CRS’s consolidated Q1FY23 revenue increased 78% YoY (-9.8% Q-o-Q) to Rs 397 Cr owing to strong demand from home upgrades, real estate launches and price hikes of 3% in sanitaryware and 5% in faucetware by CRS during mid-May. Consolidated gross margin declined 550bps YoY to 53.5%. However, a higher revenue contribution of sanitaryware and faucetware at 89% in Q1FY23 vs. 81% in Q1FY22 had a positive bearing on operating margin. This coupled with price hike benefits and lower employee & other expenses spurred EBITDA margin gains of 670bps YoY (-360bps Q-o-Q) to 15.8%. While the company reported net profit of Rs39.8 Cr, up by 199.1% YoY.
Conference call Highlights
The building material companies are riding high on strong demand in the domestic market. We like Cera given its healthy market share in domestic sanitaryware and faucets industry, extensive distribution reach, healthy balance sheet and pedigree of management. The stock is currently trading at the PE of 22.5x on the basis of FY25E earnings.
Particulars (Rs. in Crores) | Q1FY23 | Q1FY22 | Y-o-Y | Q4FY22 | QoQ | FY22 | FY21 | YoY |
---|---|---|---|---|---|---|---|---|
Revenue from Operations | 397.00 | 223.00 | 78.00% | 441.00 | -10.00% | 1446.00 | 1224.00 | 18.00% |
Employee Benefit Expenses | 50.00 | 44.00 | 53.00 | 194.00 | 154.00 | |||
Other Expenses | 285.00 | 158.00 | 303.00 | 1023.00 | 913.00 | |||
Total operating expenses | 334.00 | 202.00 | 356.00 | 1217.00 | 1066.00 | |||
EBITDA | 63.00 | 21.00 | 197.00% | 85.00 | -26.00% | 229.00 | 158.00 | 45.00% |
EBITDA Margin (%) | 15.80% | 9.50% | 19.20% | 15.80% | 12.90% | |||
Depreciation and Amortization | 8.00 | 8.00 | 8.00 | 32.00 | 40.00 | |||
EBIT | 55.00 | 13.00 | 312.00% | 76.00 | -28.00% | 196.00 | 118.00 | 66.00% |
Other Income | -1.00 | 6.00 | 6.00 | 24.00 | 25.00 | |||
Finance Cost | 1.00 | 1.00 | 2.00 | 5.00 | 10.00 | |||
Profit Before Exceptional Items and Tax | 54.00 | 18.00 | 81.00 | 215.00 | 134.00 | |||
Exceptional Items | - | -6.00 | -6.00 | |||||
Profit Before Tax | 53.60 | 18.10 | 196.00% | 75.00 | -29.00% | 209.00 | 134.00 | 56.00% |
Tax Expenses | 13.70 | 4.60 | 22.00 | 56.00 | 34.00 | |||
Effective Tax Rate (%) | 25.60% | 25.50% | 29.30% | 26.80% | 25.40% | |||
Profit After Tax | 39.90 | 13.50 | 196.00% | 53.00 | -25.00% | 153.00 | 100.00 | 53.00% |
PAT Margin (%) | 10.00% | 6.00% | 12.10% | 10.60% | 8.20% | |||
EPS | 30.40 | 10.20 | 199.00% | 40.70 | -25.00% | 116.00 | 77.00 | 50.00% |
Source: Company Filings; StockAxis Research
Yr End March (Rs Cr) | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E |
---|---|---|---|---|---|---|---|
Net Sales | 1351.50 | 1223.70 | 1224.30 | 1445.80 | 1705.00 | 2049.00 | 2365.00 |
Expenditure | |||||||
Material Cost | 606.20 | 550.30 | 626.80 | 683.90 | 826.90 | 1004.00 | 1151.80 |
Employee Cost | 165.50 | 170.70 | 153.70 | 189.40 | 208.00 | 250.00 | 288.50 |
