Cera Sanitaryware Limited (NSE: CERA) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Mayank Vaswani — Investor Relations
Deepak Chaudhary — General Manager, Finance and Audit
Vikas Kothari — Chief Finance Officer
Analysts:
Unidentified Participant
Jaspreet Singh — Analyst
Arun Nair — Analyst
Nikhil Gandhi — Analyst
Bhavin Rupani — Analyst
Mithun Aswath — Analyst
Archana Gude — Analyst
Presentation:
operator
Ladies and gentlemen, good morning and welcome to the Q3FY26 earnings conference call of Sera Sanitary Ware Limited. As a reminder, all participant lines will remain 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 the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded and the duration of the call is 45 minutes. I will now hand the conference over to Mr. Mayank Vaswani from CDL India for opening remarks.
Thank you. And over to you, Mang.
Mayank Vaswani — Investor Relations
Thank you, Ryan. Good morning everyone and thank you for joining us on the earnings call for sera Sanitary Ware Limited for the Q4, sorry, Q3 FY26 earnings which were announced yesterday. We have with us today the management team comprising Mr. Vikas Kothari, CFO and Mr. Deepak Choudhary, VP Finance and Investor Relations at Sara Sanitary Ware. 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 would now like to turn the call over to the management for their opening remarks. Over to you, Deepak Ji.
Deepak Chaudhary — General Manager, Finance and Audit
Thank you Ma’. Am. Good morning everyone. On behalf of the management team of Sarah Sanitary Way Ltd. I would like to warmly welcome you to our Q3 FY26 earnings conference call. I will begin by sharing a brief update on our operational and strategic progress following which our CFO, Mr. Vikas Kothari will take you through the financial highlights for the quarter. During the quarter, the company delivered a healthy top line growth of 11.1%. This follows the sequential recovery witnessed in the previous quarter where revenues grew in the range of 5 to 6% indicating a steady strengthening trend.
The improvement reflects a gradual revival in the market conditions as well as the company’s improved market traction. The current momentum provides confidence that the recovery is structural in nature and that the expectation is that this growth trajectory will remain sustainable in the near term. Supported by improving demand conditions and continued operational focus. The real estate sector continues to witness a healthy residential upcycle along with increasing premiumization, driving demand for higher value building and lifestyle products. In parallel, rural demand has shown a meaningful recovery. Encouragingly, we are seeing early signs of a modest improvement in underlying demand conditions across both faucet wear and sanitary Ware.
While near term consumption trends remain uneven, we continue to see green shoots across categories and channels, and our strategic initiatives over the past two years are helping us to navigate these space with greater agility. As we have shared over the last few quarters, our focus has been on steadily strengthening the company’s strategic foundation. This includes sharper brand positioning, more clearly defined channel strategies and a disciplined approach to innovation. These efforts are improving our preparedness and execution capabilities, and we believe that they place us in a stronger position to capture growth as demand conditions gradually improve.
Importantly, our strong brand equity, execution, reliability and long standing relationships with developers continue to enable participation in larger and more complex projects, making this segment an important support pillar during the current demand cycle. On the strategic front, Senator and Polyplus continue to remain key levers to build out the next phase of our brand architecture. During the quarter, our efforts remain centered on strengthening the organizational structure, manpower and supporting infrastructure across both the initiatives. For Senator, the team structure is now largely in place and the rollout of flagship stores is progressing steadily. With 32 stores currently operational, the company is now adopting a more calibrated approach towards further expansion.
This is aimed at sharpening first row performance metrics and ensuring that the operating fundamentals are firmly established. As the format scales, the brand continues to be positioned around a differentiated retail format supported by a dedicated channel strategy, a focused engagement model and an expanding product portfolio. While the balance sheet provides ample growth capital, the company remains committed to disciplined execution as it scales this initiative. Polyplus also continues to be in the investment and buildup phase. The team buildup is now largely complete and we are focused on strengthening distribution on ground execution and market presence across select value focused markets.
At this stage, our priority remains on establishing the operating framework and execution capabilities rather than near term scale. At present, Polyplus is being distributed through 65 distributors and 750 dealers. Over the past few years, we have continued to sharpen our brand segmentation and align product propositions and channel strategies with distinct customer segments. This portfolio led approach enables us to address a wide range of price points and regional demand patterns while retaining flexibility to manage near term volatility without diluting long term brand positioning. While near term retail demand continues to remain uneven, the long term fundamentals of this category remain intact.
