Cera Sanitaryware Limited (NSE: CERA) Q1 2026 Earnings Call dated Aug. 07, 2025
Corporate Participants:
Unidentified Speaker
Deepak Chaudhary — Vice President of Finance and Investor Relations
Vikas Kothari — Chief Financial Officer
Analysts:
Unidentified Participant
Devrishi Singh — Analyst
Archana Gude — Analyst
Praveen Sahay — Analyst
Akash Shah — Analyst
Udit Gajiwala — Analyst
Naysar Parikh — Analyst
Pranav Mehta — Analyst
Girish Choudhary — Analyst
Bhavin Rupani — Analyst
Parikshit Gupta — Analyst
Utkarsh Nopany — Analyst
Presentation:
operator
Sam. Ladies and gentlemen, good day and welcome to the earnings conference call of Acera Sanitary Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call. Ladies and gentlemen, good day and welcome to the earnings conference call of Acera Sanitary Limited. As a reminder, all participant lines will be in the listen only mode 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 0 on your touch tone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Devarishi Singh from CDR India. Thank you. And over to you sir.
Devrishi Singh — Analyst
Thank you, Neera. Good morning everyone and thank you for joining us on the earnings conference call for Sera Sanitary Limited for Q1 FY26 earnings which were announced yesterday. We have with us today the management team comprising Mr. Vikas Kothari, CFO and Mr. Deepak Choudhury, VP Finance and Investor Relations. We will start with brief opening remarks from the management following which we will open the call for Q and 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 will now turn the call over to the management for their opening remarks. Thank you. And over to you Deepa.
Devrishi Singh — Analyst
Thank you, Devashi.
Deepak Chaudhary — Vice President of Finance and Investor Relations
Good morning everyone. On behalf of the management team of. Terra and H2UI Ltd. I would like to extend a warm. Welcome to all of you on our Q1FY26 conference call. I will begin by sharing a brief. Update on our operational and strategic progress. Following which our CFO, Mr. Vikas Kothari will give you the financial highlights for the quarter. In backdrop of continued softness in consumer. Demand across key markets, we are pleased to report a stable performance for this quarter. Our Corset price segment recorded a year on year growth of 13.4% supported by. Stable demand and continued acceptance of our expanded SKU portfolio. In contrast, demand in Sanaktiva segment remained. Soft during the quarter. However, we remain confident that long term. Tailwinds will gradually aid recovery in this category. Over the past few years we have consistently focused on building a stronger, more agile organization through deeper brand segmentation, new channel strategies and a sharper innovation pipeline. We remain confident that these actions will translate into tangible momentum across key growth. Levers going forward as and when the market conditions improve. Our B2B segment continues to gain momentum. Contributing 38% of revenues during the quarter. Compared to 36% in Q1 FY25. We are witnessing healthy order inflows from the real estate sector driven by increased. Construction activity and improved developer sentiment. There are strong brand equity, Product reliability. And execution capabilities have helped deepen our presence in the E2B space, further strengthening our position as a preferred partner for large scale projects. I would like to update you on. Two key strategic initiatives. The company has been consistently advancing its strategy for the Senator brand which is. Positioned at the top end of our portfolio. To give you a bit more color, Senator today boasts of a much expanded. Portfolio with eight full sanitary wear ranges and nine pocket wear collections and a newly introduced wellness range including whirlpools, steam cables and high end showers. This makes it a comprehensive solution for the discerning premium customer. We are engaging in close relationship with. The architects and HNIs supported by a dedicated sales and business development team of over 50 professionals trained specifically for the luxury segment. As of Q1 FY26 we have 23 senator channel partners with showroom displays upgraded to 650 to 800 square feet to create a more immersive brand experience. Our target is to operationalize around 45. To 50 stores by FY26 end. Importantly, these dealers are new and exclusive. To Senators, ensuring brand purity and focus. The pricing strategy is competitive with other. Luxury brands but offer better margins to our partners. We have also introduced a dedicated institutional catalog and pricing to address project led premium demand, a first for this brand. These actions reflect a significant shift in our approach. Senator is no longer a tactical strategy, it is now a fully developed brand. Platform designed to capture a larger share of the luxury segment and drive long term value creation. We believe the groundwork we are laying today positions Senator for a meaningful traction. As the market environment improves. In parallel, during Q1 FY26 we successfully. Launched a new value brand Qualiplus, marking Serra’s strategic entry into deep value segment. Polypas is thoughtfully designed to cater to. The aspirational needs of households in tier 4 cities, towns and villages targeting an approximately 9,000 crore market currently dominated by the unorganized players. Polyplus will offer both PTMK and BRASS. Variants and follows a distinct go to market strategy via hardware stores. We aim to appoint 140 distributors with about 5,000 retail touchpoints by the end of one year supported by a 70 member field force. Product pricing is positioned midway bridging the typical gap between the low cost PTMT and high end brass products to gently push up gradation among the rural consumers to build mindshare among influencers, we have also extended our popular Star Plumber loyalty program to this