware plant in March and April month? Do you see any disruption in our sanitaryware operation say, in the June quarter period?

What kind of a sanitaryware inventory we were carrying at the end of March '26? What is the status of our greenfield sanitaryware plant, sir?

Regarding the capacity utilization, so as you have rightly told, in case of sanitaryware, in March, we were operating at 70% of our total capacity. In case of faucetware, we were operating at 106% of our total capacity.

Ideally speaking, in case of sanitaryware, in the month of March, we had an advantage in terms of the inventory levels. Adequate inventory levels played a critical role in ensuring uninterrupted market supplies and meeting customer demand during this period.

What has happened is in March, we have taken a decision to close one kiln, which was temporarily shut down to manage the operational efficiency because in March, the visibility was very poor in terms of gas supplies, prices, and all. We have taken this as an opportunity, and since we were having the inventories built up, so that has proved as a favorable part in terms of meeting out the customer demand.

In the month of April also, we have taken the decision to remain closed with one kiln. We will be soon getting operational with the second kiln, and we hope that in terms of the demand and what is there, and there are certain products which we have internalized from Morbi.

I think this capacity, which is running at 70-75%, will further improve in the coming months.

Sure.

Sir. Thank you for the opportunity.

Sir, for this quarter, how far was the growth driven by price hike, and how much was driven by volume for the Q4?

Largely, if you see the success in terms of the growth which is there in this quarter is largely driven by volume. If you see that the growth which is driven by volume, just give you the numbers, largely it is driven by volume growth of 12% and with an improved product mix of 3% to 4%.

However, there was some adverse price impact of 3% because of discounts and all what we discussed. Largely, it is a volume-driven growth for the quarter.

Sir, sanitaryware and the faucetware, sir, how much capacity are you increasing? You mentioned it, but we planned for 6 million, right?

Yeah.

No, just to give you an update in terms of how faucetware is progressing, with the brownfield expansion what we have taken earlier, we have increased our capacity from 3 lakh pieces per month to 4 lakh pieces. Last year was a basically milestone where we have operated to reach out to 4 lakh.

In the month of March, we have completed 4,30,000 pieces per month. With the demand trend going upward, we are further increasing this capacity from 4.30 lakh per unit to 5 lakh per unit by debottlenecking and by putting some efforts within the brownfield setup what we have built earlier with a minimum capex of around ₹4 to 5 crore.

Sir. Understood.

For, sir, our exposure to Morbi, we also have a fair bit of exposure on outsourcing. How much are we exposed to Morbi and say other regions comparatively for our sanitaryware and faucetware requirement?

That outsourcing percentage we always keep on disclosing. I'll just tell you the figures right now also, what is the kind of proportion of outsourcing versus in-house.

In case of sanitaryware, you'll find that the outsourcing proportion in the Q4 was to the extent of 60%, and in the case of faucetware, it was to the tune of 57%—sorry, 46%. 60% for sanitaryware and 46% for faucetware.

Now, in the current scenario, as I was mentioning, that in the Q4, because of the kind of gas price impact which has happened and also the availability of gas which has become constricted in the month of March onwards, we expect that sourcing from Morbi in Q1 of the current financial year would be a little sketchy. That is why it is mostly because of the fact that we have adequate inventories that we'll be able to manage the large portion of Q1 and also some portion of Q2.

Whereas what we have also done is that during this period, we have also undertaken a drive for internalizing the kind of products which we were currently outsourcing from Morbi. Those we are expecting that should be available for sale from Q2 onwards, till which time we have adequate inventories within the company to take care of any demand which is there for these products.

Sir, is the large part of this outsourcing from Morbi only or do we have, as far as I know, there are other suppliers in north and other

In sanitaryware, it's a multiple source, but it is mostly from Morbi. The multiple suppliers mostly from Morbi.

Okay. Okay.

Thank you so much. That's it.

Hi, sir. Thanks for the opportunity.

Sir, first question on inventory. Sir, you mentioned that you have inventory of 1 or 2 quarters, but if you look at our balance sheet, it shows somewhere around 70 days.

I'm assuming that some portion of that could be attributed to raw material cost as well. Can you tell us what is the finished good inventory that we have?

The finished goods inventory as of March 2026 was ₹303 crore as compared to December, which was ₹365 crore. December 2025 was ₹365 crore.

We ended March with ₹303 crore, and at the end of April also, we're in the same region, ₹300 crore roughly we're maintaining currently. Oh,

that is somewhere around one quarter, right, sir?

No, it doesn't function like that because we are also manufacturing. Manufacturing is also continuing right now.

We have certain inventory which is of manufacturing. We have certain inventory which is for outsourcing materials.