Structural factors such as improving housing quality, urban redevelopment, rising consumer aspiration and increasing formalization continue to support the long term demand outlook for banded bathroom solutions. We also expect broader policy measures aimed at supporting consumption and housing activity to remain helpful for category sentiment over time. When combined with our established brands, extensive distribution network and execution capabilities. These trends provide us with confidence in the near to long term opportunities. As highlighted earlier, the rollout of our dealer management program remains an important ongoing initiative and is progressing steadily going forward. The system will help improve visibility into secondary sales and channel inventory over time, enabling more informed decision making and tighter channel management.
The company’s retailer loyalty program with over 28,000 enrolled retailers is planned to transition from the current manual invoice, upload and verification process to a fully automated system. Once the dealer management system stabilizes going forward, purchases made through DMS enabled dealers are expected to be captured automatically with loyalty points credited without retailer intervention. This digital shift is intended to enhance efficiency, improve accuracy and deliver a faster, more seamless experience for the retailer ecosystem. During the quarter, capacity utilization stood at 102% for faucet wear and 82% for sanitary wear. We continue to focus on disciplined cost management and operational efficiency across the supply chain, operations and distribution aimed at protecting margins and strengthening the resilience of the business amid input cost pressures and a mixed demand environment.
To summarize, while demand conditions may take some additional time to normalize, our focus continues to be on disciplined execution, strengthening our operating fundamentals and preparing the organization for the next phase of growth. With a strong balance sheet, a diversified portfolio and sustained investment across brands, channels and systems, we believe that we are well positioned to navigate the current environment and capture opportunities as demand conditions improve over time. With this, I would like to hand over to Mr. Vikas Puthari, our CFO, who will present the operational and financial highlights for the quarter ended 31st of December 2025.
Thank you and over to you Mr. Kothari.
Vikas Kothari — Chief Finance 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 and nine months ended 31st December 25th. Revenue from operations for the quarter stood at Rupees 499 crores as compared to Rupees 449 crores in Q3FYF25. EBITDA without other income for the quarter was at Rupees 51 crores as compared to Rupees 59 crores in the corresponding quarter of the previous year. EBITDA margins stood at 10.2% in Q3FY26 as compared to 13.2 in Q3FY25. This decline was primarily driven by an increase in trade discounts and elevated brass input costs impacting both manufacturing and procurement.
Margins were also weighed down by higher publicity spends which was a phasing impact and pre operative expense associated with Poly plus and sanitar brand launches. Gas costs during the quarter increased with the weighted average cost at Rupees 35.70 per cubic meter in Q3FY26 as compared to Rupees 33.53 per cubic meter in Q3FY25. During the quarter gas consumption was sourced 69% from Yale and 31% from Sabarmati. Overall gas cost as a percentage of revenue stood at 3.8%. Prices remained unchanged during the period. At the same time, input costs, particularly brass clay have moved meaningfully in the recent periods.
Given the sustained nature of these cost pressures, we have recently announced a calibrated price increase both in faucet wear as well as sanitary wear. This approach is intended to balance margin protection with market competitiveness. For the quarter under review, revenue contributions by segment was broadly as follows sanitary wear at 48%, faucet wear at 40%, tiles at 10% and wellness at 2%. On a yoy basis sanitary wear revenue grew by 6.4%, faucet wear by 18.2%, tides by 5.7% and wellness by 29.4%. Our core categories sanitary ware and faucet wear together accounted for 88% of the total revenues.
Capacity utilization during the quarter stood at 82% for sanitary wear and 102% for faucet wear. From a product mix perspective, 44% of sales were from premium segment, 35% from mid segment and 21% from entry level products. Geographically, tier three cities accounted for 41% of sales followed by tier one at 36% and tier two at at 23%. Profit after tax stood at rupees 24 crores as compared to previous year’s quarter at rupees 46 crore. During the quarter we recorded a one time impact under exceptional items. Following the implementation of the new wage code, the revised base structure has resulted in an increase in long term employee benefit liabilities.
We have recognized an incremental impact of 12.2 crore towards gratuity and rupees 6.26 crore towards lease salary liability under exceptional items in the statement of profit and.
