Cera Sanitaryware - Nirmal Bang

- The company posted Q1FY14 result was in-line with market estimates.

- The company's Net Sales increased by 39.9% YoY to Rs. 126.6 crs and down by 19.9% QoQ.

- EBITDA increased by 27.4% YoY to Rs. 19.9 crs and was down by 4% QoQ . EBITDA margin of the company declined by 160bps YoY to 15.7% in Q1FY14 though it was up by 260bps QoQ. The EBITDA margin was down due to the jump in raw-material cost as a % of sales plus high sales contribution from tiles business which is a low margin business.

- PAT of the company increased by 21% YoY to Rs. 11.2 crs and down by 19.8% QoQ. The margin fell by 140bps YoY to 8.8% in Q1FY14 and was flat QoQ. The decline in PAT margin is attributed to the jump in interest cost by 15% and depreciation cost by 29.5% YoY plus jump in tax rate from 33% in Q1FY134 to 34.5% in Q1FY14 and decline in Other income by 12% YoY also contributed in the fall in margin.

- Outlook continues to remain positive. However, the stock has moved up by Rs 100 in one quarter. Any major dip can be used as a buying opportunity.

Source : Equity Bulls

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