Cera Sanitaryware Limited ($532443)

Ladies and gentlemen, good day, and welcome to the earnings conference call of Cera Sanitaryware. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Devrishi Singh of CDR India. Thank you, and over to you, Mr. Singh.

Good morning, everyone, and thank you for joining us on the earnings conference call for Cera Sanitaryware Limited for Q4 FY '26 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 Cera Sanitaryware. 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, Devrishi. Good morning, everyone, and a warm welcome to you all for joining us for the Q4 and full year FY '26 Earnings Conference Call of Cera Sanitaryware Limited. 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, Sanitaryware and Faucetware 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 mix segments. From a broader perspective, the underlying drivers for the building materials sector continue to [indiscernible]. We are seeing 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, effective from March 1, 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 medium term. While these pricing actions have undertaken -- 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 still 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 cost by increasing prices in both Sanitaryware and Faucetware 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 has identified certain focus markets. Mainly the Northeast, West Bengal, Uttarkhand Bihar, Tamil Nadu, Madhya Padesh, Jharkhand, Goa, Chattisgarh and Odisha as part of its growth strategy initiated some time ago. Continuous efforts undertaken across these regions to student distribution and market interventions have contributed meaningfully to the growth achieved by the company so far. From a portfolio perspective, FY '26 has been an important year in strengthening our overall brand architecture, particularly through our initiatives under Senator and Polipluz. Both brands have made steady progress during the year with key building blocks now largely established across product portfolios, 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 Polipluz, we have onboarded 102 distributors and 1-1-2-0 dealers, 1120 dealers during FY '26 with a target to expand the network to 200 distributors and 2,000 dealers by the end of FY '27. 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 core Cara brand remains central to our growth strategy and continues to be the primary driver of volumes and overall risk 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 projected growth. Cera Luxe 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 segments, we expect a significant part of the growth going forward to be driven by the core Cera 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 and visibility across segments. During FY '26, our marketing and publicity spend stood approximately at INR 49 crores and we expect this to increase in FY '27 as we step up our brand building initiatives across key channels. We are working towards rolling out a series of focused campaigns across digital, social and on ground platforms, which 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 building 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 will do the association with well-recognized names such as McDonald's, Tpost, Complex JSW One Homes, Shalby 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 part of the -- parts of the unorganized sector, particularly in Morbi, due to gas availability challenges arising from the ongoing geopolitical situation. In response to this environment, we are increasingly upticking internalization of -- 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 [indiscernible] at relatively subsidized rates, which have ensured operational continuity. In addition, we have been able to effectively service demand to 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 offtake 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 efficiencies and strengthening our supply chain. In Faucetware, 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 INR 5 crores. The enhanced capacity is expected to become operational from Q4 FY '27 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 INR 644 crores as compared to INR 578 crores in Q4 FY '25. EBITDA, excluding other income for the quarter was at INR 98 crores as compared to INR 106 crores 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 brass input cost and higher trade discounts. Margins were also impacted by preoperating expenses related to the Senator and Polipluz formats. Gas cost during the quarter delayed stable with the weighted average cost at INR 35.55 per cubic meter in Q4 FY '26 as compared to INR 36.03 per cubic meter in Q4 FY '25. During the quarter, the gas consumption was sourced 64% from GAIL and 36% from Sabarmati. Overall, the gas cost as a percentage of revenue stood at 2.3%. Input costs, particularly brass continued to remain at elevated levels, while other input costs such as play also witnessed some upward movement during the period. In response to the sustained cost pressures, the company implemented calibrated price revisions of 4% in Sanitaryware and 11% in Faucetware towards the later part of the quarter. These divisions 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: Sanitaryware at 46%, Faucetware 43%, tiles at 9% and wellness at 2%. On a Y-o-Y basis, Sanitaryware revenue grew by 10.7%, Faucetware by 24.3%, wellness by 31.2%, while tiles declined by 8.3%. Our core categories, Sanitaryware and Faucetware together accounted for 89% of the total revenues. Capacity utilization during the quarter stood at 70% for Sanitaryware and 106% for Faucetware. From a product mix perspective, 41% of sales were from premium segment, 38% from mid segment and 21% from NT-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 INR 77 crores as compared to INR 86 crores in the corresponding quarter of the previous year. Earnings per share for the quarter stood at INR 59.96 compared to INR 66.36 in Q4 FY '25. On the working 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 Y-o-Y reduction in net working capital from 78 days to 64 days. As of March -- 31st March '26, our cash and cash equivalents stood at INR 853 crores. On capital expenditure front, the capital expenditure for FY '26 remains measured with an outlay of around to INR 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 throughput cost pressures, the 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.