Vikas Kothari — Chief Finance Officer
Loss.
Vikas Kothari — Chief Finance Officer
Earnings per share for the quarter was at Rupees 18.35 compared to Rupees 35.56 in Q3FY25. On the working capital front, inventory days decreased from 85 days to 84 days. Receivables decreased from 34 days to 33 days while payables remained stable at 38 days leading to a Y o wide decrease in net working capital from 81 days to 79 days. As of 31st December 25th, our cash and cash equivalents stood at rupees 757 crore. Our capital expenditure plan for financial year 26 remains measured with an outlay of around rupees 13.2 crore by end of December 25th.
This was largely directed towards routine maintenance along with selective investments to strengthen brand presence and retail initiatives. Capital allocation continues to be guided by discipline, return visibility and a strong focus on maintaining balance sheet strength. Overall, our financial positions remains healthy, supported by a strong balance sheet, disciplined cost management and prudent working capital practices. This provides us with the flexibility to navigate the current operating environment while continuing to invest selectively in strategic initiatives. We believe this balanced approach positions the company well to deliver sustainable performance and create long term value as demand condition improves over time.
With this, I would now request the moderator to open the lines up for Q and A. Thank you very much.
Questions and Answers:
operator
Thank you ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use their handsets while asking a question. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to two questions per participant and rejoin the question queue. One moment please. While we poll for questions.
operator
We take.
operator
The first question from the line of Jaspreet Singh from Equintus pms. Please go ahead.
Jaspreet Singh
Yeah, hi, good morning everyone.
Jaspreet Singh
My question is related to the EBITDA margin drop. So the 300 basis point drop in EBITDA margin and gross margin. Just trying to confirm. It’s largely coming from faucets and largely because of the brass price increase. Can you confirm?
Mayank Vaswani
So as we have told in our brief review, so I will repeat again. So the drop in margins EBITDA margins by 3%. This was primarily driven by the increase in the trade discounts. So discounts largely increased on account of the participation higher participation in our project. If you see our project spends have increased by 12%. If you compare the YOY comparison retail in case of retail segment discounts were largely broadly stable. Additionally the cogs increased mainly due to the increase in the input cost. So brass prices have increased by roughly 12%. And this elevated brass prices have impacted both in manufacturing as well as the external procurement cost.
And apart from that we have Some higher spend in Q3 with respect to publicity which was a phasing impact and some pre operative costs related to Senator. So overall if we see to mitigate this impact of increased brass prices, we have recently announce the price increase both in case of faucet wear as well as sanitary. I hope I have answered your question.
Jaspreet Singh
Yes, yes, you are beautifully explained. Thank you so much.
Jaspreet Singh
So just related to that, you know I. I haven’t seen 10 kind of a beta margin in the last decade or so.
Jaspreet Singh
Annual basis.
Jaspreet Singh
So I’m just surprised and confused and you know, disappointed at the same time that a quarterback or let’s say we were riding a 14 to 15% kind of a margin and suddenly that trajectory shifted to 10% and even there we are now talking of calibration, calibrated price increases. So what has so drastically changed in the world of building materials and given it’s a branded product that we see a 10% EBITDA margin multi decade low and I don’t know.
Deepak Chaudhary
So your views on that? See what is happening is we are looking at one quarter and we are trying to extrapolate it that it is going to be there for the future also. So we don’t anticipate that this is going to be the trend going forward. Once we go into Q4 you will find that the top line Even otherwise in Q4 is much larger which leads to a better absorption in fixed cost. So it has been due to some of the phasing impacts that the sum costs in Q3 had been higher. For example, as Mr.
Vikas mentioned, the publicity costs had been in a phased manner been higher in Q3. Like the total budget for the year remains the same. But for Q3 the expenditure had gone up same way for CSR activities. Also the bulk of the expenditure that happened in Q3 so it is higher during this particular quarter also as we have embarked on that new ventures of Senator and Polyplus. So this is a kind of impact which has started happening from Q3. And once the top line also starts coming in, Senator and Polyplus will find that it will be able to absorb and account for better margins.
