Cera Sanitaryware Limited (CERA) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Earnings Conference Call of Sarah Sanitriya. As a reminder, all participant lines will be in the lesson today and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone form. Please note that this conference is being recorded. I now have the conference over to Mr. Devishi, team of TDR India.

Thank you, and over to you, Mr. Z. Good morning, everyone, and thank you for joining us on the earnings conference call for Sera Sanity Well Ltd. for Q4FY26 earnings, which were announced yesterday. We have with us today the management team comprising Mr. Vikas Kothari,

CFO, and Mr. Deepak Chaudhary. VP Finance and Investor Relations of Fera Sanitary Ware. We will start with brief opening remarks from the management, following which we will open the call for Q&A. A quick disclaimer before we begin, some of the statements made in today's conference call may be forward-looking in nature, and a detailed note in this regard is contained in the results documents that have been shared with all of you earlier. I would now turn the call over to the management for their opening remarks. Thank you, and over to you, Deepak. Thank you, Devishim. Good morning, everyone, and a warm welcome to you all for joining us for the Q4 and full year FY26 earnings conference call of Sarah Khanisriwe Ltd. I will begin by sharing a brief overview of our operational and strategic developments during the quarter, following which our CFO, Mr. Vikas Kothari, will take you through the financial performance in greater detail. During the quarter, the company delivered an improved performance, with revenues growing in double digits at 11.4% on a year-on-year basis. Panhandary variant faucets were accounted for 46% and 43% of the revenues respectively during the quarter. This performance further builds on the early signs of recovery that we have started witnessing from Q3. And reinforces our confidence that demand conditions are gradually improving. Importantly, this improvement is being led by our core product categories, where we are seeing relatively better traction, given our strong positioning in the mass and mid-segments. From a broader perspective, the underlying drivers for the building materials sector continue to remain supportive. We have seen a more balanced recovery across segments with traction in both urban markets and select Tier 2 and Tier 3 regions. This is encouraging for our core product categories as demand conditions continue to stabilize. During the quarter, we implemented a calibrated price revision across faucetware and sanitaryware affected from March 1st, primarily to offset the increase in input costs, particularly in brass. Going forward, we expect continued volatility in the key input prices, including metals and energy costs, over the near-to-median term. While these pricing actions have been undertaken in a measured manner, we continue to maintain a balanced approach, keeping in mind both margin protection and market competitiveness. Pricing decisions will remain dependent on movements in input costs and overall demand conditions. On the margin front, we have continued to see some pressure during the quarter, with margins remaining below our normal range, largely on account of higher input costs, as well as on account of continued trade discounts. We have already compensated for the higher costs by increasing prices in both sanitary wear and faucet wear segments. As operating conditions stabilize, we expect to progressively regain better control over discounts, which should support a steady improvement in margins over time. The company had identified certain focus markets, mainly the Northeast, West Bengal, Uttarakhand, Bihar, Tamil Nadu, Madhya Pradesh, Gharkand, Gua, Chhattiskan and Nurisa as a part of its growth strategy initiated sometime ago. Continuous efforts undertaken across these regions to strengthen distribution and market interventions have contributed meaningfully to the growth achieved by the company so far. From a portfolio perspective, F526 has been an important year in strengthening our overall GAND architecture, particularly through our initiatives under Senator and Polyplus. Both brands have made steady progress during the year, with key building blocks now largely established across product portfolio, team structure, distribution, and market presence. Under Senator, we have successfully expanded our retail footprint with 40 flagship stores operational during the year and are targeting to scale this up to 60 stores by next financial year. Under Polyplus, we have onboarded 102 distributors and 1120 dealers during FY26 with a target to expand the network to 200 distributors and 2000 dealers by the end of FY27. These initiatives are currently in the investment and brand building phase, where the focus remains on strengthening positioning, expanding reach, and building long-term brand equity. Given the nature of this phase, we expect the outcomes to play out progressively over time, with a more visible contribution to growth as these initiatives scale up. With the foundational elements now largely in place, our focus will increasingly be on strengthening execution and driving progressive scale-up over the coming periods. Backed by a strong leadership team and relevant industry experience in building established plans, we remain confident about the long-term potential of these initiatives. At the same time, as we continue to invest in these emerging brands, the Coursera brand remains central to our growth strategy and continues to be the primary driver of volumes and overall business performance. As mentioned earlier, we are seeing improved traction in this segment, supported by gradual recovery in retail demand, as well as continued momentum in the project business. Serra Lux is also gradually strengthening our presence in the premium and contemporary segment, supported by an expanding product portfolio and improving market visibility. Given our strong positioning across our core segment, we expect a significant part of the growth going forward to be driven by the core Serra brand, where we have established scale, distribution reach, and strong brand recon. On the brand and marketing front, we are strengthening our overall communication strategy with a sharper focus on enhancing brand visibility across segments. During FY26, our marketing and publicity spends stood approximately at Rs. 49 crores, and we expect this to increase in FY27 as we step up our brand building initiatives across key channels. We are working towards rolling out a series of focus campaigns across digital, social, and on-ground platforms. This will include the introduction of a new brand ambassador, which we expect to announce in the near term, and which we believe will further enhance brand visibility and engagement across the key markets. Overall, these initiatives are aimed at strengthening our brand positioning and supporting our growth strategy going forward. In addition, we have been strengthening our brand visibility through strategic franchisee and institutional tie-up with leading consumer-facing brands across India. We include associations with well-recognized names such as McDonald's, T-Post, Complex, JSW One Homes, Shaldee Hospitals, Federal Bank, and other prominent brands across sectors. From a supply-side perspective, as most of you are aware, the industry has been witnessing disruptions in parts of the unorganized sector, particularly in Mobi, due to gas availability challenges arising from the ongoing geopolitical situation. In response to this environment, we are increasingly undertaking internalization of certain sanitaryware product categories, which is expected to enhance supply reliability and strengthen our ability to cater to demand requirements more efficiently. While gas prices remain elevated and are unlikely to ease in the near term, CERA has remained relatively insulated from these disruptions. This is supported by our continued gas sourcing arrangement, including suppliers from Gale at relatively subsidized rates, which have ensured operational continuity. In addition, we have been able to effectively service demand through our existing inventory levels and manufacturing capabilities, enabling us to maintain supply in a market where several payers have faced disruptions. This has also provided an opportunity to liquidate inventory and support off-take during the period, leading to improved demand visibility. Overall, while the external environment remains challenging, we are well positioned to navigate the current situation without any material disruption to production or supply in the near term. At the same time, we continue to closely monitor the situation and remain focused on ensuring operational stability and responsiveness across our network. On the operations front, we continue to focus on improving manufacturing efficiency and strengthening our supply chain. In process where we continue to witness strong traction with operations running at high utilization levels, during March 2026, we manufactured 4.3 lakh pieces, reflecting a healthy demand momentum. In view of the strong demand visibility, we are undertaking capacity expansion to increase the production capacity to 5 lakh pieces per month with minimal capex outlay of approximately 5 crores. The enhanced capacity is expected to become operational from Q4-F527 onwards. To summarize, while the near-term environment continues to present certain challenges, we are seeing gradual improvement in demand conditions, Supported by a strong market positioning and execution focus. Importantly, we are beginning to see early signs of strengthening across key demand drivers, and as these strengths sustain, we expect this to translate into more visible growth momentum over the coming periods. Our priority remains on disciplined execution, strengthening our operating fundamentals, and building a robust platform for future growth. With a strong balance sheet, diversified product portfolio, and continued investments across brands, channels, and systems, we believe that we are well positioned to navigate the current environment and capture growth opportunities as demand conditions continue to improve over time. With this, I would like to hand over to Mr. Vikas Kothari to run you through the financials of the company.