Other Expenses | 381.70 | 337.20 | 285.80 | 344.10 | 392.20 | 454.90 | 525.00 |
EBITDA | 198.30 | 165.50 | 158.10 | 228.40 | 277.90 | 340.10 | 399.70 |
EBITDA Margin | 14.70% | 13.50% | 12.90% | 15.80% | 16.30% | 16.60% | 17.00% |
Depreciation & Amortization | 28.00 | 38.80 | 39.60 | 32.40 | 40.00 | 48.00 | 53.00 |
EBIT | 170.30 | 126.70 | 118.50 | 196.00 | 237.90 | 292.10 | 346.70 |
EBIT Margin % | 12.60% | 10.40% | 9.70% | 13.60% | 14.00% | 14.30% | 14.70% |
Other Income | 18.60 | 18.20 | 25.20 | 23.60 | 25.00 | 25.00 | 26.00 |
Interest & Finance Charges | 8.50 | 10.10 | 9.70 | 5.30 | 6.90 | 6.60 | 6.00 |
Profit Before Tax - Before Exceptional | 180.30 | 134.90 | 133.90 | 214.40 | 256.00 | 310.50 | 366.70 |
Profit Before Tax | 180.30 | 134.90 | 133.90 | 214.40 | 256.00 | 310.50 | 367.70 |
Tax Expense | 65.20 | 24.30 | 34.00 | 56.00 | 64.50 | 78.20 | 92.40 |
Effective Tax rate | 36.20% | 18.00% | 25.40% | 26.10% | 25.20% | 25.20% | 25.00% |
Net Profit | 115.10 | 110.50 | 99.90 | 158.40 | 191.50 | 232.40 | 275.30 |
Net Profit Margin | 8.50% | 9.00% | 8.20% | 11.00% | 11.20% | 11.30% | 12.00% |
Yr End March (Rs Cr) | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E |
---|---|---|---|---|---|---|---|
Share Capital | 6.50 | 6.50 | 6.50 | 6.50 | 6.50 | 6.50 | 6.50 |
Total Reserves | 694.40 | 764.20 | 865.20 | 1008.60 | 1180.60 | 1396.70 | 1652.80 |
Shareholders' Funds | 711.20 | 778.40 | 883.50 | 1029.40 | 1196.10 | 1412.20 | 1669.30 |
Minority Interest | 10.30 | 7.70 | 11.70 | 14.20 | 9.00 | 9.00 | 10.00 |
Non Current Liabilities | |||||||
Long Term Burrowing | 39.60 | 43.40 | 42.60 | 17.50 | 72.00 | 62.00 | 54.00 |
Deferred Tax Assets / Liabilities | 43.60 | 29.90 | 30.30 | 35.40 | 35.40 | 35.40 | 35.40 |
Long Term Provisions | 6.70 | 10.60 | 10.30 | 9.00 | 9.00 | 9.00 | 9.00 |
Current Liabilities | |||||||
Short Term Borrowings | 44.70 | 41.00 | 30.30 | 27.70 | 27.70 | 27.70 | 27.70 |
Trade Payables | 110.90 | 95.30 | 155.40 | 133.50 | 146.80 | 185.10 | 199.50 |
Other Current Liabilities | 194.90 | 177.30 | 180.00 | 269.20 | 269.20 | 269.20 | 269.20 |
Short Term Provisions | 16.60 | 2.90 | 6.90 | 2.40 | 2.40 | 2.40 | 2.40 |
Total Equity & Liabilities | 1190.80 | 1219.40 | 1377.70 | 1551.20 | 1785.60 | 2030.10 | 2293.60 |
Assets | - | ||||||
Net Block | 385.30 | 438.50 | 415.50 | 451.50 | 541.50 | 563.50 | 570.50 |
Non Current Investments | 20.80 | 38.80 | 40.20 | 35.00 | 35.00 | 35.00 | 35.00 |
Long Term Loans & Advances | 16.80 | 10.70 | 9.40 | 11.00 | 11.00 | 11.00 | 11.00 |
Current Assets | |||||||
Currents Investments | 157.00 | 189.50 | 434.00 | 527.20 | 557.20 | 557.20 | 557.20 |
Inventories | 215.80 | 243.00 | 199.70 | 293.70 | 267.60 | 401.10 | 380.90 |
Sundry Debtors | 298.40 | 222.80 | 209.50 | 164.80 | 302.10 | 262.30 | 387.00 |