new channel. Despite being an affordable offering, Polyplus is. Expected to be margin accretive with margin levels comparable to or even better than our current blended margins. Early market feedback has been encouraging and. We believe that this initiative will open up meaningful long term growth opportunities for SARA in these underpenetrated segments. By establishing clear brand segmentation and tailoring our product and channel strategies to suit each target group, we are not only expanding our market reach but also ensuring a sharper focus and positioning across categories. This inclusive approach spanning a wide range of price points, material preferences and regional demand clusters reinforces our ability to adapt. To changing market dynamics while staying true to our core values of quality, innovation and customer trust. While this scale up will take place over time, the initiatives underway today lay a solid base to capture future opportunities. While the timing of a broad based recovery remains uncertain, we remain optimistic about the future prospects of the industry. The long term outlook is expected to stay strong supported by continued formalization of the sector, rising aspiration of the consumers and supporting policy initiatives such as urban. Redevelopment, housing schemes and sanitation infrastructure. These structural drivers coupled with a strong. Brand and distribution reach place us well for sustained outperformance. We believe that the investments we are making today in brands, in distribution and in product innovation will position sera to benefit disproportionately when the market conditions improve. Our focus remains on building an organization that is future ready, resilient and aligned with the evolving aspirations of the Indian consumers. To conclude, Q1 FY26 was marked by. Stable performance despite the challenging demand environment. While the near term softness is persisting, we remain confident in the long term. Potential of the industry and our own preparedness to capitalize on the future opportunities. With ongoing investments in brand architecture, channel. Segmentation and new product development backed by strong in house capabilities, our strategic focus remains on disciplined execution, deeper consumer connect. And creating long term value for all stakeholders. With this I would like to hand over to Mr. Vikas Kudhari. Our CFO will present the operational and. Financial highlights for the quarter ended the 30th of June 2025. Thank you and over to you, Mr. Vikas Kotharia.
Vikas Kothari — Chief Financial Officer
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 ended 30th June 2025. Revenue from operations for Q1FY26 stood at Rupees 419 crores marking a 5.4% increase over Rupees 398 crore in Q1FY25. EBITDA remained stable at 72 crore compared to the same quarter last year. EBITDA margin declined slightly to 16.4% from. 17.5% in Q1 FY25 primarily due to. Inflation driven cost increases and initial expenses. Related to the launch of new brands Senator and Poly. Plus. Gas cost witnessed an increase during the quarter with the weighted average cost standing at rupees 33.17 per cubic meter. In Q1FY26 compared to rupees 31.64 per. Cubic meter in Q1FY25. Despite the rise, our costs remain well below the industry average. During the quarter the gas consumption was sourced 84% from jail and 16% from Sabarmati. Overall gas cost as a percentage of revenue stood at 3.6%. For the quarter under review. Revenue contributions were as follows sanitary ware at 50%, faucet ware at 39%, tiles at 10% and wellness at 1%. On a YoY basis, faucet ware revenue. Grew by 13%, tiles by 5% and. Wellness by 15% while sanitary wear revenues remained largely flat. Our core categories sanitary ware and faucet wear together accounted for 89% of the total revenues. Capacity utilization stood at 92% for faucet wear and 86% for sanitary wear during the quarter. In terms of the product positioning, 43% of our sales came from the premium category, 35% from mid segment and 22% from entry level products. From a geographical standpoint, tier 3 cities led with 42% of sales followed by tier 1 at 36% and tier 2 at 22%. Profit after tax stood at 47 crores. Broadly in line with the previous year’s quarter. Earnings per share for the quarter was. Rupees 36.08 compared to rupees 36.11 in Q1FY25. In terms of the working capital management. Inventory days increased from 75 to 80 days, receivable rates from 32 to 38 days and labor days increased from 41 to 43 days leading to a YOY increase in the net working capital from. 66 to 75 days. However, on a sequential basis, working capital has improved by five days reflecting enhanced operational discipline and stronger collection efforts. As of June 30th 25th, our cash and cash equivalents stood at rupees 778 crores. For financial year 26 we have marked a total capex outlay of rupees 23 crores. This includes routine maintenance as well as. Select investments towards brand building and and expansion of our retail footprints. We will continue to follow a disciplined capital allocation approach aligned with our long term strategic priorities. We remain confident in Terra’s financial health. Strength and long term growth prospects backed by a robust balance sheet, ongoing efficiency improvements and prudent working capital management. We are well positioned to navigate near term uncertainties and seize emerging opportunities as the demand environment gradually recovers. With this I would now request the moderator to open the line for Q and A. Thank you very much.
Questions and Answers:
operator
Thank you very much. We’ll now begin with the question and answer session. Anyone who wishes to ask a question may press STAR in one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles participants. You may press Start and one to ask the question. The first question is from the line of AR from IDBI Capital. Please go ahead.