Thank you, Deepak, and a very good morning to everyone. I will now take you through a brief overview of the company's financial performance for the quarter and year-ended 31st March 26. Revenue from operations for the quarter stood at Rs. 644 crores as compared to Rs. 578 crores in Q4 FY 25. EBITDA excluding other income for the quarter was at Rs. 98 crore as compared to Rs. 106 crore in the corresponding quarter of the previous year. EBITDA margins stood at 15.2% in Q4 FY 26 as compared to 18.3% in Q4 FY 25. This decline was primarily driven by continued pressure on gross margins, led by elevated grass input costs and higher trade discounts. Margins were also impacted by preoperative expenses related to the senator and polyplus formats. Gas cost during the quarter remained stable with the weighted average cost at Rs.35.55 per cubic meter in Q4FY26 as compared to Rs.36.03 per cubic meter in Q4FY25. During the quarter, gas consumption was sourced 64% from gain and 36% from stability. Overall, gas cost as percentage of revenue stood at 2.3%. Input cost, particularly brass, continued to remain at elevated levels, while other input costs, such as clay, also witnessed some upward movement during the period. In response to these sustained cost pressures, The company implemented calibrated price revisions of 4% in sanitary wear and 11% in faucet wear towards the later part of the quarter. These revisions were largely applicable to the retail segment while project business remained relatively insulated due to pre-booked orders. This approach is intended to balance margin protection with market competitiveness. For the quarter under review, revenue contributions by segment was broadly as follows. Sanitary wear at 46%, potions wear 43%, styles at 9%, and wellness at 2%. On a worthwhile basis, Sanitary wear revenue grew by 10.7%, faucet wear by 24.3%, wellness by 31.2%, while times declined by 8.3%. Our core categories, sanitary wear and faucet wear together accounted for 89% of the total revenues. Capacity utilization during the quarter stood at 70% for sanitary wear and 106% for faucet wear. From a product mix perspective, 41% of sales were from premium segment, 38% from mid-segment, and 21% from entry-level products. Geographically, Tier 3 cities accounted for 40% of sales, followed by Tier 1 at 36% and Tier 2 at 24%. Profit after tax stood at Rs. 77 crores as compared to Rs. 86 crores in the corresponding quarter of the previous year. Earnings per share for the quarter stood at Rs. 59.96 compared to Rs. 66.36 in Q4 FY25. On the Berkeley capital front, We continue to see improvement across key parameters during the quarter, with inventory days decreasing from 79 days to 71 days, receivables reducing from 37 days to 33 days, while payables stretched from 38 days to 40 days. This resulted in a YOY reduction in net working capital from 78 days to 64 days. As of March 31st March 26, our cash and cash equivalents stood at Rs. 853 crores. On capital expenditure front, the capital expenditure for FY26 remained measured with an outlay of around Rs. 14.5 crores by end of March 26. This was largely directed towards routine maintenance, along with selective investments towards strengthening our brand presence and retail initiatives. Overall, our financial position remains healthy, supported by a strong balance sheet, disciplined cost management, and prudent working capital practices. While the operating environment continues to be impacted by input cost pressures, there are steps taken during the quarter. Including calibrated price revisions and a continued focus on cost efficiencies position us well to navigate near-term challenges. We remain focused on maintaining financial discipline while continuing to invest selectively in strategic initiatives and believe this approach should support steady and sustainable performance going forward. With this, I would like... The moderator to open the lines for Q&A. Thank you very much. Thank you very much.

