Motilal Oswal has issued a Neutral rating on Cera Sanitaryware with a target price of ₹5,607 in its research report dated February 05, 2026. According to reports from Moneycontrol, the brokerage maintains this rating based on 25x Sep'27 P/E valuation despite the company's recent earnings performance.
As reported by Moneycontrol, Cera Sanitaryware (CRS) missed earnings estimates in Q3FY26 despite achieving healthy revenue growth of 11% YoY. The revenue increase was primarily driven by 18.1% YoY growth in faucetware (which contributes 40% to total revenue) and 6.4% YoY growth in sanitaryware (representing 48% of total revenue).
According to Moneycontrol's report, the company faced multiple headwinds that impacted profitability. Elevated brass prices, inadequate price hikes, an increase in trade discounts, high publicity costs, and new brand launch-related costs all contributed to margin compression. EBITDA margin declined to 10.2%, representing a 299 basis points YoY decline and 353 basis points QoQ decline.
As reported by Moneycontrol, despite muted earnings growth expectations, CRS is projected to generate strong free cash flow of over ₹5 billion during FY25-28. The company is expected to maintain a cash surplus of approximately ₹10 billion by FY28, though this could suppress return on equity to around 17%. However, the brokerage notes that high return on invested capital of 45%+ is likely to sustain.