So this is a one off kind of a thing and not something which is expected to remain on a steady basis of the future going forward in Q4 by itself you’ll find that we are going to be returning back to the margins of at least 13, 14% that we had been having in the last few quarters. So to summarize, I will say it’s one off kind of a thing. And we’re not expected to continue as a trend.
operator
Thank you. We take the next question from the line of Karan Bhattalia who is an individual investor. Please go ahead. Karan, please unmute your line and proceed with your question. Since there is no response, we’ll move on to the next question which is from the line of Sunny who is an individual investor. Please go ahead.
Unidentified Participant
Hello sir, am I audible?
Deepak Chaudhary
Yeah, we can hear you.
Deepak Chaudhary
Yeah. So I just wanted to know, we were earlier one or two, a couple of years back projecting a 17% revenue growth over the next two, three years. So what is it happening? That even though the real estate sales from 2022 or 21 onwards were very good, that this, our sales has been highly stagnant over the last three or four years and we are unable to even grow our market share or our sales even though we are holding on to our margins barring increase in brass prices or whatever. But. So when do you expect this above 15% revenue growth in the future given that the real estate cycle had started some time back and the construction companies were doing well.
So if you can throw some light on that.
operator
I’m sorry to interrupt you there, but your audio is not clear.
Unidentified Participant
So.
operator
It’s still not clear. Just give me one moment please.
operator
Sam.
operator
Ladies and gentlemen, we have the management line reconnected, sir, you may proceed.
Unidentified Participant
Yeah, sorry, the line was not clear. Am I audible right now?
operator
Yes sir.
Unidentified Participant
Yes sir.
Deepak Chaudhary
Yeah. So just to answer your question, like you’re right that for the last two years there had been stagnancy in the growth. But if you have been listening to our course, you’ll find that we have been projecting that H2 we expect the revival to happen and in fact Q3 we see that it has been grown by 11.1% and Q2 also we had grown by in the range of 5 to 6%. So the growth trajectory has already started happening and we are confident that even Q4 we should be able to maintain this kind of growth and we should be ending the year as we projected in the earlier con call by roughly 7 to 8% on an overall full year basis.
So now we find that the kind of stagnancy which had come in the retail market has started improving and going forward we expect it to be much better.
operator
Thank you. We take the next question from the line of Valon Jalastria from 361 Capital. Please go ahead.
Unidentified Participant
Yeah, hi sir, thank you for the opportunity. I just wanted to know sir, if this growth for the current quarter was due to pre buying before the price hike or was there actual improvement in demand? There is an actual improvement in demand. If you look at our growth, even in Q2, we have grown by 5 to 6%. In fact, the price increase has happened only yesterday. The announcement has been made only yesterday. So Q3 there was no talk about any price increase. It is only in Q4 yesterday that the price hike has been announced. So there would be some traction in Q4 on account of this.
But Q3 is purely on account of the improvement in the demand and the initiatives which has been taken by the company. How much was the price hike which we took and how much was the increase in raw material cost that has come? The brass prices have fluctuated widely over the last. You can say the entire year increase fee it had risen by something like 12% in January. Again it has gone up significantly. If you look at the entire purchase of the nine months of the financial year from March, April to December, you’ll find that the average price was something like 640 for brass per kg, which has gone up to something like 800 in January over the last few days.
So it’s a sharp increase which has happened particularly in January. And also there was a 12% rise in the month of. Sorry, in the quarter of Q3.
operator
Thank you. We take the next question from the line of Arun Bair from ICICI Securities. Please go ahead.
Arun Nair
Hi sir, just a few point data points. You mentioned that obviously cost was higher in Q3. Can you share that number? Also the spend done on Fertan and Polyplus in the last nine months and particularly in Q3. At the same time, what you announced is about 11% plus price increase in case of faucet wear and 4% plus in case of sanitary wear. Is that sufficient to cover whatever increase has happened? I’ll just take your questions one by one. First you asked was in respect of the publicity spend, how much it has happened in absolute numbers in the current quarter.
In current quarter the publicity spend was 17.27 crores as opposed to 13.87 crores in the corresponding quarter of the previous year. So there’s an increase of something like 3 and a half crores to 4 crores in publicity spend. Second question was in respect of if you can repeat the question again. So the spend, we have the AD.
Arun Nair
Spend again for nine months. If you give that would be helpful. And sanitary and Polyplus cost incurred in the first nine months.
Arun Nair
And.