We will now begin the question and answer session. Anyone who wishes to ask a question, you can press star and 1 on the telephone. If you wish to remove yourself from the question queue, you can press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, We will wait for a moment while the question queue assembles. The first question is from the line of Praveen Sahai from PL Capital. Please go ahead.

Yeah, hi, sir, and thank you for the opportunity, and many congratulations for a good set of numbers. The first question is related to the demand. So if I look at that from Q3 to Q4, and we can clearly see that the retail has done better in the Q4, and also in the commentary and opening statement, you have said that the retail channel has increasing recovery, you know, and there. So, how you are going to see in the FY27, the retail, because the retail has been quite a muted for a past few quarters, now we started seeing some improvement. So, how you are going to see the growth in the retail, the way forward, and second thing is on the institution contribution, because institution contribution has also increased in the last four years from 32 to 38 percent with a good growth. So where do you see the balance between the institution and the retail in the coming years?

Thank you, Praveen. Like, I'll just take you through the journey of how the progress and demand has been over the last couple of years. Like, if you see, we had entered the phase of sluggish demand from Q3 of FY23, 23-24. During that period, the… The project demand continued to remain strong, but retail has entered into a sluggish kind of a situation. Since Q3 of the current financial year, we have started seeing an improvement in the retail demand, and we saw this chaining through Q4 also. In the current, if we see the month of April also, we have seen a good surge in the retail, which has continued in the current quarter also. So we are hopeful that going forward, the kind of demand recovery that we have seen in the retail segment should continue in the full year of FY27. And the kind of traction that we are seeing in project, that we find that it has increased from something like 30% what it used to be earlier a couple of years back to 35% and then now to something like 39-40%. With the improvement in retail demand, we expect that this percentage should now remain stable. So going forward, we expect that the proportion of retail and project should now be remaining stable at 60% for retail and 40% for the project business. On an overall growth perspective, we have started seeing improvements in volume, and going forward, we expect that there should be good traction in the volume in both the connectivity wear and the faucet. More so in the faucet segment, we have been even in the period where the demand used to be sluggish. We have consistently seen improvements in the faucet wear demand. Going forward in F527, we expect that faucet wire should continue to grow at 10% to 12% in volumes, and sanitary wire should be in the range of, you can say, 7% to 8% in F527 also.

Okay, so that's 7% to 8% or 10% to 12% is the volume growth is what you are indicating for?

Correct.

Next question is related to the price, because the last photo also, you indicated 4% in the cemetery and 11% in the faucet. But eventually, we indicated that from the March onwards, we started seeing the gradual price increase. So, what challenges basically you had faced, especially in taking the price hike, because the brass prices have been quite a higher for the last couple of quarters back, but the price hike has been first announced and now in March actually has been taken. One, and the second is related to the prices, how much more, as you had indicated also, that's the elevated, the brass prices is the maintaining, and also the clay prices have increased, how much more price heights you expected to take to maintain your margin guidance of a 14% down.