Archana Gude
Hi, thank you for the opportunity. I have two three questions. The first on the project sales side that that part is growing, you know over quarter and quarter from last few quarters. So can you help us to understand the how it would be as a possibility of sales in near future and also you can help us what kind of typically margins would be there and the micro markets which are seeing the exponential growth in the project business.
Vikas Kothari
Okay so thank you Ashna. Regarding the project part, definitely if you see over last few quarters we have. Seen that the real estate market is. Moving well and this is also evidenced in Sarah’s project bank portfolio also. So on a Y or Y basis if we compare the Q1 versus Q1 of the last year we have registered a growth of 32% in our project bank. So these are the project orders which. We have won and we are seeing. The positive trend in the project bank over the last two three quarters. So this trend will continue and this trend is now going to support considering that the overall positive macroeconomic trends which are visible in our sector so liquidity conditions are getting improved and this will also support our retail segment also. So I think project business is growing. And we are getting larger large value of large order values of contracts over a period of last three or four quarters.
Archana Gude
Right. So some guidance on margin profile and any micro marketing which are growing.
Vikas Kothari
Yeah. So as far as project business is concerned, definitely the margins are little lower as compared to the retail. So margins are lower by 6 to 7% on account of the discounts being offered higher in the project category.
Archana Gude
Okay. Is it possible to bifurcate the sales among the Senator, Sarah Lux and Shera for project sales?
Deepak Chaudhary
As of now, these categories are just developing. So the sales numbers in respect of Sarah and Sarah Lux is negligible. We keep on updating you, maybe start updating you by the end of the year, then the numbers start becoming significant. So as of now you can say that most of the numbers that we are reporting is coming from Sera.
Archana Gude
Maybe one more question. This Polyplus. So can you help us to understand the pricing strategy, some outsourcing mix and the number of SKUs we should expect.
Deepak Chaudhary
In FY26, like in respect of Poly Plus. I’ll just give you a broad outlook in respect of the product, the launch and the market that we are intending to target. As we mentioned in, as the Chairman has mentioned in his press release also that Polyplus is intended to target the tier 3, 4 and the rural market. Now this is one segment where Sera has been completely absent till date.
Archana Gude
And with the launch of this Polyplus.
Deepak Chaudhary
We are targeting the consumers which we are kind of untouched by the Serra products. So primary consumer right now, as we are saying, are the ones who are using the PTMT products. So we have launched a slew of polymer products as well as Brass products. The Brass products have been priced at, you can say point which is midway between the current offerings of Terra and the PTMP products which are being currently offered by the unorganized players. So the idea is to pull them. From the current buying pattern towards the. More aspirational and more longer lasting products which will also meet the price point as well as the quality needs of the particular range of consumer. Apart from that, we are also targeting a kind of replacement market because we are targeting items which will be kind of small value but which will be replaced very pretty fast. So that will consist of, you can say the systems, the seat covers, the health faucets, the connecting pipes, slew of other such polymer products which currently are. We are not, we are doing it for our own products, but we are not targeting the replacement market.
So the idea is over here that. Rather than targeting as a kind of being bundled with our original products, along with our sanitary wear products, and along with our products, these are targeted more as the replacement market. So the idea is that margins would be good. We are expecting that the margins should be higher than what we are getting for our blended margin which we are getting for our current range of products. It should be in the range of EBITDA margin should be in the range of 24 to 25% for this PolyPlus range that we are talking about. At the same time we are also offering a higher margin to the distributors.
Like the kind of margins which are offering to the distributors will also be quite high. So that it becomes attractive for them to stock also the products from their point of view. Main selling point would be the kind of quality that will be offering and the kind of price range that will be offering with the Sera backing. So the top line target for the current years would be kind of in the region of you can say 25 to 30 crore. Because in the sales as of now we are still onboarding the team and the sales should be starting by let’s say end of September, beginning of October.
So we’ll be having only six months. In the current year. And by let’s say end of three years we are targeting that it should be constituting something like 5 to 7% of our total turnover for the Polyplus range.
Archana Gude
Right. So that is. And so lastly it will be completely outsourced. The manufacturing as of now it will.
Deepak Chaudhary
Be outsourced like the brass products. Maybe some things will be announced and some things will be outsourced. For the polymers for part would be completely outsourced as we go forward, depending upon the volume, once we reach a critical volume, maybe we’ll have our own plan coming up. But as of now it will be completely outsourced. Sure.
Archana Gude
Thank you so much and all the best, sir.
Vikas Kothari
Thank you.
operator
Thank you. Next question is from the line of Praveen Sahai from PL Capital. Please go ahead.
Praveen Sahay
Yeah. Thank you for opportunity. Sir, my question related to your, you know the segment in premade and premium in the last two, two years even for this quarter, if I look at your mid segment has outperformed your entry and the premium segment. So these launches, whether it’s a Senator or the Polyplex. So these two are in the view of that to improve your entry and. The premium category way forward. Is it the the case 1. The second thing is even giving a higher distribution margin in the, you know, value value product which you had launched, you are talking about the margin to be on the higher side, even outsource. Mostly you will outsource as well manufacturing. So can you please, you know, give some more color like how it is. You know the margin would be at the same level of what we are doing right now.