Arun Nair
And also in Q3.
Arun Nair
In Q3 we spent something like 6 crores in Polyclass and Senator. This was including for salaries which was in the region of 3.6 crores and promotional traveling and other expenses in relation to Senator and Polypus which accounted for the rest. The publicity spent for the entire year for nine months has been something like 35.58 crores for the entire nine months of the current fiscal year versus how much last year?
Arun Nair
Nine months.
Arun Nair
Nine months. Last year was 40.89 crores.
Arun Nair
And so one more question which I had with regards this was that Polyplus there are no sales, right? We haven’t booked anything sales wise.
Deepak Chaudhary
No. In Q3 the total sales up to the end of nine months the total sales was in the region of 7 to 8 crores for Senator and Polypus shipping to and we had earlier projected something like 40 crores for the full year. But we’d like to revise that we should be ending by more like 20 crores for the current year because the stores have been taken some time to get ready. So we expect to do something like more like 20 crores and not 40, 45 crores which were projected earlier in respect of these two brands.
Deepak Chaudhary
And so you did not mention the numbers spent on Sanita and Polypas for nine months. You mentioned for this quarter six crores.
Deepak Chaudhary
Six crores was for this quarter. For the whole year it would be in the region of. Because the most spending has started coming in Q3 only the other promotional spending etc. Before that the team building spends were there. So for the full year it would be in the region of you can say 8 to 9 crores.
Arun Nair
And you had projected 150 crores from this both these brands next year that’s in place, right?
Deepak Chaudhary
That should be in the region now because we are projecting something like you can say 8 to 9 crores in the current quarter also. So next year we should be able to do once the scale up is complete more in the region of I can say 100 to 120 crores.
Deepak Chaudhary
So largely once this Q4 will be ended. So we are, we will be preparing our detailed budget exercise taking into consideration market feedback and all. So we will come out with the numbers as part of the the next year achievements to be achievements. But for both these newly launched.
Arun Nair
And so regarding my question about that price increase which you have taken, is that sufficient to cover whatever cost increase you have seen till date?
Deepak Chaudhary
Yeah, the price increase would be sufficient to cover the kind of increases which have happened till date. Obviously if it keeps on increasing at the current trend, then again we’ll have to revisit the position. But as of now the kind of increases which have happened price increase be able to adequately cover it.
Deepak Chaudhary
One more feedback we have from dealers is you were the last guys to announce the price hike. You know the leader in faucet were had taken a price hike somewhere in January.
Arun Nair
Any reason why we are dealing it.
Arun Nair
Till 1st of March? That’s the date you’re going to delay.
Deepak Chaudhary
Right? See it’s a matter of what how we perceive the price rise and how our total cost dynamics are working. You find that the market leader had not taken a price rise since quite some time. Whereas we had in September 24th taken a substantial price increase in faucet ware. So that price increase was kind of helping us to maintain our margins. Also the fact that our operational capability in faucet wear has improved significantly. And even with the cost increase in the brass because of other operational parameters, the overall cost we were able to manage quite well and the margins were being maintained.
That is where the need for that price increase in between did not arise. But we cannot expect everything to be like a total aligned movement in case of prices from the all the players. So it is totally based on the kind of margin pressures which are being put within the company. And that also based on that that we have taken in September 24th and we’re taking it right now.
Arun Nair
So after this price increase, if I get it right in FY27, you will go back to assuming there are no more cost increases. You’ll go back to your margin rate of 15, 16% which used to look at earlier. Is that correct?
Deepak Chaudhary
Correct.
Deepak Chaudhary
And I would request you to please.
Deepak Chaudhary
Join back the queue for follow up questions.
Arun Nair
Thank you.
operator
Thank you. We take the next question from the line of Nikhil Gandhi from Bajaj Life Insurance. Please go ahead.
Nikhil Gandhi
Yeah, this is Sujith from AJ Life. Thank you for the opportunity. I just wanted to check with you. In the previous cycle during COVID years when the prices rose in sanitary wear and faucet wear, did you benefit? Players like you who are large, do they benefit typically in cycles like that in terms of market share gain from the smaller players?
Deepak Chaudhary
Sorry, your question is not clear. If you can repeat it again.