You are right that the input situation has been challenging in the last one quarter or so, especially in light of the geopolitical situation which developed in the month of February. Now, brass prices have started moving upwards even before that, and in the last three, four months, it has gone up from something like late 600 to early 700. From that, it has gone up to something like 800 to 850, which is prevailing at right now. Now, if I see on a year-on-year basis, there would have been an increase of something like 29-30% in the brass prices. Now, effectively, we have taken a price increase of 11% in the month of March. In the month of April, we had taken a surcharge of 10% in the case of sanitary wear and 5% in the case of pocket wear. And now, again, we have taken a price increase of 8% in the case of sanitary wear and 5% in the case of process. We have removed the surcharge and we have gone in for a price increase. So, effectively, over a period of, you can say, two months, we have taken a privacy of 12% in the case of sanitary wear and 16% in the case of faucet wear. Now, these prices are only effective on the retail portion, and for the projects, the prices are expected to, like as per our norms, they remain stable for the period of one year from the time that it is booked into our system. So, on an average, if I assume that projects would be starting and would be completing and there would be a six-month kind of an average wherein the new price effect would take place in the case of projects. So we can expect this kind of price change to start reflecting in the project business from, let's say, in another five to six months. But retail, it has already been implemented, and the impact will be visible from the, like, it is already visible from March, and it will all be visible in Q1 more because it will be a full kind of a quarter where the pricing has remained effective. Now, in respect of as to how well we have been able to cover our rises in price, you'll find that in case of brass, we have more or less been able to cover the kind of price increases that we have taken. Slight deviation is there. We have to absorb some kind of price increase in the brass. Typically, if you see, like I said, that the price increase has been 30% over the last one year, and if I assume that it constitutes something like 60% of my cost, so the effective impact on my COGS would be in the region of 18%, and I've taken a price increase of 16%, so that is still a kind of 1% or 2% which is left as a gap between the pricing and the kind of price increase, That cost increase, which has happened in the case of drafts. But that we intend to calibrate by way of discount controls, which we are expecting that now that the demand has started recovering, we'll see better discounts management going forward. That couple of percentage points that is still lagging behind in the case of price increase should be kind of made up by way of better discount management. In case of sanitary where the clay etc has increased, but the bulk of the price impact comes in on account of gas, like most of the players in Morbi have been severely impacted because of the rise and the kind of rises which have happened in the prices of gas. And also in the month, in the quarter, coming quarter, we expect that even though morgi plants have started opening up, typically the first quarter is in the case of sanitary wear a little slow in the case of morgi because one, especially this will be too much so in the current quarter because even when they have started opening up, most of the labor would have kind of gone back home the time of the plants were closed. And it will be a gradual process by which the labor would come in and the plants will start opening up again. Also, we find that during Q1, it is a monsoon period, and during that period also, you will find that the production in Morbi, in case of sanitary wear, remains slow. So, it will only take some time beyond Q1, where you can expect that the Morbi would be becoming fully operational in case of sanitary wear. So that is a kind of an opportunity for us because the players who are not having their own kind of manufacturing facility and are sourcing mostly from Movedy will find it going a little tough unless and until they have built up stocks heavily earlier. So we anticipate that the current situation will be playing well for us going forward in Q1 and Q2.

Thank you so much for the elaborative answer, sir. Thank you for that. The last question from my side is related to the brand because we did a lot of investment in the Senator and the Polyplex in terms of the distribution and the product last year. So, if you can give me some color on how much of the revenue in the FY26 you had generated from these grants and what's our target? Is there any revision in the target for the revenue for FY27?

Okay, in case of Senator and Polyplus, in Senator, we generated revenue of in the region of 10.5 crores in the full year FY26. In Polyplus, we generated something like 8.5 crores. Total, these banks combined generated total revenue of 19 crores approximately. And for FY27, we are projecting that Senator should be able to generate roughly 40-45 crores, and the Polyplus would be in the range of 30-35 crores. Thank you so much, sir. These two friends taken together should be giving us roughly 70 to 80 euros.

And with the break even.

In the current quarter, like, there was a kind of loss if we take into account the kind of publicity expenses that we have been putting in. Going forward in the FI 27 also, we'll have a lot of publicity being carved out for this particular segment, Senator. If I exclude the publicity expenses, then we'll be making a small profit. But if I take in the publicity expenses also, then it will be a little, maybe not current year, but next year when we start making profits after taking into account all the publicity costs.

Thank you so much, sir, and all the best. Thank you.

Thank you. Participants, you may press star and 1 to ask the question. Next question is from the line of Utkash Nupani. From Ananwati, please go ahead.