Deepak Chaudhary
I’ll take your question in two parts. The first part which you asked was that are we launching the Senator and the Polyplus to kind of supplement the mid range that has been the strongest in our case? I would be like a completely different view on this. Like the way that we are seeing it within the company is both the brands, the Senator and the Polyplus is kind of targeting a customer base which currently Sarah is not targeting. Polyplus is very different. Is going one level below the entry range that Sarah has. The pricing, the product profile, everything is completely different from the products which are currently being offered by Sara. So it is not really kind of. Trying to bolster the entry range of Sarah. It is a range which is different from what we are offering in Sarah and to a customer segment which is different from what we are currently creating catering to at Sarah. Same thing is true for Senator. Also Senator is kind of not targeting the premium customer which like Sarah is more targeting the. You can say mass premium kind of a range which is being offered by Sarah. Senator would be more on the upper like targeting the HNIs and higher more projects which are more premium end. So both are targeting customers which are currently not being serviced by the Sarah product profile.
In respect of the margin, the kind of margins that we are having in spite of it being outsourced and why we are getting higher margins in the case of Senator, higher margins would be but obvious because it is a more of a premium offering. So the kind of margins which you have, the kind of pricing which is happening over there would be obviously higher than what we’re getting for the Sera segment in case of Poly plus the same thing like what we have been able to source is that a good, quite a good margin and even like we have been able to source products.
At prices which are quite reasonable. And we are confident that the margin that we are talking about is something which is very easily achievable.
Praveen Sahay
Okay. Okay, thank you for that. How much is the advertisement expense for this quarter?
Vikas Kothari
So for the quarter the advertisement expense was around 9.3 Cr as compared to the previous year’s quarter, around 11.4 Cr. This differential which is there, this is. The phasing impact reason for being there are certain activities which are planned in the subsequent quarters. So that will be. That will be taken in Q2 or Q3.
Praveen Sahay
All right, sir. And the last question is related to your guidance of the last quarter. You had given to outperform the industry by a 6 to 7% and reach a 29 billion by March 27, along with the margin of 15, 16%. Where you stand on this, you are maintaining this.
Vikas Kothari
So as far as the earlier targets. Which we have given with respect to reaching out 2900 by 27th March 27th, it is. It is to say in this regard is that the market overall, if we see means, this was based on the assumption that the markets will perform and the future growth will depend on the sustained recovery in the retail demand. But however, we have seen while demand challenges are likely to persist in the earlier quarters of this financial year. Also apart from having the slowness in past six to seven quarters, however, we expect that the signs of recovery will start in the second half of the year.
And this is supported by what we are saying, that there are certain positive. Macroeconomic trends which are already visible in the current scenario. The rural economy is gaining momentum driven by a strong harvest, increased government spending and structural reforms. Liquidity conditions have also improved and the retail segment is also showing some signs of recovery. And apart from that, as we have. Clearly told that our project segment project. Business is also moving well where we are having growth in terms of the overall project bank. So with all these improving fundamentals, we remain focused on our earlier saying that we will outperform the market by 6 to 7%. And this is basis the part that the recovery should start in the segment and this is that he will outperform it. So the earlier guidance which was given with respect to reaching out 2900 was based on the assumptions that the market growth of will be there in case of sanity where at around 7 to 8% and in case of pocket layer between 12 to 13% and with the goal to achieve or with the goal to outperform this market growth by 6 to 7%.
However, we have seen that the market growth has fallen short of the expectations. But our long term strategies remain quite. Intact driven by innovation, operational excellence and market expansion. And in this regard, like Deepak has told, we have already launched Senator and Poly plus to cater to the different segments of the consumers. So I think the guidance what we have given of 6 to 7% outperformance. Will be there once the market starts recovering.
Praveen Sahay
Thank you sir and all the best for future.
Deepak Chaudhary
Thank you.
operator
Thank you. AR Kind request a restrict to two questions per participant and rejoin the queue for a follow up question. Next question is from line of Akasha from UTI Mutual Fund. Please go ahead.
Akash Shah
Yeah. Hi. Good morning team. Am I audible?
operator
Yes, sir.
Deepak Chaudhary
Yeah.
Akash Shah
Yeah. Hi. Hi. Sir, sir, just, I mean two, three questions. So sir, wanted to ask sir, how much cost has come into the P L for Senator and Polyplus brand?