[Operator Instructions] The first question is from the line of Praveen Sahay from PL Capital.

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 had said that the retail channel has increasing recovery and there. So how you are going to see in the FY '27, the retail because the retail has been quite muted for the 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 4 years from 32% to 33% with a good growth. So where you see the balance between the institution and the retail in the coming years?

Thank you, Praveen. Like just taking through the journey of how the progress in demand has been over the last couple of years. Like if you see we had enter the phase of sluggish demand from Q3 of FY '23 by '23, 24. During that period, the project demand continues to remain strong, but retail has entered into a sluggish kind of the situation. Since Q3 of the current financial year, we have started seeing an improvement in the retail demand. And we saw this sustaining to Q4 also. In the current -- if we see the month of April also, we have seen a good set in the retail, it 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 FY '27. And the kind of traction that we are seeing in project that we'll find that it has increased from something like 30%, but 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 a good traction in the volume in both the Sanitaryware and the faucet. Most 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 Faucetware demand. Going forward in FY '27, we expect that Faucetware should continue to grow at 10% to 12% in volumes. and Sanitaryware should be in the range of you can say 7% to 8% in FY '27 also.

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

correct. Correct.

Next question is related to the price because the last quarter also, you indicated a 4% in the Sanitary 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 the -- taking the price hike because the brass prices has been quite higher for last couple of quarters back. But the price hike has been first announced and now in the March actually has been taken. One. And the second is related to the prices, how much more, as you had indicated also, that's valuated the brass prices and maintaining and also the clear prices have increased how much more price hikes you expected to take to maintain your margin guidance of 14% down?

You are right that the input situation has been challenging in the last 1 quarter or worst especially in light of the geopolitical situation we developed in the month of February. Now gas prices have started moving upwards even before that. And in the last 3, 4 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 building 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 surcharge of 10% in the case of Sanitaryware and 5% in the case of Faucetware. And now again, we have taken a price increase of 8% in the case of Sanitaryware 5% in the case of Faucets. We have removed the surcharge and we have gone in for a price increase. So effectively, over a period of, you can say, 2 months, you have taken a price in the case of anyway and 16% in the case of Faucetware. Now these share prices are only effective on the retail portion. And for the projects, the prices are expected to be as per an norms, remained stable for the period of 1 year from the time that the it is booked into our system. So on an average, if I assume that the projects would be starting and would be completing and there would be a 6-month kind of an average wherein the new price effect would take place in the case of project. So we can expect this kind of price change to start reflecting in the project business from, let's say, in another 5 to 6 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, maybe has remain affected. Now in respect of as to how well we have been able to cover or 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 with 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 I -- if you see like I said that the price increase has been 30% over the last 1 year. And if I assume that it constitutes something like 60% of my brass, 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 kind of a 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 brass. But that we intend to calibrate by way of discount controls, which we are expecting that now that the demand has started recounting, we see better discount management going forward, that a couple of percentage points that we are still lagging behind in the case of price increase, should we kind of made up by way of -- that's a better discount management. In case of Sanitaryware the clear sector has increased, but the bulk of the price impact comes in on account of gas. Like most of the players in Morbi have been serially impacted because of the rise in the kind of phases which have happened in the prices of gas. And also in the month -- in the quarter, coming quarters, we expect that even though Morbi plants have started opening up, typically, the first quarter is in the case of Sanitaryware a little slow in the case of Morbi because even when one, especially this is a bit too more so in the current quarter because even when they have started opening up, most of the labor would have kind of gone back home at the time that 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 that we find that during Q1, it is a monsoon period. And during that period also, you'll find that the production in Morbi in case of Sanitaryware remains slow. So it will only be -- it will take some time beyond Q1 where you can expect that Morbi would be becoming fully operational in case of Sanitaryware. So that is kind of an opportunity for us because the players who are not having their own kind of manufacturing facility and are sourcing mostly from Morbi will find it going a little tough unless and until they have built up stock heavily earlier. So we anticipate that the current situation will be paying well for us going forward in Q1 and Q2.

Last question from my side is related to the brand because we had a lot of investment in the sit and the Polipluz 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 FY '26 you had generated from these brands? And what's our target? Is there any revision in the target for the revenue for '27?