Yeah, hi. Good morning, sir. So, my first question is regarding the revenue growth guidance for FY27. So, like already you have mentioned that we are expecting sanitary wear volume to grow at 7% to 8% rate and a faucet at 10% to 12% rate for FY27. And given the price hike which we have implemented in the last two-three-month period, so is it fair to understand that we are targeting century where revenue to grow at a healthy team rate and for that where revenue to grow at more than 20% rate for FY27, sir?

Thank you for asking the question. So, as you have seen, the last year being stressed in terms of different activities, market conditions, geopolitical and all, within those constant situations also, we have delivered the number of 2050 crores in terms of the overall revenue. Going forward, based on how the market demand is doing. We have seen that quarter three and quarter four has built the confidence in terms of continuity of the upward trend. So this is that we have estimated in terms of the revenue growth, which is going to be there for financial year 27. So with the demand trend continuing to grow upward. We expect the overall growth of around 18 to 20 percent next year. In this, if I have to categorize by segment, in Sanity Way segment, we expect 12% growth driven by favorable volume impact of 7% and price impact of 5% to 6% because we are, like Deepak has explained, it is a combination of both project and retail. Retail will be driven by the price increase, whereas in case of projects, pre-orders will be at the old rate and the new orders will be at the increased rates. And similarly, in case of pocket pair, we expect a growth of 18%, which is going to be driven by favorable volume impact of 10 to 12% and price impact of 8%. So overall, if we see today in terms of how the things are moving and how we have capitalized different scenarios, adverse scenarios into opportunities. We expect that if the strain continues, the overall growth will be between 18 to 20 percent.

Okay. On the margin side, in your initial remarks, it was mentioned.

Yeah, please speak.

Yeah, so on the margin side, like, sir, you have initially mentioned that we are trade discount, which was going on. It is still continuing. So just wanted to understand, like, we are seeing a pretty good demand in the good demand recovery in the retail segment. And the supply side has also got impacted because of the gas supply disruption. So why we are still continuing with the trade discounts?

No, so just to give you an understanding in terms of the margins, so if you see for the whole year, keeping aside this recent scenario of gas and all, so margins were stressed, reason for being the trade discounts which were offered to meet out the subdued demand, they were keep on increasing. So, with this Q3 onwards, we have seen that because in terms of discounts and all, it is not a process that it can be immediately controlled. It is a gradual journey. So, this control, like we told, discount management will be controlled this year. We have already started taking the steps from Q1 onwards, and this will further strengthen in the coming quarters. So, as far as margin decline is concerned, the two factors which has largely impacted the gross margin is the rise in the input costs, mainly the brass prices, which has been elaborated how this has gone, and it has gone by 29%, which has now been sufficiently taken care of through the price rise to offset the impact of increased costs. And secondly, the elevated trade discounts. So, these trade discounts are again, we can correct it in the coming quarters. So, if you have seen the margins which are in Q4, they have seen an uplift from 10.2% in Q3 to 15.2%. And we understand that with the growth which is going right now in terms of the demand aspect. So, we see that if this trend continues, we will be able to sustain the EBITDA margin at around 14 to 15%.

Thank you. And, so, sir, one question was regarding the capacity utilization. So, if you can give some sense, what was the capacity utilization of our sanitary wear plant in March and April month? And do you see any disruption in our sanitary wear operation, say, in the June quarter period? And what kind of a sanitary ware inventory we were carrying at the end of March 26, and what is the status of our greenfield sanitary ware transfer?

So, regarding the capacity utilization, so as we have rightly told, in case of sanitary wear, in March, we were operating at 70% of our total capacity, and in case of worship wear, we were operating at 106% of our total capacity. So, ideally speaking, in face of sanitary wear, in the month of March, we had an advantage in terms of the inventory levels. So, adequate inventory levels played a critical role in ensuring uninterrupted market supplies and meeting customer demand during this period. And what has happened is, in March, we have taken a decision to close one plane, which was temporarily shut down to manage the operational efficiency, because in March, the visibility was very poor in terms of gas supplies, prices and all. So, we have taken this as an opportunity, and since we were having the inventories built up, so that has proved as a favorable part in terms of meeting out the customer demand. And in the month of April also, we have taken the decision to remain closed with one claim. We will be soon getting operational with the second claim. And we hope that in terms of the demand and what is there, and there are certain products which we have taken internalized from Morbi. So, I think this capacity which is running at 70-75% will further improve in the coming months.

Thank you. Utkarsh, may I request to come back for a follow-up question, please?

Yes, sure. Thank you.

Parasabhan, you may press star and one. To ask the question. Next question is from the line of Varun Jalusoria from 361 Capital. Please, go ahead.

