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Ppt company report cera sanitaryware ltd   final
 

Ppt company report cera sanitaryware ltd final

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A team project - Company Report on CERA Sanitaryware Ltd.

A team project - Company Report on CERA Sanitaryware Ltd.
1.Peer Comparison
2.Ratios
3. SWOT Analysis

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    Ppt company report cera sanitaryware ltd   final Ppt company report cera sanitaryware ltd final Presentation Transcript

    • Company Report Cera Sanitaryware Ltd. Aakash Saha – A01 Neha Gupta – A02 Anurag Mishra – A03 Ranjan Kumar – A04 Kiran – A05 Vandita Naroola – A06
    • SANITARYWARE INDUSTRY SANITATION CONDITIONS IN INDIA HAVE IMPROVED IN INDIA IN THE PAST DECADE DUE TO: Improving rate of literacy Increasing disposable income of the consumers The improved standard of living is driving the demand growth of sanitary ware products in the country PRESENT SCENARIO IN INDIA  Market size: 1700 crores  Annual growth rate: 15-16%
    • PRESENT SCENARIO FUTURE PROSPECTS IN INDIA Developing countries like INDIA Tremendous increase EUROPE Stagnant GLOBAL SCENARIO U.S Stagnant Huge market for sanitaryware CHINA Largest toilet market globally in 2010 Exports to increase Population Growth at a significant rate Government’s support to improve sanitation and hygiene Growing disposable income and education levels Increasing Real estate sector Urbanization boom India is set to become the second largest consumer of sanitary ware products in Asia-Pacific region
    •  Demand for Made in India Sanitary Wares in the International Markets: China (Mainland), Nigeria, Hong Kong, Malawi, Nepal, Thailand, United States  Prominent Destinations to Source Sanitary Wares from India: Majority of the sanitary companies have set up their plants in Rajasthan and Gujarat given the availability of large quantity of raw material and low-priced labour there ORGANIZED SECTOR VS UNORGANIZED SECTOR  The organized sectors produce fully vitrified sanitarywares, using latest technology and best of Ceramic Raw Materials available in India.  The unorganized sectors have adopted local Indian technology to manufacture the basic sanitaryware products.  Unorganized sector's percentage of production capacity and also their sales in the local domestic market are higher than that of the organized sectors' sales.  Unorganized sanitaryware manufacturer comes under small sectors and hence enjoy the benefit of Nil Excise Duty and Sales Tax and hence they sell their products in the domestic market approximately 70% cheaper than the organized sector products.
    • CERA SANITARYWARE Background • Launched in 1980, Cera is a pioneer in the sanitaryware segment in India. • The first sanitaryware company to use natural gas, Cera has been on the forefront of launching a versatile colour range and introducing the bath suite concept. It also launched innovative designs and water-saving products. • Cera has been steadfastly moving towards its mission of becoming a total bathroom solution company. • In 2010, Cera took one more step towards its goal, commissioning its state-of-the-art faucets facility where the focus will only be on new designs & innovation. • Equipped with the latest equipments like fully automatic core shooter, instant induction furnace, channel type furnace with gravity die-casting machine and high tech equipments for endurance testing, high pressure testing, plating thickness testing, faucets facility ensures delivery of quality & consistency of its products.
    • Background contd. • Confirming to its tradition of being at the forefront of innovation, in a nationwide consumer survey among 30,000 people conducted by Nielsen, Cera’s Snow White has been voted Product of the Year in the sanitaryware category for 2011. • To achieve growth in the rapidly changing retail market in the country, Cera, has launched its one of a kind Cera Style Studios in Ahmedabad, Bangalore, Chandigarh, Kolkata, Cochin, Hyderabad and Mumbai. • With the opening of the Cera Style Studios, the discerning consumers, architects and interior designers can have full view of the Cera’s premium ranges of WC’s, Wash Basins, Shower Panels, Shower Cubicles, Bath Tubs, Shower Temples, Whirlpools, CP fittings etc. Cera Style Studios will complement its existing network of 600 dealers and 5000 retailers. Several Bathrooms are displayed live, so that the customers can get a feel of Cera’s vast range of products. • To increase penetration, along with Style Studio’s, Cera has launched several Cera Style Galleries across the country which are Exclusive Cera Retail Centre.
    •  Manufacturing Facilities: Based in Kadi, Gujarat, Cera Sanitaryware Ltd. uses International technology, which has ensured Cera’s superiority over others in quality. Established with an initial capacity of 3,600 MTPA, the plant has undergone several periodical upgradations and modernizations to expand to 25,000 MTPA. Cera now has Asia’s largest manufacturing plant, at Kadi in Gujarat. Cera Sanitaryware Ltd plans to invest Rs 150 crore over the next two years on capacity expansion.  Raw Materials: Product Name Sales Value (Crores) Product Mix Sand, Sandstone & Clay 22.55 56.3400 Brass Ingots 16.09 40.1900 Fittings & Accessories 1.39 3.4600
