Cera Sanitaryware Receives 'Sell' Rating from MarketsMOJO Due to Poor Long-Term Growth and Underwhelming Financial Results

Cera Sanitaryware, a leading player in the ceramics, marble, granite, and sanitaryware industry, has recently received a 'Sell' rating from MarketsMOJO on October 30, 2024. This downgrade is based on the company's poor long-term growth, with net sales and operating profit only growing at an annual rate of 6.69% and 8.98%, respectively, over the last 5 years.
In addition, the company's recent financial results for the quarter ending June 2024 have been underwhelming, with a decrease in PAT(Q) at Rs 47.06 crore and a growth of only -6.51% in net sales. PBDIT(Q) has also been at its lowest at Rs 58.06 crore. These factors, along with a mildly bearish technical trend and multiple bearish indicators such as MACD, Bollinger Band, and KST, have contributed to the 'Sell' rating.

Despite having a high management efficiency with a ROE of 15.41%, Cera Sanitaryware has a low debt to equity ratio and a fair valuation with a price to book value of 6.9. However, the stock has underperformed the BSE 500 in the last 3 years, 1 year, and 3 months, with a return of -15.65%. This is in contrast to the company's profits, which have only risen by 0.4% in the past year, resulting in a high PEG ratio of 40.5.

On the positive side, Cera Sanitaryware has a high institutional holding of 28.75%, indicating that these investors have better resources to analyze the company's fundamentals. With a market cap of Rs 9,156 crore, it is the second largest company in the sector, constituting 20.03% of the entire industry's market share. Its annual sales of Rs 1,851.49 crore also make up 12.25% of the industry's total sales.

In conclusion, while Cera Sanitaryware may have some positive aspects such as high management efficiency and low debt to equity ratio, the recent downgrade to 'Sell' by MarketsMOJO and the company's underwhelming financial performance suggest caution for potential investors.