Yes, sir. Thank you for the opportunity. Sir, for this quarter, how far was the growth driven by price hike and how much was driven by volume for the Q4?

So, largely if you see, the structure in terms of the growth which is there in this quarter is largely driven by volume. So, if we see that the growth which is driven by volume is almost, just meaning the numbers. So, largely it is driven by volume growth of 12% and with an improved product mix of 3 to 4%. However, there was some adverse price impact of 3% because of discounts and all what we discussed. So, largely it is a volume driven growth.

And sir, sanitary ware and the faucet ware, sir, how much capacity are you increasing? You mentioned it, but we plan for 6 million, right?

No, so just to give you an update in terms of how faucetware is progressing, so with the brownfield expansion, what we have taken earlier, we have increased our capacity from 3 lakh pieces per month to 4 lakh pieces, and last year was a basically milestone where we have operated to reach out to 4 lakhs, And in the month of March, we have completed 4,30000 pieces per month. And with the demand trend being going upward, we are further increasing this capacity from 4.30 lakh per unit to 5 lakh per unit by de-bottlenecking and by putting some efforts within the ground field setup what we have built earlier with a minimum capex of around 4 to 5 crores.

Okay, sir, understood. And for our exposure to Morbi, like we also have a fair bit of exposure on outsourcing. So, how much are we exposed to Morbi and say other regions comparatively for our sanitary wear and faucet wear requirements?

That outsourcing percentage we always keep on disclosing. I'll just tell you the figures right now also. What is the kind of proportion of outsourcing what is in-house? In case of tanity wear, you will find that the outsourcing proportion in the Q4 was to the extent of 60%, and in case of faucet wear, it was to the tune of 57%. Sorry, 46%. 60% for tanity wear and 46% for faucet wear. Now, in the current scenario, as I was mentioning that in the Q4, because of the kind of gas pricing impact which has happened, and also the availability of gas which has become restricted in the month of March onwards, we expect that sourcing from Morbi in Q1 of the current financial year would be a little sketchy. And that is why it is mostly because of the fact that we have adequate inventories that we'll be able to manage the large portion of Q1 and also some portion of Q2. And that is why what we have also done is that during this period, we have also undertaken a drive for internalizing the kind of products which we are currently outsourcing from Morbid. So those we are expecting that should be available for sale from Q2 onwards, by which time we have adequate inventories within the company to take care of any demand which is there for these products.

But sir, is the large part of the outsourcing from Morbi India, or do we have like, you know, as far as I know, there are other suppliers in North and India as well?

In Phineas, it's a multiple source, but it is mostly from Morbi. The multiple suppliers, mostly from Morbi.

Okay. Okay. Thank you, sir.

Thank you. Next question is from the line of Bhavan Rupani from Investec India. Please go ahead.

Hi, sir. Thanks for the opportunity. So, first question on inventory. So, you mentioned that you have inventory of one or two quarters. But if you look at our balance sheet, it shows somewhere around 70 days. I'm assuming that some portion of that could be attributed to raw material cost as well. So, can you tell us about what is the finished good inventory that we have? The finished goods inventory as of

March 2226 was 303 crores as compared to December, which was 365 crores. So December 2025 was 365 crores. We ended March with 303 crores, and at the end of April also we're in the same region, 300 crores roughly we are maintaining currently.

So, that is somewhere around one quarter, right, sir?

So, it doesn't function like that because we are also manufacturing. We are also manufacturing. So, manufacturing is also continuing right now. So, we have certain inventory which is of manufacturing. We have certain inventory of which is for outsourcing materials. So, as I mentioned earlier, the kind of outsourcing material that we have within the kind of entire kit is adequate for taking kind of the POCAS that we have for the next two to three months. So three months further, we don't anticipate any challenge. And by that time, our internalization drive would start giving us the kind of SKUs which were there from Morbi. And also, it is not that Morbi is entirely closed. They will have problems and we will not be able to give the kind of materials that we were giving earlier, the kind of demand projections which are there. But they are still able to supply the kind of some amount of material which will be coming in from Morbi. So, we are comfortable in respect of the entire situation, if you see, we are comfortable in respect of our abilities.

All right. And so what I understand is our tiles is also completely outsourced. So do we see any impact on tiles going ahead in Q1, Q2?

Tiles will be impacted because in the month of March also, later part of March, because most of it is dependent upon outsourcing, we are able to do some amount of sales because some inventory was there with the suppliers, but it is essentially totally driven by outsourcing, and if the plants do not open up and we are not able to start procuring materials from outside, that type portion we expect that during Q1 will be impacted.

Okay, got it, sir.

Sir, you spoke about...