As I mentioned earlier, the kind of outsourcing material that we have within the kind of entire kitty is adequate for taking kind of the forecast that we have for the next 2 to 3 months. So 3 months further, we don't anticipate any challenge, and by that time, our internalization drive would start giving us the kind of SKUs which were there from Morbi.

Also, it is not that Morbi is entirely closed. They will have problems and will not be able to give the kind of materials which they were giving earlier, the kind of demand projections which are there, but they are still able to supply the kind of some amount of material which will be coming in from Morbi.

We are comfortable in respect of the entire situation if you see, comfortable in respect of availabilities.

All right. Sir, what I understand is our tiles is also completely outsourced.

Do we see any impact on tiles going ahead in Q1, Q2?

Tiles will be impacted because in the month of March also, later part of March, because most of it is dependent upon outsourcing. We were able to do some amount of sales because some inventory was there with the suppliers, but it is essentially totally driven by outsourcing.

If the plants do not open up and we are not able to start procuring materials from outside, that tiles portion, we expect that during Q1 will be impacted.

Okay. Got it, sir.

Sir, you spoke about higher brand spend in

Good morning, sir. Sir, just wanted to understand if you can throw some light on the strategy for both Senator and Polyplus for next let's say 2 to 3 years, how you want to scale up this business and how the premiumization trend will be a key driver for this?

See, as we have been mentioning in the earlier calls also, that Polyplus will be the primary driver for the entry segment. This will be mostly a kind of brand which will be for the purpose of rural segment and the areas which are more in the Tier 4 nature kind of a situation.

We are already, as I mentioned in my call also earlier, we have set up something like 100 distributors right now with 1,000-plus dealers, and we intend to take it up to 200 distributors and 2,000 dealers in the next financial year. For Senator, the idea would be that it'll be more of a premium and luxury brand, and that is why the concentration is more on opening brand stores, flagship brand stores across the country.

We have already opened something like 40 stores in the current year, and we intend to take it up to 60 in the next financial year. Also, apart from the retail presence, we are wanting to take a strong presence in the project segment also, and we intend to introduce a separate series project range for the Senator brand that will be already in the process and should be there by you can say another couple of months.

Apart from the retail, we'll also be driving strongly in the project segment in the Senator portfolio.

Sure, sir. Sir, after the price hike, are we at a level to which let's say the other brands are, or are we still slightly below them?

Typically, the pricing of Cera has been on an MRP level higher than what other brands have been. In the current situation, we have taken a price increase in line with our own cost structure, the kind of price increases that have happened.

The other branded players have also taken similar price increases. You'll find that the price increase more or less is in line with what others have taken.

It will be slightly you can say more for some brands, slightly less for some brands, but more or less, because this is something which has affected each and every player, you'll find that most of them have taken price increases in the line of you can say 16% to 18% in the case of faucets and 10% to 12% in the case of sanitaryware for most players.

Sir, we are on the same line, right?

On the same lines, yeah.

Thank you.

Hi, morning. Two questions from my side.

One, on this FY27 revenue growth expectation, see, you said sanitaryware will grow 12%, faucets 18%, then I can't understand how will your overall revenue growth be 18% or 20%. What explains the balance?

Yes, regarding this part, say we have given the broad understanding with respect to our major segments, that is sanitary and faucetware. There are other segments also within the pipeline, we have tiles and CC.

Our understanding is that once this Morbi situation, which has now started opening from May onwards, will improve, we have tiles and construction chemicals, they are going to contribute around ₹250 crore, a growth of 20%-plus. With respect to the Senator and Polyplus, our newly introduced brands, they will be contributing around ₹70 to 80 crore.

Overall, if you see in terms of the overall revenue from all these, that will lead to 18% to 20% growth next year.

Understood. The second bit, basically on numbers.

Quarterly employee costs in Q4 are down QoQ. Any reasons that you can attribute, and what should be the quarterly run rate ahead?

The capex number that you estimate for FY27?

I didn't get your first part. You're talking about the employee cost?

The employee costs. ₹59 crore for Q4, I think is down about 1-2% QoQ.

I just wanted to understand if there is anything you want to call out behind the decline.

No, actually what had happened is that typically if you see our expenditure which has been happening on a quarter-on-quarter basis, it has been in the region of ₹65 crore. Q1 was roughly ₹65 crore, Q2 was also ₹65 crore.

In Q3, once the wage code was announced, we had taken certain assumptions that based on the kind of liabilities which will be coming up, there would be an additional expense of something like ₹5 crore, and that is why you'll find that there was an expense of ₹70 crore in the month of in the quarter of Q3. In the current quarter, once we have got a better understanding of the wage code and related laws and how it is going to be implemented, we have taken not only you'll see that there's an exceptional item of ₹10 crore of write-back wherein we had put in something like ₹18 crore in Q3 for gratuity and PL liability, when now we are taking that liability would be only in the region of ₹7.5 to 8 crore, and so that there is a write-back of ₹10 crore coming in as an exceptional item.