Deepak Chaudhary
As of now the cost which would have gone into the Senator and Polyplus would be quite minimal in the sense that the onboarding has just started from the month of July. So the staff costs, et cetera, would have come into the pnl. But I can give you a kind. Of broad outlook in respect of the. Full year, kind of projections that we have. Once it becomes fully operational, once we have the entire team in place, we are kind of projecting that more or less the staff cost should be in the region of 13 to 15 crores would be added for these two brands, Senator and Polyplus. Taken together, this is the cost per annum once the entire team comes on board. Okay. And. You can say for publicity out of that amount that we have earmarked for the company specific amount has been earmarked for this Senator and Poly Poly plus brands as well as Lux. So typically in the first year it will be mostly. The spending would be mostly for the generation of showrooms. In the case of Senator, Poly plus is something which will not require too much of brand publicity support. It will be more first, first year will be kind of setting up the distributors, getting the retail channel in place and then maybe from the next year onwards we’ll start having more responses towards publicity.
So for total Senator and Lux out of the, we can say the amount of 60 crore that we typically spend on publicity on a per annum basis, roughly you can say 11 to 12 crore should be going for Senator and Lux brand taken together.
Akash Shah
Right. So 11 to 12 crore for Senator and Lux and rest 35 to 40 crore would be for Sarah brand. Okay. And sir, also just wanted to understand, I mean this quarter we saw around 5% growth on a base of minus 6% growth in the first quarter FY25. So, so on a two year CAGR basis there was, there was some decline in absolute revenue.
So, so just wanted to ask, I mean going forward, let’s say, let’s say we hope for some recovery in second half, but are we, are we broadly implying that the growth in, in full year FY26 would be let’s say less than 10%? I mean what is the broad thought process on, I mean what is the broad expectation on top line growth front in FY26 and if you, if we can break it up in sanitary wear as well as faucet segment, what is.
Vikas Kothari
The growth that will help? So I think I have answered the question regarding the outlook part both short term and long term. But having asked about this year’s roadmap or this year’s how we will progress. So we are progressing strongly as far as our operational excellence and the reach with respect to market is concerned. Now talking about what is going to be the number at the end of the financial year 26. So with the expectations what we are having and with the some positive change what we are seeing on the macroeconomic levels we understand that the momentum, early signings of recovery have started.
And we see that this will continue over a period of time. But always I used to say this. Is subject to how actual the market will perform. But we understand that with the. With the type of recoveries what we see from H2 onwards we expect that we will be ending with a higher single digit number or maybe start of the this double digit number.
operator
Thank you very much. Akash. I’ll request to come back for a follow up question please. Thank you. A request to all the participants. Kindly restrict to two questions per participant and rejoin for a follow up. The next question is from line of Odit Gajeewala from yes, securities. Please go ahead.
Udit Gajiwala
Yeah. Thank you for taking up my question, sir. So it’s pertaining more to the margin outlook for the company. So when you look at the project business since it’s growing the margins are bit under pressure. And you also say that you know it’s lower than the retail segment. And though you all are growing your senator and the new brand now it will still be 5 to 7% of sales in coming years. So at least for coming 2, 3. Years do we see that the margins will be sub 15 for the company. Given that the major growth will be from projects now.
Deepak Chaudhary
We expect that the margins should be maintained at the region of 15 to 17% that we have been maintaining in the last few years. We don’t anticipate a very high jump coming in as you mentioned because of the fact that the senators would be constituting a small proportion of the total sales in the next two to three years. But because of the fact that the project portion is increasing we don’t anticipate too much of challenge in the overall margin of the company. Because we have been taking measures for controlling costs also at the operational side.
So from our perspective that number of 15 to 17% is something that is a holy grail and we intend to maintain for the next two, three years.
Udit Gajiwala
Okay, sir. Understood. Yes. That’s it for my. Thank you.
Vikas Kothari
Thank you.
operator
Thank you. Next question is from Nanuque Nehasar Parikh from Native Investment Managers. Please go ahead.
Naysar Parikh
Hi. Am I audible? Yeah. So my question was that, you know, obviously there is market is not, you know, good right now, but just from a competition perspective, what are the threats. That you’re currently seeing? If you can just elaborate on that. Are we losing market share in any segment? That would be helpful. And especially when the market does well and some of the smaller players, you know, players like Kajara, etc. Who are not big in sanitary wear, faucet wear, but even if they also start getting aggressive, you know, what is our thought around that? So any thought on that will be helpful.
Vikas Kothari
You’re talking about the threats from the competition. Now, basically what we have found that over the last six to seven quarters, where the market has not been doing too well, it has been subdued. The major kind of problems that we have faced in the market is the kind of discounts which have been offered by the competition because of the fact that they have already got good capacities and they are trying to. The market has not been too great. So the discounts have kind of gone up. So we have been trying to hold on to the kind of margins that we have making in a particular sector, both in the project as well as in the retail sector. So we anticipate that once the retail market starts improving, even from the competition side, the kind of discounts, higher discounts which have been going at their end should start coming down and reach a level where everybody would want to make profits. That would be true for also the new entrants which are there because as of now they are more intent on trying to gain volume.