Nikhil Gandhi
Okay, so do you benefit in a rising prices scenario? When raw material prices rise, the industry takes a price hike. Large players like you in faucet ware and sanitary ware, do they benefit? In the previous cycle when this happened in Covid, did you gain market share?
Mayank Vaswani
You’ll find that whenever there is an input cost rise that is something which is affecting the Industry as a whole. And you’ll find that sooner or later that will be leading to a price increase by not only the larger players, but also by the smaller players also. So on an overall basis, a price cost increase led price increase is not something which is going to affect the market share of individual players. You find that on an over a period of time, once everybody takes a price increase, that market share stabilizes. It is not that on a rising cost scenario, larger players are able to take in higher price increases and are able to garner higher market shares.
Okay.
Nikhil Gandhi
Secondly, in the, in the con call today, you already explained that for projects you had to give higher discounts, right?
Mayank Vaswani
Correct.
Nikhil Gandhi
So can we say that currently the demand remains muted?
Deepak Chaudhary
The demand has started going up. If you see that we have grown by 6% and 11.2% over the last few quarters. The total share of projects within the business has remained constant at the same 38, 39% which has been not only there in Q2 and Q3, but also there in, you can say previous year Q2, Q3 and Q4, as well as current year Q1. We have been towards that number for quite some time now. Typically our project share used to be 30%, but that was something like two and a half to three years back. And we are steadily risen from you can say mid of 20, 22, 23 to a number of 35% and now to 37 38% which is holding steady.
So it is not that in this particular quarter by itself, the project numbers have gone up. The numbers have been going over the period of time because of the fact that retail had been kind of sluggish. Now with the retail also picking up, you’ll find that this number would either remain constant or will start going down going forward.
Deepak Chaudhary
So just to get this right, in periods when the overall demand is sluggish because retail is still the higher portion goes to 60 to 63%. Correct. In those periods, what is your game plan to basically till the time the demand remains muted, to kind of accelerate sales growth when you don’t have tailwind from the industry.
Nikhil Gandhi
Whenever there is an outside pressure? The what we typically try to do is that we try to improve our operations, look inwards, try to improve operations, try to improve our product line. That is what we have been doing over the last couple of years when the demand had been muted. We have introduced a slew of products. We have introduced brands where we felt that there was a market growth and we were not present and we have undertaken lot of operational efficiencies. To improve and maintain margins in spite of the kind of external pressures which are there.
So the idea is that periods when the retail is not doing well or the external pressures are there, try to be prudent inward. Try to do more of operational efficiencies and product kind of expansion.
Nikhil Gandhi
So one last question is then, do you actually get higher sales growth because of the product interventions and product introductions?
Deepak Chaudhary
Now we are anticipating that we are well positioned because we have introduced a slew of products in the last couple of years. The market has already started showing signs of improvement. Both project had been doing quite decent in the recent past and retail also started showing green shoots. So we now anticipate that going forward we should be able to maintain this momentum of double digit growth in Q4 as well as in the coming financial year.
operator
Thank you Ladies and gentlemen, we request you to restrict to two questions per participant. We take the next question from the line of Bhavan Rupani from Investech. Please go ahead.
Bhavin Rupani
Hi sir. Thanks for the opportunity. Sir, my first question is related to price hike. Sorry if I missed that. What is the price hike that we have taken yesterday?
Deepak Chaudhary
The kind of indication that they’ve given to the market is on an average it will be 4% for sanitary wear and 11% for faucet wear.
Bhavin Rupani
Got it sir, couple of data points. What is our outsourcing proportion for sanitary wear and faucet wear?
Deepak Chaudhary
I’ll just give you the number for Q3. In sanitary where the outsourcing was 61% and in faucet where the outsourcing was 47%.
Bhavin Rupani
Perfect. And one last question on Capex faucet where we are running at almost 102%.
Deepak Chaudhary
Any CapEx plans for your like? We had already taken the brownfield expansion where we had gone up from 3 lakh to 4 lakhs and we had undertaken civil facilities which have been completed to take it from 4 lakhs to 6 lakhs. So whenever we feel that the demand is sustained and that we’ll be able to keep on having a kind of sustained production requirement, we can go from 4 lakhs to 6 lakhs within a span of. You can say three to four months because only balancing equipment needs to be done otherwise the plant is ready.
operator
Thank you. We take the next question from the line of Mithun Ashwath from Kiva Advisors. Please go ahead.