Similarly, in the wage expenses also, that during that period, we had provided for certain expenses related to the wage code, which we are now anticipating will not be there. That is why that expense of ₹65 crore, which was ₹70 crore in the Q3, has now come back to ₹60 crore in Q4.

Going forward, we expect that the employee expenses should increase in the range of 10% on the basis of normal wage hikes that and the incremental the kind of salary increases that is normally there. Also, in the case of labor, there might be some long-term settlement which is now pending, which will impact only the labor portion, the wage portion, not the the salary cost.

How much that impact will come will be depending upon the negotiation which happens with the workers, and that impact should start coming in from depending upon when that negotiation actually happens. In respect of the capex program, typically our capex is in the range of you can say ₹28 to 30 crore.

In this particular year, we are anticipating a total capex of something like ₹45 crore. This includes normal capex of roughly ₹25 crore, which we normally typically do on a year-on-year basis.

Roughly ₹5 crore is there for the faucetware expansion. I'm talking about within this ₹30 crore, there is ₹5 crore for faucetware expansion.

Also another ₹15 crore has been budgeted for acquisition of some more office space that will be make planning to do in the current financial year. That will be in the range of ₹15 crore.

Total capex taking everything together, a routine faucetware expansion of ₹5 crore and this office space acquisition of something like ₹15 crore, would be in the region of ₹43.42 crore.

Okay. Thank you.

Sir. Thank you for the follow-up.

Small question from my side. One, you have a ₹853 crore of a cash.

What's the uses way forward? Have you decided for that?

Also,

ideally, I think this is the question which is asked every time. The idea is to communicate that whatever the cash position on which we are sitting, we are equally respecting in terms of distributions also.

This time if you have seen that we have declared a healthy dividend payout, which is now ₹75 per share, almost 1,500% of the face value. That is there.

Apart from that, in terms of the greenfield project, which we will evaluate as we have seen the tractions are coming right now with respect to demand. The right time of start-up of construction of the greenfield will be seen in the coming quarters.

There the greenfield project was initially estimated at around 130 CR, of which land portion has already been purchased, that is 27 CR. Considering the 2 years' inflation what is there, our understanding is when we are going to construct the first phase if we conclude in terms of constructing this year, then it will be costing around 1 150 CR.

These are the current things which are in the pipeline, apart from the capex what we have shown as our routine or some incremental capacity expansion what we are doing. Going forward, we will evaluate the scenarios in terms of how the market is doing, and accordingly, we'll take action in terms of future investments.

So 150 apart from ₹27 crore on the land, which you had already incurred?

Yeah.

Okay. Thank you, sir, and all the best.

Yeah.

Hi, good morning. Am I audible?

We can hear you.

Yeah. Sir, just wanted to understand what kind of launch expenses we've booked for Senator and Polyplus in the current year, and what kind of numbers we can see for next 2-3 years when we want to have a EBITDA of 20-25 crore 20-25% on this portfolio?

In the current year, the expenses in Senator were mostly focused on opening the brand stores. We have spent something like ₹4 crore in the current year because this expansion, etc., has started from, let's say, after 3 months in start of the year.

We have spent something like ₹4 crore over here. In the period going forward, now that stores expansion has mostly happened, like we've opened 40 stores in the current period, we intend to go another 20 in the next year to take it to 60.

Now that we have bought in this space all the infrastructure in place, now we'll also need to spend on the other activities wherein we'll be spending on exhibitions, architects, consultants, catalogs, print media, there'll be some advertising also being done. For the next year, we expect that ₹10 to 12 crore will be going in for the Senator's publicity, etc.

Right. Sir, more of I was referring to the total expense, which includes team building exercise, store opening, and other overhead.

We've had losses in this year. Just wanted to get the broad math right.

The salary expenses for Senator and Polyplus in the current year was in the region of ₹6.5 crore for Senator and ₹3.3 crore for Polyplus. Going forward, we expect ₹8.5 crore for Senator and ₹7 crore for Polyplus, ₹15.5 for both of them taken together.

In publicity, we expect to do something like ₹10 to 12 crore next year. This salary expenses is now going to be constant.

Like this is the kind of as of now the structure has already been set up, and so that amount would now be remaining more or less constant at ₹15.5 to 16 crore. Publicity for the next year is budgeted at 10 to 12, may increase again going forward in FY28.

Right. Thanks.

This year losses were what in the tune of ₹15-16 crore?

This year, the total losses were in the region of ₹7 crore for Senator, and for Polyplus, it was in the range of ₹1.5 crore. The total losses were in the range of ₹8.5 crore.

Thank you. That's it from my end.

Thank you, everyone, for attending this call and for 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. Thanks, and bye.

Thank you.