Okay. In case of Senator and Polipluz, we generated revenue in the region of INR 10.5 crores in the full year FY '26. And in Polipluz, we generated something like INR 8.5 crores banks combined generated total revenue of INR 19 crores approximately. And for FY '27, we are projecting that Senator should be able to generate roughly INR 40 crores, INR 45 crores and the Poly would be in the range of INR 30 crores to INR 35 crores 2 taken together should be giving us roughly INR 70 crores to INR 80 crores.

And with the breakeven?

In the current quarter, like there was a kind of loss if you take into account the kind of publicity expenses that we have been putting in. And going forward in the FY '27 also, we'll have a lot of publicity being carved out for this particular segment, 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, then we'll start making profits after taking into account all the publicity costs.

Next question is from the line of Utkarsh Nopany from Anand Rathi.

Question is regarding the revenue growth guidance for FY '27 earlier you have mentioned that we are expecting Sanitaryware volume to grow at 7% to 8% and faucet at 10% to 12% for FY '27. And given the price hike which we have implemented in the last 3-month period is it fair to understand that we are targeting Sanitaryware revenue to grow at a healthy rate and faucetware revenue to grow at more than 20% for FY '27, sir?

Last year being stressed in terms of different activities, conditions, geopolitical and all those constrained situations, we have delivered the number of INR 200 crores in terms of the overall forward based on how the market is doing, we have seen that quarter 3 and quarter 4 has built the confidence in terms of continuity of the upward trend. So 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, we expect the overall growth of around 18% to 20% next year. In this if I have to categorize by segment, in Sanitaryware 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 projects and retail will be driven by the price. In case of project preorders will be in the old rates and the new orders will be increased rate. And similarly case of Faucetware, we expect the growth of 18% which is going to be driven by favorable volume impact of 10% to 11% and price impact of 8%. So overall, if you see today in terms of how the things are moving and we have capital different scenarios adverse scenarios into opportunities, we expect that such trend continues, the overall growth will be between 18% to 20%.

On the margin in your initial Yes. So on the margin side, sir, you have initially mentioned that we are -- the 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 -- 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 discount?

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 will 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 2 factors which has largely impacted the gross margin is the rise in the input cost, 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 sales discounts are again, we can correct it in the coming quarters. the margins which are in Q4, have an uplift from 10.2% in quarter 3 to 15.2% under that with the growth which is going right now in terms of the demand as we see that if this trend continues, we will be able to sustain the EBITDA margins at around 14% to 15%. [Audio Gap]

One question was regarding the capacity can give sense what was the capacity of our Sanitaryware plant in March and April month? And do you see any disruption in our Sanitaryware operation, say, say, in the June quarter period? And what kind of a Sanitaryware inventory we were carrying at the end of March '26. And what is the status of our Greenfield Sanitaryware plant?

So regarding the capacity utilization, so as you have rightly told, in case of Sanitaryware in March, we were operating at 70% of our total capacity. And in case of Faucetware we were operating at 106% of our total capacity. So ideally speaking in case of Sanitaryware 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 1 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 been -- that has stood as a favorable part in terms of leading out the customer demand. And in the month of April also, we have taken the decision to remain close with 1 plane, we will be soon getting operational with the second plane 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.

Utkarsh may I request to come back for a follow-up question, please. [Operator Instructions] Next question is from the line of Varun Julasaria from 360 ONE Capital.

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 give me 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 the volume-driven growth for the quarter.

Sir, and Sanitaryware, we -- sorry, sorry, on the Faucetware, sir, how much capacity increasing mentioned it, but we plan for $6 million, right? .

No. So just to give you an update in terms of how phosphate 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 basically a milestone where we have operated to reach out to 4 lakhs and in the month of March, we have completed 4.30 lakhs pieces per month. And with the demand trainee going upward we are further increasing this capacity from 4.30 lakhs per unit to 5 lakh per unit by debottlenecking and by putting some efforts within the brownfield setup what we have built earlier with a minimum CapEx of around INR 4 crores to INR 5 crores.

Okay, sir. Understood. And first, sir, 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 Sanitaryware and Faucetware requirement?