    • Key Executives: Shri Vikram Somany - Chairman and Managing Director Shri Vidush Somany - Executive Director Shri Mahendrakumar Bhandari - Director - Technical Bankers: State Bank of India ICICI Bank Ltd. Having shown a growth rate of more than 25% for last 3 years, Cera Sanitaryware Ltd. today is the fastest growing sanitaryware company in India with market share of 26%. Main Products: 1. 2. 3. 4. 5. 6. 7. Sanitary Ware – including sensors Taps Shower Range – including steam shower rooms, pressure pumps Kitchen Sinks Mirrors Novellini – Equipped panels, Complete cubicles, Hydro massage bathtubs, Shower enclosure Personal Care – Hand dryer, Hair dryer, Perfume dispenser, Soap dispenser
    • Competition
    • Company (Cera Peer1 (Kajaria Peer2 (Somany Sanitaryware) Ceramic) Ceramics) Sales 318.09 1,309.27 872.33 EBIDTA 60.21 193.39 74.57 PAT 32.04 80.72 24.75 Total Assets 209 456.69 274.4 Shareholders’ funds 139.18 281.9 124.02 Long term debt 47.59 174.8 150.38 Net Fixed assets 90.26 469.06 190.68 Current assets 177.13 376.39 325.3 Current liabilities 71.98 402.87 250.83 Market cap 534.67 1552.61 307.71 EBITDA margin 18.93% 14.77% 8.55% PAT margin 10.07% 6.17% 2.84% Debt to Equity ratio 0.34 0.62 1.21 Current Ratio 2.46 0.93 1.30 Growth in sales 31.30% 37.17% 22.92% Growth in net profit 20.72% 33.07% 5.63% Growth in assets 24.06% -9.07% -4.16% Price to Earnings = mcap/net profit 16.69 19.23 12.43 Price to book = mcap/shareholders funds 3.84 5.51 1.09 Return on Equity (ROE) 25.55% 32.00% 21.86% PEER COMPARISON
    • Competition • High sales in this industry is due to increased demand. Cera, the third largest player in sanitaryware products is expected to increase its turnover to approx Rs. 500 Cr in this fiscal. • PAT for Cera is high as compared to Somany with the higher EBIDTA due to significant reduction in costs with the introduction of new sources and import substitution of raw materials, colours etc. • Cera is a more profitable company as compared to its peers, the average depreciation is about 30-35% both the company and its peers. • Overall low Debt/Equity ratio indicates a defensive approach by the industry. Out of the three Somany Ceramics has been more aggressive in financing its growth with debt and is a more risky choice. • With the highest current ratio as compared to its peers, Cera is likely to meet its short-term obligations efficiently.
    • • The growth in sales has not varied greatly among the three companies. The higher sales growth for Kajaria Ceramics may be attributed to the expenses deployed for selling and distribution. • Both Cera Sanitaryware and Kajaria Ceramics have reported good growth in net profit. This has led to the confidence of investors being retained. • Although its peers have shown a decline in assets, Cera Sanitaryware has shown a growth because of their expansion plans. Cera has embarked upon a three-year rolling plan to invest Rs 150 crore to expand its current capacity. • A high P/E ratio indicates that investors are expecting higher earnings growth from the company in the future. As shown, investors see high growth prospects in Kajaria, followed by Cera and Somany. • A high P/B ratio indicates that investors have overvalued the stock; it also goes hand-in-hand with a high ROE which is true in the case of Kajaria Ceramics. • The ROE for Kajaria is high even though the net profit margin is only about 6% because it has been able to sustain a 37% growth in sales even with a 9% decline in assets. This indicates high operational efficiency.
    • Finished Products/Sales Sales Breakup in FY2012 (%) Wellness products & accessories, 4 0.57 Sanitaryware Domestic, 48.3 7 Sanitaryware Export, 1.22 Faucetware, 5. 06 CP Fittings, 4.78
    • Financials Balance Sheet Income Statement Ratios
    • SWOT Analysis Strengths • Well entrenched distribution system • Automatic CNC & Polishing Machine installed • Non- Conventional wind power generation • R&D – Snow White Glaze, import substitution of colors and raw materials • Dia Mirza – Brand Ambassador • After sale services Opportunities • Expansion of Production Capacity; increase by 2.7mn piece p.a. Weaknesses • Shortage of quality manpower. Total strength: 1895 Threats •Euro-zone Crisis can decrease housing construction rate •Cheaper Chinese imports •Increasing competition from organized and unorganized players
    • Outlook / Future Plans • Total Home Solution • 36 CERA Style Galleries • CERA Style Studio – Andheri(W) , Mumbai & Gurgaon
    • Annexure A
    • Annexure A
    • Annexure B Particulars Dec-12 No of Shares (Mn) Sep-12 % Holdings No of Shares (Mn) Jun-12 % Holdings No of Shares (Mn) % Holdings Promoter & Group Foreign Sub Total Indian Sub Total Total ShareHolding 0.00 0.00 0.00 0.00 0.00 0.00 7.01 55.40 7.01 55.36 7.01 55.36 7.01 55.40 7.01 55.36 7.01 55.36 Non Promotors / Public Shareholding Institution Financial Institutions / Banks Foreign Institutional Investors 0.01 0.06 0.01 0.06 0.01 0.04 0.72 5.68 0.71 5.59 0.38 2.97 Mutual Funds / UTI 0.03 0.21 0.03 0.20 0.00 0.00 Sub Total 0.75 5.95 0.74 5.85 0.38 3.02