Cera Sanitaryware Upgraded to 'Hold' by MarketsMOJO, Despite Poor Long-Term Growth

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 several factors, including the company's high management efficiency with a ROE of 15.41% and low debt to equity ratio of 0 times.
The technical trend for the stock is currently sideways, indicating no clear price momentum. However, it has improved from being mildly bearish on October 8, 2024 and has generated a return of 3.01% since then. The stock is also trading at a fair value with a price to book value of 7.7 and a ROE of 17.8.

Cera Sanitaryware also 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 10,093 crore, it is the second largest company in the sector, behind Kajaria Ceramics, and makes up 20.11% of the entire sector. Its annual sales of Rs 1,851.49 crore account for 12.31% of the industry.

However, the company has shown poor long-term growth with net sales growing at an annual rate of 6.69% and operating profit at 8.98% over the last 5 years. In the most recent quarter, the company's PAT has fallen by -16.4% and its net sales and PBDIT have also been at their lowest. This below par performance has also been reflected in the stock's returns, which have underperformed the BSE 500 index in the last 3 years, 1 year, and 3 months.

Overall, while Cera Sanitaryware may have some positive aspects such as high management efficiency and low debt, its poor long-term growth and recent underperformance make it a 'Hold' for now. Investors should keep an eye on the company's future performance before making any investment decisions.