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 versus announced. In case of Sanitaryware, you'll find that the outsourcing proportion in the Q4 was to the extent of 60%. And in case of Faucetware, it was to be Sorry, 46%. 60% for Sanitaryware and 46% for Faucetware. Now in the current scenario, as I was mentioning that in the for because of the kind of gas price impact which has happened and also the ability of gas, which has been on restricted in the month of March onwards. We expect that sourcing from Morbi in 1 of the current financial year would be a little sketchy. And that is where 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 whether we have also done is that during this period, we have also undertaken and drive for internalizing the kind of products which we are currently outsourcing from Morbi so those issues are expecting that should be available for sale from Q2 onwards. By which time we have -- until which time we have adequate inventories within the company to take care of the demand which is there for these products.

But sir, is the large part of this outsourcing from mobile? Or do we have like as there are other suppliers in North and .

No, Sanitaryware, it's a multiple source, but it is mostly from Morbi, the multiple suppliers mostly from Morbi.

Next question is from the line of Bhavin Rupani from Investec India. .

So first question on inventory, sir, you mentioned that you have inventory of 1 or 2 quarters. But if you look at our balance sheet, it shows somewhere around 70 days. So I'm assuming that some portion of that could be attributed to raw material costs as well. So can you tell us strip out what is the finished good inventory that we have?

The finished goods inventory as of March 2026, was INR 303 crores as compared to December, it was INR 365 crores. The December 2025 was INR 365 crores. We ended March with INR 303 crores. And at the end of April, also we're in the same region, INR 300 crores roughly, we are maintaining currently.

So that is somewhere around 1 quarter, right, sir? .

So it doesn't function like that. Because we're also manufacturing. So manufacturing is also continuing right now. So we have certain inventory, which is of manufacturing, you have certain inventory which is for outsourcing materials. So as I mentioned earlier, the kind of outsourcing material that we have within the kind of entire city is adequate for taking kind of the forecast that we have for the next 2 to 3 months. So 3 months further, we don't anticipate any challenge. And by that time, as the internalization glycol start giving us the kind of SKUs which were there from Morbi and also, it is not that Morbi and tidy closed. They will have problems and will not be able to give the kind of materials that you are 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, the comfortable in respect of abilities.

Right. And sir, what I understand is that tiles is also completely outsourced. So do we see any impact on tiles going ahead in Q1, Q2?

Will be impacted because in the month of March, also later part of March because most of it is dependent upon outsourcing. We were able to do some amount of sales because some inventory was there would be suppliers. But it is essentially totally driven by outsourcing. And if the plants do not open up and we are not able to get the tax procuring materials from outside that tiles portion, we expect that during Q1 will be impacted.

Okay. Got it. And sir, you spoke about a...

Can I request you to come back, please. [Operator Instructions] Next question is from the line of Pranav from Equirus Securities.

Sir, just wanted to understand if you can throw some light on the strategy for both Senator and Polipluz for next, let say, 2 to 3 years, how you want to scale up this business? And how the premiumization trend will be appealing the driver for this?

See, as we have been mentioning in the earlier calls also that Polipluz will be the primary driver for the into segment. This will be mostly a kind of brand, which will be for the purpose of digital segment and the areas which are more in the Tier portend of a situation. So we have 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, the 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 and wanting to take a strong presence in the project segment also and we intend to introduce separate CDs 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 portfolio.

Sure, sir. And sir, after the price hikes, are we at the -- at Level 2 with, let's say, the other brand that? Or are we still slightly below the target?

Typically, the pricing of Cera has been on an MRP level being 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 even 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 that has affected each and every player. You'll find that most of them have taken price increases in the line of, we can say, 16% to 18% in the case of deposits and 10% to 12% in the case of Sanitaryware for most players. .

And sir, we are in the same line, right? Yes. On the same line?

Yes.

Next question is from the line of Aasim from DAM Capital Advisors.

Sir, 2 questions from my side. One, on this FY '27 revenue growth expectation. So you said sanitary ware will grow 12%. What I can't understand is how will your overall revenue growth be 18% or 20%. So what explains the balance? .

Regarding this part, we have given the broad understanding with respect to our major segments, that is Sanitary and Faucetware. There are other segments also within the pipeline. So we have tiles and CC. So our understanding is that once this Morbi situation which has now started opening from me onwards will improve. So Tiles we have tiles and construction chemicals, they are going to contribute around INR 250 crores a growth of 20-plus percent. And with respect to the Senator and Polipluz, our newly introduced brands, they will be contributing around INR 70 to INR 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 part, so basically our numbers. So quarterly employee costs in Q4 are down Q-o-Q. Any reason that you can attribute and what should be the quarterly run rate ahead and the CapEx number that you estimate for FY '27?