So as of now, the broad threat which is there in the market is the kind of pricing which is prevailing because of the fact that have been over capacity with the existing players and also capacity addition, where new players, players which have come in. But that will be on a, if you talk on a long term perspective, something which is a short term problem and as the market improves, that trend should disappear.
Naysar Parikh
Hello. Sorry. Hi. I was saying. So is it fair to assume to. Protect our margins we have lost our market share in some pockets, maybe we.
Deepak Chaudhary
Have not lost market share, but we have been, you can say, not been answering like the other competitions where they have compromised on margins and have been totally focused on gaining volume. We have kind of, you know, maintained our volumes and also maintain the margins.
Naysar Parikh
And if you can just elaborate right, what are we doing and some points. Maybe you alluded to, but just protecting our dealer, distribution or project level clients because as the market improves, people are not seeing profitability. Now as they start seeing volumes and profitability, nothing stops them from expanding. Right? Everyone has like one plant, very little. Capacity and they all have capital, private equity backing. So once market improves, they will also start investing. So when that scenario happens, how do. We protect our market share and our dealers? What are we doing today to ensure. That when they come aggressively, we don’t lose market share at that time or we are not prone to the same discounting at that time.
Vikas Kothari
Also, the capacity additions have in fact already happened. We find that most of the players which have come in, they have already started putting up their own plant. So that is where the current situation has evolved because the capacity additions have come in at a point of time where the market has not grown. The capacity additions happened in anticipation of. A growth in the market. Because post Covid there was a huge surge in the kind of demand which was there in the market that prompted kind of capacity additions from both the incumbent players as well as the new players which had come in. So capacity additions have already happened and we don’t anticipate further capacity additions to happen once the growth starts coming in. It has already happened. So once the growth is there, you’ll find that the kind of situation which is prevailing right now will reverse.
operator
Thank you very much. Nyasa. May I request you to come back for a follow up question please.
Naysar Parikh
Okay, fine.
operator
Thanks. Thank you. Next question is from the line of Pranav Mehta from Equity Securities. Please go ahead.
Pranav Mehta
Yeah. Good morning sir. Thank you for taking the question.
Pranav Mehta
Can you please speak through the handset?
operator
Now it’s clear.
Pranav Mehta
Okay. Yeah. So I wanted some clarity on the absolute numbers on the sanitary wear pocket and dies that you had done in this quarter and similarly correspondingly in 1Q25. If you can help with that.
Deepak Chaudhary
I’ll just give you the numbers for sanitary wear. I’ll tell you the current quarter numbers first. In sanitary wears, the turnover was 208 crores, 208.67 crores. Faucet wear was 161.85 and wellness was. 6.29 crores and tiles was 42.61 crores. I’ll just repeat the numbers. Sanitary wear 208.67. Faucet wear 161.85. Wellness 6.29 and tiles 42.61. The corresponding numbers for Q1 FY25 was sanitary ware 209.23. 209.23 crores. So we are comparing 209.23 with 208.67. 208.67 in the current quarter. VIS A VIS 209.23 in the previous quarter so it is more or less flat. Perfect wealth was 142.70 in the previous quarter. We have 161.85 in the current quarter. So it’s a growth of 13.4%. Wellness 5.49. Against that we are 6.29, 14.6% growth. And tiles was 40.59 crores. We are 42.61 in the current quarter growth of 5%.
Pranav Mehta
That’s it for myself.
operator
Thank you. Thank you. Next question is from line of Girish Chaudhary from a vendors path. Please go ahead.
Girish Choudhary
Yes. Hi, good morning. Firstly on the capital allocation, just wanted to check, I mean last year we did a buyback close to 12,000 rupees per share and if you look at the current price it’s almost 50% down. And we also alluded that we have a very limited capex budget this year and close to 800 crores of cash. So can we expect our. Are you thinking of implementing one more buyback or in general how are you thinking about capital allocation?
Deepak Chaudhary
We have been steadily increasing our dividend payout. If you see we were earlier paying something like 13 rupees 34 years back. From that we have come to 65 rupees payout in the current year. So dividend has been steadily increasing and we expect that this kind of dividends which we have been increasing in the past few years that should be steadily maintained an increase in the coming years. Also in respect of buyback it is kind of as of now it is uncertain like we don’t have any plans right now and that can be only told to you once we board decides something in that respect that we need we are going to have a different another buyback or something like that.
But as of now we can talk about the dividend kind of policy which is we can say increasing in a steady manner.
Girish Choudhary
Okay. Okay, got it. Secondly on again just on the market share and let’s say the core sanitary wear business part, right. We, I mean we are seeing the business to decline and despite a very low base. Right. Last year also same quarter we had a decline and you also mentioned that you have been maintaining volumes but the absolute revenues are declining. So how should one read this? Is it, is this also due to higher discounting which you’re doing or also function of lower price points? So I understand the Market is depressed. But I mean, if you can help us understand this revenue decline.
