Cera Sanitary. Q2 FY27 Results (NSE: CERA)
Signal: Margin pressure
The read
The trajectory is a volume-or-growth-positive but margin-negative quarter: revenue growth accelerated to 27.28% YoY from 19.46% in Q1FY27, yet gross margin compressed 529bps to 43.95% as raw-material consumption rose to 17.43% of revenue, keeping derived EBITDA growth at just 0.55% and PAT down 0.90%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹602.96 Cr | +27.28% | +24.07% |
| Net profit | ₹56.14 Cr | -0.90% | |
| EPS | ₹43.52 | -0.91% | |
| EBIT margin | 13.96% |
P&L walk
Revenue accelerated to ₹60295.95 lakh, up 27.28% YoY and 24.07% QoQ, but gross margin fell to 43.95% from 49.24% as raw-material consumption rose to 17.43% of revenue from 13.48%; derived EBITDA margin consequently fell to 13.96% from 17.68%, while PAT declined 0.90% to ₹5613.62 lakh.
Key positives
- Revenue from operations rose 27.28% YoY to ₹60295.95 lakh, accelerating from Q1FY27 growth of 19.46%.
- Employee benefits expense grew 10.69% YoY to ₹7219.88 lakh, 16.59 percentage points slower than revenue growth, limiting fixed-cost pressure.
- Operating cash flow rose 87.89% YoY to ₹14275.92 lakh in H1FY27, exceeding H1 profit before tax of ₹13283.09 lakh.
- Finance costs declined 15.75% YoY to ₹138.14 lakh, while the company remained in a net-cash position of ₹1790.70 lakh at 30 September 2026.
Key concerns
- Gross margin compressed 529bps YoY to 43.95% as raw-material consumption increased to 17.43% of revenue from 13.48%, indicating significant input-cost absorption.
- Derived EBITDA grew only 0.55% YoY to ₹8416.57 lakh versus revenue growth of 27.28%, and derived EBITDA margin declined 372bps to 13.96%.
- PAT declined 0.90% YoY to ₹5613.62 lakh despite 27.28% revenue growth, showing that top-line acceleration has not yet translated into earnings growth.
Research and educational content only. Not investment advice.