homeearnings NewsCERA Sanitaryware plans expansion; price hike of 8 12% for sanitaryware in Nov on the cards
CERA Sanitaryware plans expansion; price hike of 8-12% for sanitaryware in Nov on the cards
CERA Sanitaryware has taken two price hikes this year, and a third is coming on November 15, said Ayush Bagla, Executive Director. The company posted a good set of Q2FY22 numbers.
CERA Sanitaryware posted a good set of second-quarter numbers. Year-on-year (YoY) revenues were up 24.4 percent at Rs 403.25 crore compared to Rs 324.1 crore, EBITDA was up 50.2 percent at Rs 61.59 crore compared to Rs 41.01 crore. Margins too were up at 15.5 percent against 12.7 percent in the same quarter last fiscal.
Throwing more light on the quarter gone by and the outlook going forward, Ayush Bagla, Executive Director of CERA Sanitaryware, said the company's top-line has risen from Rs 321 crore in Q2 last year to Rs 400 crore this year. About 53-54 percent of the business has come from sanitary ware, 36 percent from faucets and about 12 percent from tiles, he added. So, margin expansion has taken place because of top-line growth and pricing power, he pointed out .
The company has taken two price hikes already this year, and a third is coming on November 15, Bagla said, adding that if all these are added, it works out to a price hike of about 22 percent in sanitary ware and about 20 percent in faucet. The third price hike would be between 8 and 12 percent for sanitary ware and allied and polymer-based products.
Bagla said that brass prices moved up 2-3 percent in Q2 and in Q3, but the company has been able to absorb that quite well. “Pricing power of the brand design, and leadership are the things which stand out. So, the numbers that you see are just a reflection of the manufacturing excellence and design excellence,” Bagla said.
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Talking about capacity utilisation and expansion, he said, in Q1 of last year, the company acquired some land next to their faucet ware manufacturing facility and is looking to expand, but nothing has been finalised or taken to the board as yet. However, very soon there would be a need for expansions in both sanitary ware and faucet ware. In sanitary ware, the company has spent more time and resources in automation and debottlenecking of the existing manufacturing facility, he said.
“We are at 90 percent capacity utilisation in faucet ware and about 97 percent in sanitary ware, which is why almost 50 percent of the top-line is bought out products from vendors and 95 percent of our sales are Made in India products,” said Bagla.
For the full interview, watch the video
(Edited by : Thomas Abraham)
First Published: Oct 26, 2021 4:27 PM IST
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