I didn't get your first part is talking about the employee cost?

Yes. The employee cost. INR 59 crores for Q4, I think it's down about 1%, 2% Q-on-Q. I just wanted to understand if there is anything you want to call out behind the decline?

No. Actually, what has happened is that typically, if you see a expenditure which has been happening on a quarter-on-quarter basis, it has been in the region of INR 65 crores. So Q1 was roughly INR 65 crores. Q2 was also INR 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 INR 5 crores and that is why you find that there was an expense of INR 70 crores in the month of -- sorry, in the quarter of -- but in the current quarter, once we have got a better understanding of the wage code and related laws and who is going to be implemented. We have taken not only -- we can see that there's an exceptional of INR 10 crores write-back, wherein we have put in something like INR 18 crores in Q3 for gratuity and PL liability wherein now we are taking in that liability would be only in the region of INR 7.5 crores to INR 8 crores. And so that there is a write-back of INR 10 crores coming in as an exceptional item. Similarly, in the wage expenses also that during that period, we have provided for certain expenses to the wage code, which we are now anticipating will not be there. So that is why that expense of INR 65 crores, which was INR 70 crores in the Q3 has now come back to INR 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 that and the incremental 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 workers and that impact should start coming in from the -- depending upon when that negotiation actually happens. In respect of the CapEx program, typically, our CapEx is in the range of, you can say, INR 28 crores to INR 30 crores. In this particular year, we are anticipating a total CapEx of something like INR 45 crores. This includes a normal CapEx of roughly INR 25 crores, which we typically do on a year-on-year basis. Roughly INR 5 crores is there for the Faucetware expansion. I'm talking about within this INR 30 crores, there is INR 5 crores for Faucetware expansion. And also another INR 15 crores has been budgeted for the acquisition of some more office space that we'll be planning to do in the current financial year. That will be in the range of INR 15 crores. So total CapEx, taking everything together, between the Faucetware expansion of INR 5 crores and the office space acquisition of something like INR 15 crores would be in the region of INR 43.42 crores.

Next question is from the line of Praveen Sahay from PL Capital.

A small question from my side. You have INR 853 crores of cash. So what's the uses way forward? Have you 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 INR 75 per share, almost 1,500% 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 tracts are coming right now with respect to demand. So the right time of startup of construction of the greenfield will be seen in the coming quarters. So there, the greenfield project was initially estimated at around INR 130 crores, of which land portion has already been purchased, that is INR 27 crores. And considering the 2 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 INR 150 crores. 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'll take action in terms of future investments.

So INR 150 crores apart from INR 27 crores on the land, which you had already incurred?

Yes, yes.

Next question is from the line of Karan Bhatelia from Asian Market Securities.

Sir, just wanted to understand what kind of launch expenses we've booked for Senator and Polipluz in the current year? And what kind of number we can see for next 2, 3 years when we want to have an EBITDA of INR 20 crores -- 20%, 25% on this portfolio?

In the current year, the expenses in Senator mostly focused on opening the brand stores. So we have spent something like INR 4 crores in the current year because this expansion, et cetera, has started from, let's say, after 3 months in the start of the year. So we have spent something like INR 4 crores over here. In the period going forward, now that stores 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 gotten 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, architect consultants, catalogs, print media, there will be some advertising also being done. So for the next year, we expect that INR 10 crores to INR 12 crores would be going in for the senators publicity, et cetera.

Right. Sir, more, 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 Polipluz in the current year was in the region of INR 6.5 crores for Senator and INR 3.3 crores for Polipluz. Going forward, we expect INR 8.5 crores for Senator and INR 7 crores for Polipluz, INR 15.5 crores for both of them taken together. In Publicity, we expect to do something like INR 10 crores to INR 12 crores next year. So this salary expenses is now going to be constant. Like this is the kind of -- as of now, the total -- the structure has already been set up. And so that amount would now be remaining more or less constant at INR 15.5 crores to INR 16 crores. Publicity for the next year is budgeted at INR 10 crores to INR 12 crores may increase again going forward in FY '28.

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

This year, the total losses were in the region of INR 7 crores for Senator and for poly was in the range of INR 1.5 crores. The total losses were in the range of INR 8.5 crores.

Ladies and gentlemen, in the interest of time, we'll take that as 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 Cera Sanitaryware 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 CDR 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 CVR India Cera Sanitaryware Limited, thank you for joining us, and you may now disconnect your lines.