Vikas Kothari
See, the primary reason for the kind. Of decline which has happened in the sanitary sector is then it’s been the market. Your answer that question within your question itself. But to give you a broad profile in respect of the kind of what is happening in the sanitary wear within Serra. Like if we talk about the kind of product profile which we had, let’s say four to five years back and the kind of product profile which we are having right now that has undergone a complete change like earlier. Like again, if you go back for three to four years back, the kind of products were basic.
It was something that we used to sell in large volumes. Now you’ll find that we are moving more towards products which are high value. We have internalized most of the items that we were kind of importing from China that we have internalized and we have started manufacturing within our manufacturing facility. So the product profile has undergone a change. Now you’ll find that the sanitary ware market per se also is different from that of faucets in the sense that. The life cycle of a sanitary ware. Product is very different from that of faucets. The replacement which happens, happens at a much longer period as opposed to faucet wear. So there has been a kind of. Glut which has come into the sanitary wear kind of market and within sera. But we have started already started seeing trends which have now in the sense that there was no further decline in the current quarter and we anticipate that in the coming quarters also that trend should be reversing.
Girish Choudhary
No, but the specific question was like you said, you maintained volumes, right? But we are seeing revenue declines and at the same time you’re telling your positioning or you’ve seen premiumization. So I mean, there is some disconnect there, right? I mean, is it a market share loss then?
Vikas Kothari
So that’s what I’m trying to explain. That the kind of product profile that has happened in the case of sanitary wires is different from what we were having earlier. Earlier it was smaller items, larger volumes at lower price point. Now we have moved to lower volumes, higher price points and the pricing which is there with respect to competitors. They are obviously because you are in the market, you have to match the kind of prices which are being offered by the competition. But more or less we have maintained margins. The kind of profile has completely undergone the change within the Thanatiware system itself.
Girish Choudhary
So we have. We also taken discounts over the last one to two years.
Vikas Kothari
The kind of discounts that we have taken it had gone up by something like you can say 2 to 3% in the last 6, 7 quarters which is now started on a stabilizing mode. We have not started reversing it but it is not going down any further.
Girish Choudhary
Got it. Fair enough. Thank you. And all the best.
Devrishi Singh
Thank you.
operator
Thank you. Next question is from the line of Bhavindrapani from Investec. Please go ahead.
Bhavin Rupani
Hi sir. Thank you so much for the opportunity. I had three questions. First is credit right back. We have taken some credit right back in FY25 crores. What is it right now? Second question is on outsourcing mix. Can you just do.
operator
Your audio is not clear. Can you please speak for the answer and repeat your question from the beginning please.
Bhavin Rupani
Am I audible now?
Vikas Kothari
Yeah, we can hear you now. Yeah.
Bhavin Rupani
Yes sir. We had taken some credit right back in FY25 to the tune of 34 crores. So can you just tell us what is. What is number in Q1? Second question is on outsourcing Mex. Can you tell us what is outsourcing Mix and faucet and sanitary both. And third is on sanitary wear. Greenfield expansion. What is the status as of now?
Deepak Chaudhary
Okay, I’ll answer it in the reverse order. Sanitary ware greenfield expansion. We have already undertaken the purchase of land. The land acquisition has been completed but the construction on the land has not yet started. We’ll take a view by the end of the we can say current year. We don’t anticipate the construction to start within this current year. At the end of the current year we’ll again take a review. And based on the review, the market conditions, how it has changed over the next six to nine months. We’ll take a view whether we need to start construction by the end of the year.
In respect of the outsourcing mix. I’ll just tell you in respect. In case of sanity ware outsourcing was 57%. Manufacturing was 43%. In the case of faucet wear, outsourcing was 48% and manufacturing was 52%. I’ll repeat that again in cash. Sanitary ware 57 and 43 for outsourcing and manufacturing respectively and for faucet were. 48 and 52 for outsourcing and manufacturing respectively. Coming to your first question in respect of the credit write backs. The credit write backs were mostly on account of provisions that we had done in respect of the kind of sales discount, the PO turnover discounts which are given to the sales to our dealers. Now the discounts which are provided for are based on the estimate that the dealers will be meeting their targets. Once we found that the dealers are not meeting the target, the actual discount came out to be much lower than what we had provided for that to a write back in the previous year, in the current year, in the current quarter.
I’ll just tell you the figure. The amount of write back which has been there. The write back has been to the extent of 2.73 crores compared to 6 crores in the previous quarter.
Bhavin Rupani
All right, Got it sir. Thank you so much.
operator
Thank you. Next question is from line of Samya Jain from Mercelus Investments. Please go ahead.
Unidentified Participant
Good morning sir. Sir, my only question is. So our sanitary wear revenues in the quarters has been flattish. Whereas we have grown in our faucet by 14% and our projects business have grown by 32% y o y basis. So would it be fair to assume that the growth that you are getting in the project side it’s majorly from the faucet wear instead of sanitary wear. So just wanted to know your thoughts on that.
