Cera Sanitaryware Upgraded to 'Hold' by MarketsMOJO Due to Strong Management Efficiency and Attractive Valuation

Cera Sanitaryware, a midcap company in the ceramics/marble/granite/sanitaryware industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This decision is based on the company's high management efficiency, with a ROE of 15.41%, and a low Debt to Equity ratio of 0 times. Additionally, the company has an attractive valuation with a Price to Book Value of 6.8 and is trading at a fair value compared to its historical valuations.
One of the reasons for the upgrade is the high institutional holdings at 28.75%, indicating that these investors have better capability and resources to analyze the company's fundamentals. With a market cap of Rs 9,309 crore, Cera Sanitaryware is the second biggest company in the sector and constitutes 19.89% of the entire industry. Its annual sales of Rs 1,851.49 crore make up 12.23% of the industry.

However, the company has shown poor long-term growth with a net sales growth rate of 6.69% and operating profit growth rate of 8.98% over the last 5 years. In the recent quarter, the company's results have been flat with a decline in PAT(Q) at Rs 47.06 crore and a growth in NET SALES(Q) at Rs 400.71 crore. The PBDIT(Q) is also at its lowest at Rs 58.06 crore.

Technically, the stock is in a mildly bearish range with a deteriorating trend since 18-Oct-24, generating -9.4% returns since then. Multiple factors such as RSI, MACD, Bollinger Band, and KST are also bearish for the stock.

In the long term as well as the near term, Cera Sanitaryware has underperformed the BSE 500, generating -17.19% returns in the last 1 year. Despite the upgrade to 'Hold', the stock's performance has been below par. Investors should carefully consider these factors before making any investment decisions.