Can I request you to come back, please, for a follow-up question? Thank you, Bhavan. In the interest of time, I request participants to kindly limit themselves to two questions per participant. Next question is from the line of Pranav from Equator Securities. Please, go ahead.

Yeah, good morning, sir. So I just wanted to understand if you can throw some light on the strategy for both Senator and Policist for next, let's say, two to three years, how you want to scale up this business.

How the premiumization trend will be a key driver for this.

See, as we have been mentioning in the earlier calls also, that Polyplus will be the primary driver for the entry segment. This will be mostly a kind of brand which will be for the purpose of dual segment and the areas which are more in the tier 4 nature kind of a situation. So we are already, as I mentioned in my call also earlier, we have set up something like 100 distributors right now with 1,000 plus dealers, and we intend to take it up to 200 distributors and 2,000 dealers in the next financial year. For senators, their idea would be that it will be more of a premium and luxury brand, and that is why the concentration is more on opening brand stores, flagship brand stores across the country. We have already opened something like 40 stores in the current year, and we intend to take it up to 60 in the next financial year. Also, we are intending to, apart from the retail presence, we are wanting to take a strong presence in the project segment also, and we intend to introduce a separate series project range for the Senator brand that will be already in the process and should be there by, you can say, another couple of months. So apart from the retail, we'll also be driving strongly in the project segment in the Senator's portfolio.

Sure, sir. And, sir, after the price hikes, are we at a level

to which, let's say, the other brands

are, or are we still slightly below them?

So, typically, the pricing of Serra has been on an MRP level been higher than what other brands have been. So, in the current situation, we have taken a price increase in line with our own cost structure, the kind of price increases that have happened. The other branded players have also taken similar price increases. We'll find that the price increase more or less is in line with what others have taken. It will be slightly, you can say, more for some brands, slightly less for some brands, but more or less because this is something which has affected each and every player, you'll find that most of them have taken price increases in the line of, you can say, 16% to 18% in the case of faucets and 10% to 12% in the case of sanitary wear for most players.

And sir, we are in the same line, right?

Yeah, on the same line, yeah.

Thank you. Thank you. Next question is from the line of Asim from Dam Capital Advisors. Please, go ahead.

Hi, morning. So, two questions from my side. One on this FY27 revenue growth expectation. So, you said sanitary ware will grow 12%, faucets 18%, then I can't understand how will your overall revenue growth be, you know, 18% or 20%. So, what explains the balance?

Yes, sir, regarding this part, we have given the broad understanding with respect to our major segments. That is fenetri and faucet wear. There are other segments also within the pipeline. So, we have tiles and CC. So, our understanding is that once this mobile situation, which has now started opening from May onwards, will improve. So, tiles, we have tiles and construction chemicals, they are going to contribute around 250 crores, a growth of 20 plus percent. And with respect to the Senator and Poly Plus, our newly introduced brands, they will be contributing around 70 to 80 crores. So overall, if you see, in terms of the overall revenue from all these, that will lead to 18 to 20% growth next year.

Okay, understood. And the second bit, so basically on numbers, so quarterly employee costs in Q4 are down QOQ. Any reasons that you can attribute and what should be the quarterly run rate ahead and the CAPEX number that you estimate for FY27?

I didn't get your first part. You're talking about the employee costs?

Yeah, the employee costs. 59 crores for Q4. I think it's down about 1-2% QOQ. I just wanted to understand if there is anything you want to call out behind the decline.

No, actually, what had happened is that typically, if you see that expenditure, which has been happening on a quarter-on-quarter basis, it has been in the region of 65 crores. So Q1 was roughly 65 crores. Q2 was also 65 crores. In Q3, once the wage code was announced, we had taken certain assumptions that based on the kind of liabilities which will be coming up, there would be an additional expense of something like 5 crores. And that is why you'll find that there was an expense of 70 crores in the quarter of Q3. But in the current quarter, once we have got a better understanding of the wage code and related laws and how it is going to be implemented, we have taken not only, if you see that there is an exceptional item of 10 crores of right back, wherein we have put in something like 18 crores in Q3 for the gratuity and PL liability, Whereas now we are taking in that liability would be only in the region of 7.5 to 8 crores, and so there is a write-back of 10 crores coming in as an exceptional item. Similarly, in the wage expenses also, that during that period we have provided for certain expenses related to the wage code, which we are now anticipating will not be there. So that is why that expense of 65 crores, which was 70 crores in Q3, has now come back to 60 crores in Q4. Going forward, we expect that the employee expenses should increase in the range of 10% on the basis of normal wage hikes and the kind of salary increases that is normally there. Also, in the case of labor, there might be some long-term settlement which is now pending, which will impact only the labor portion, the wage portion, not the salary cost. How much that impact will come would be depending upon the negotiation which happens with the worker, and that impact should start coming in depending upon when that negotiation actually happens. In respect of the CAPEX program, typically our CAPEX is in the range of, you can say, 28 to 30 crores. In this particular year, we are anticipating a total CAPEX of something like 45 crores. This includes a normal CAPEX of roughly 25 crores, which we typically do on a year-on-year basis. Roughly 5 crores is there for the faucetware expansion. I'm talking about within this 30 crores, there is 5 crores for faucetware expansion. And also another 15 crores has been budgeted for acquisition of some more office space that we've been planning to do in the current financial year. That will be in the range of 15 crores. So total capex taking everything together, a routine of faucetware expansion of 5 crores And the office space acquisition of something like 15 crores would be in the region of 43.42 crores.