Cash and Bank | 11.00 | 2.10 | 10.40 | 14.90 | 18.20 | 147.00 | 300.00 |
Short Term Loans and Advances | 34.70 | 35.10 | 15.10 | 15.10 | 15.10 | 15.10 | 15.10 |
Total Assets | 1190.80 | 1219.40 | 1377.70 | 1551.10 | 1785.60 | 2030.00 | 2294.50 |
Yr End March (Rs Cr) | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E |
---|---|---|---|---|---|---|---|
Profit After Tax | 115.10 | 110.50 | 99.90 | 158.40 | 191.50 | 232.40 | 275.30 |
Depreciation | 28.00 | 38.80 | 39.60 | 32.40 | 40.00 | 48.00 | 53.00 |
Changes in Working Capital | -21.40 | 4.70 | 131.60 | -71.30 | -97.90 | -55.30 | -89.10 |
Cash From Operating Activities | 124.40 | 129.00 | 268.00 | 119.50 | 133.50 | 225.10 | 240.20 |
Purchase of Fixed Assets | -57.50 | -46.30 | -14.70 | -46.80 | -130.00 | -70.00 | -60.00 |
Free Cash Flows | 66.90 | 82.70 | 253.30 | 72.70 | 3.50 | 155.10 | 180.20 |
Cash Flow from Investing Activities | -110.40 | -79.70 | -242.30 | -66.80 | -160.00 | -70.00 | -60.00 |
Increase / (Decrease) in Loan Funds | -5.60 | 1.30 | -8.30 | 14.90 | 1.00 | -10.00 | -9.00 |
Equity Dividend Paid | -15.60 | -33.80 | - | -19.50 | -19.50 | -16.30 | -19.20 |
Cash from Financing Activities | -29.00 | -55.20 | -18.80 | -4.60 | 30.50 | -26.30 | -27.20 |
Net Cash Inflow / Outflow | -15.00 | -5.80 | 6.80 | 48.10 | 4.00 | 128.80 | 153.00 |
Opening Cash & Cash Equivalents | 21.70 | 6.70 | 0.80 | 7.70 | 14.10 | 18.10 | 147.00 |
Closing Cash & Cash Equivalent | 6.70 | 0.80 | 7.70 | 14.10 | 18.10 | 147.00 | 300.00 |
Yr End March | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E |
---|---|---|---|---|---|---|---|
Basic EPS | 88.50 | 87.10 | 77.50 | 121.80 | 147.20 | 178.70 | 211.70 |
Diluted EPS | 88.50 | 87.10 | 77.50 | 121.80 | 147.20 | 178.70 | 211.70 |
Cash EPS (Rs) | 110.00 | 116.90 | 107.90 | 142.30 | 178.00 | 215.60 | 251.70 |
DPS | 13.00 | 13.00 | 13.00 | 15.00 | 15.00 | 12.50 | 14.80 |
Book value (Rs/share) | 546.90 | 598.50 | 679.30 | 791.50 | 919.70 | 1085.80 | 1283.50 |
ROCE (%) Post Tax | 16.10% | 14.30% | 11.80% | 16.00% | 16.60% | 17.00% | 19.00% |
ROE (%) | 16.20% | 14.50% | 11.40% | 15.40% | 16.00% | 17.80% | 18.00% |
Inventory Days | 55.00 | 68.00 | 66.00 | 62.00 | 60.00 | 60.00 | 60.00 |
Receivable Days | 76.00 | 78.00 | 64.00 | 47.00 | 50.00 | 50.00 | 50.00 |
Payable Days | 28.00 | 31.00 | 37.00 | 36.00 | 30.00 | 30.00 | 30.00 |
PE | 34.90 | 26.50 | 50.40 | 36.90 | 32.30 | 26.60 | 22.50 |
P/BV | 5.60 | 3.90 | 5.80 | 5.70 | 5.20 | 4.40 | 3.70 |
EV/EBITDA | 19.90 | 17.60 | 29.90 | 23.40 | 22.50 | 16.40 | 15.50 |
Dividend Yield (%) | 0.40% | 0.60% | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% |
P/Sales | 3.00 | 2.50 | 4.20 | 4.00 | 3.60 | 3.00 | 0.00% |
Net debt/Equity | - | - | - | - | 0.10 | - | - |
Net Debt/ EBITDA | -0.40 | -0.60 | -2.30 | -2.20 | 0.30 | -1.80 | - |
Sales/Net FA (x) | 3.60 | 3.00 | 2.90 | 3.30 | 3.40 | 3.70 | 4.20 |