Deepak Chaudhary
The project business does not have grown by 32%. What Prakashi mentioned was that the kind of projects that we have won in the current quarter is higher by 32% in the.
As opposed to the Q1 of the corresponding corresponding Q1 of the previous year. The sales would be translating in the next few quarters. But that gives you an idea about the kind of trend where it is moving for project allocation. Your question was that has the most of the increase in the project has been from the faucet wear side. I don’t have that number ready with me right now. So maybe I can get back to you on that on an offline basis as to what kind of growth has happened in the faucet wear and in the sanitary wear in respect of the project segment.
Unidentified Participant
Sure sir. But directionally what would be a bigger portion in the project sales?
Deepak Chaudhary
I think the kind of proportion that we have for our overall numbers for company would be true for your faucet also for the project segment also.
Unidentified Participant
Sure sir. Got it. Thank you so much.
operator
Thank you. Next question is from Parikshit Gupta from Fair Value Capital. Please go ahead.
Parikshit Gupta
Thank you very much for the opportunity. I just have one question. You mentioned that you already see signs of a turnaround of market demand. Can you please articulate which specific economic segment is it the more mass premium segment or a relatively more premium lux. Segment that you are seeing the recovery in? And if you could also give this answer for both sanitary wear and posit wear, please.
Deepak Chaudhary
Thank you so regarding the revival of the recovery. So as we have, as we have seen in the past as far as luxury segment is concerned, we have seen over past few quarters that it is growing and that’s why we are also coming up with our Senator Brand and Sarah loves Brand. So that is one area which is growing. The area which was largely impacted was the mass premium categories where the demand was sluggish and it is continuing. So but what we are saying that this segment is also now seeing some traction in terms of revival. So our expectation is that the numbers what we have seen right now with respect to Q1 where we have achieved. 5.4% YoY growth in respect of this mass premium segment. So we expect that this recovery trend. Will further strengthen over a period of time.
Parikshit Gupta
Understood sir. This is helpful. Thank you very much.
operator
Thank you. Next question is from the line of Utkarsh Napani from Bob Capital. Please go ahead.
Utkarsh Nopany
Yeah, hi. Good morning sir. So my first question is on the margin side. So if you see our EBITDA margin has contracted on a bio basis despite a weak base of last year which got affected due to the general election. So wanted to understand whether the market condition was so depressed in the current June quarter that we are not able to pass on the commodity cost inflation pressure to the consumer.
Vikas Kothari
See, there has been no price increases in our sector for quite some time. We have not taken a price increase in sanitary ware for quite some time in faucet where we have taken a 6% price increase in the previous year, I think in sometime in September.
So in the if you’re talking about price increases for that we need to have a significant revival in the market and as I mentioned earlier it has to come in from the competitors also wherein everybody is then kind of pricing their products in the right manner. So as of now we are more intent on trying to maintain the margins which are there. Which to be very specific, like if we talk about the current quarter, the gross margins were slightly down on account of the increase in the input prices, you can say by roughly 1 1/2 percent.
The gross margins had come down. But apart from that we have kind of been able to maintain the margins. The increase in cost there had been slight increase in the cost with the respect of the employee cost, that is again on account of kind of annual increase which keeps on happening on a regular basis. Typically this year the average increments to the staff was in the region of you can say 10 and a half percent, 10 to 10.5%. And the staff cost roughly constitutes something. Like 2/3 of our total employee cost. So that will be translating into something like if you see on a quarter on quarter basis Q4 to Q Q1, I think it will be translating to something like 6.6 to 6 and a half percent increase in the cost. So the costs which are fixed in nature have been increasing on a, you know, in the first quarter it kind of results in a marked increase. But we are confident that going forward as the full year kind of goes by and we are having a increase in volume in the subsequent quarters and the full year basis, we should be able to maintain that margin of 15 to 17%.
Utkarsh Nopany
Okay, answer last question is that what is your cricket right back amount for the smarter period that is Q4FY25.
Vikas Kothari
Q4FY25. I don’t have the figure with me right now. Maybe I can give it to you again on an offline basis. But right back you’re talking in respect of Q4 the Q1 numbers. I had already told you like it was something like 2.73 crores.
Utkarsh Nopany
Also because there has been a sharp. Fluctuation in your margin on a quarter on quarter basis. So just wanted to understand is it only because of the credit write back amount?
Vikas Kothari
Part of it would be on account of that because the credit right back had happened in one of these, I think Q4 there was a substantial write back if I remember correct. So that fluctuation would be there to that extent.
Utkarsh Nopany
Okay, thanks a lot sir.
operator
Thank you very much. Ladies and gentlemen, due to time constraint, we’ll take that as a last question and I’ll hand the conference over to the management for closing comments.
Deepak Chaudhary
Thank you everyone. By attending this call and showing interest in Sera Sanitary well 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 time to join the call. Thank you and bye.
operator
Thank you very much on behalf of CBR India. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.