Okay, thank you. Thank you.

Question is from the line of Bhavind Sahai from PL Capital. Please go ahead.

Yes, sir. Thank you for the follow-up. A small question from my side. You have a 853 crore of a cash. So what's the uses way forward? Have you, you know, decided for that?

So ideally, I think this is the question which is asked every time. So the idea is to communicate that whatever the cash position on which we are sitting, we are equally respecting in terms of distributions also. So this time if you have seen that we have given a healthy dividend, declared a healthy dividend payout, which is now 75 rupees. Per share, almost 1500% of the face value. So that is there. Apart from that, in terms of the greenfield project, which we will evaluate, as we have seen, the corrections are coming right now with respect to demand. So, the right time of the start-up of construction of the greenfield will be seen in the coming quarters. So, the greenfield project was initially estimated at around 130 CR, of which land portion has already been purchased, that is 27 CR. And considering the two years inflation, what is there, so our understanding is when we are going to construct the first phase, if we conclude in terms of constructing this year. Then it will be costing around 150 PR. So these are the current things which are in the pipeline. Apart from the capex, what we have shown as our routine or some incremental capacity expansion, what we are doing. Going forward, we will evaluate the scenarios in terms of how the market is doing and accordingly we will take action in terms of future investments.

So, 150, apart from 27 crore on the land, which you had already incurred.

Yeah, yeah.

Okay. Thank you, sir, and all the best.

Thank you. Next question is from Nainaf Karan Batalia from Asian Market Securities. Please, go ahead.

Hi, good morning. Am I audible? Yeah, yeah, we can give you. Yeah, sir, just wanted to understand what kind of launch expenses we've booked for Senator and Cori Plus in the current year, and what kind of numbers we can see for next 2-3 years when we want to have a bit of 20-25% on this portfolio.

In the current year, the expenses in Senator were mostly focused on opening the brand stores. So, we have spent something like 4 crores in the current year because this expansion has started from, let's say, after three months in the start of the year. So, we have spent something like 4 crores over here. In the period going forward, now that store expansion has mostly happened, like we have opened 40 stores in the current period. We intend to go another 20 in the next year to take it to 60, but now that we have bought in the space, all the infrastructure in place, now we'll also need to spend on the other activities, wherein we'll be spending on exhibitions, architects, consultants, catalogs, print media. There will be some advertising also being done. So for the next year, we expect that 10 to 12 crews will be going in for the senator's publicity sector.

Sir, more of I was referring to the total expense which includes team building exercise, store opening and other overhead. So, we've had losses in this year. So, just wanted to get the broad math right.

The salary expenses for Senator and Polyplus in the current year was in the region of 6.5 crores for Senator and 3.3 crores for Polyplus. Going forward, we expect 8.5 crores for Senator and 7 crores for Polyplus, 15.5 crores for both of them taken together. In publicity, we expect to do something like 10 to 12 crores next year. So the salary expenses are now going to be constant, like this is the kind of, as of now, the total structure has already been set up, and so that amount would now be remaining more as constant at 15.5 to 16 crores. Publicity for the next year is budgeted at 10 to 12, may increase again going forward in F528.

Right, right, right. So this year, the losses were what in the tune of 15, 16 crores?

This year, the total losses were in the region of 7 crores for Senators, and for Polycrustics, it was in the range of 1.5 crores. The total losses were in the range of 8.5 crores.

Thank you. Thank you, that's the command.

Thank you very much. Ladies and gentlemen, in the interest of time, we'll take that at the last question. I now hand the conference over to the management for closing comments.

Thank you, everyone, for attending this call and for showing interest in Serra Sanity Way Limited. Should you need any further clarification or would like to know more about the company, please feel free to reach out to me or to CBR India. Thank you once again for taking the time to join the call. Thanks and bye. Thank you.

Thank you very much. On behalf of CDR India and Thera Sanitaria Ltd that concludes this conference, thank you for joining us and you may now disconnect your lines. Thank you.