Mithun Aswath
There was a plan to put up new sanitary facility. Can you speak little louder? Hi, there was a. There was a plan to put up a new sari facility. I think the land was Purchased for the sea. Just wanted to know what is the status of that. You’re right. The land is already purchased, but we have not commenced the construction activity for the plant that we are going to take a view at the end of Q4 depending upon the market situation at that point of time. Because whether we need to start construction immediately or defer it even further, that definitely doesn’t sound good as a prognosis, right? Wait for the market to grow and then you will put up the plant.
Or you don’t want to put up the plant ahead of demand actually picking up?
Deepak Chaudhary
No, it is a total kind of scenario relation to the demand and the production capabilities. What has happened within the last couple of years? As I keep on mentioning earlier also that the facilities within the plant itself has undergone a lot of change. The kind of efficiency that we were able to achieve earlier, we are able to do much better than that. So we have been able to, without putting up a new greenfield project, create a plant within a plant, a new plant within the plant.
Because our manufacturing capabilities and the production output that we are able to achieve within the plant has gone up significantly. Also what has happened during this last, you can say couple of years is that the mix has changed. Earlier the idea was that most of the complex pieces used to be produced within the plant and the simpler ones, the low value added products used to be purchased from outside. Now with the kind of muted demand which was there in the last couple of years, this shift has also happened in the production which is being done currently in the plant.
So few of the outsourced items which have been taken in in house. And once we find that the demand is improving, we can take again these products to the outsourced partners, increase the capacity within the plant, take the plant to full manufacturing capability. So we have a lot of scope in the next couple of years to be able to manage from the current plant by itself. So it’s not a function of you trying to follow the demand. It is a function of being able to understand the exact production capability with the VD demand.
operator
Thank you. We take the next question from the line of Archana Gode from IDBI Capital. Please go ahead.
Archana Gude
Hi sir, thank you for the opportunity. Please talk about EBITDA margin getting back to 15, 16% going forward. Can you help us understand what kind of nets is growth you have been seeing in there?
Deepak Chaudhary
Essentially as I mentioned, this was a one off kind of a quarter wherein a large amount of phasing impact has happened which has led to a reduction in the EBITDA margins. So typically we have been maintaining margins in the region of 13 to 14% which even otherwise is the norm. And we expect to be back to those margins margin levels in Q4 itself. And that should be. That is something which is sustainable across going forward. And coming back to that from 13, 14 to that range of you can say 15 to 17%. Because we have already started growing and we started seeing the top line increasing.
You’ll find that as this number sustained and the top line continues to grow and these one off kind of things are not there. So you find that those margins of 16, 17% should be looking very likely in the second half of next financial year. But we should be back to that 13, 14% level in Q4 itself.
Archana Gude
Sure sir. So also if you can talk about the micro markets, you know you spoke that there is some green shoots maybe you know, going forward. So any particular market would like to talk about where we’re seeing that the the demand is barring the project sales.
Vikas Kothari
I think as I mentioned in earlier questions also that the company has been taking a lot of initiatives in respect of the product profile and also the kind of market where it is not too strong. So we have been looking at in the last, you can say 6, 4 quarter, 3, 4, 5 quarters as to which markets we are not really doing well and have been concentrating a lot on those markets. And it is these markets which have now started showing results wherein earlier if you see the total distribution profile of Sera, most of the sales used to come in from south wherein Kerala used to lead.
Now the trend has been reversed. You’ll find that the UP is the leading in the entire zones. And the zone of Bihar Jharthan which used to be extremely poor has also started showing a reversal. So it is these kind of small, small initiatives which have started leading to kind of improvement in the overall kind of sales. And going forward you find that the initiatives which we had taken earlier will sustain the kind of growth that we have been able to achieve in the last two quarters.
Archana Gude
Sure sir. So that was helpful. Thank you so much and all the best for coming.
Vikas Kothari
Thank you.
operator
Thank you ladies and gentlemen. Due to time constraint we take that as the last question and we conclude the question and answer session. I now hand the conference over to the management for their closing comments.
Deepak Chaudhary
Thank you everyone for attending this call and for showing interest in sera Sanitary Ware Ltd. 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 call. Join the call.
operator
Thank you on behalf of Sarah Sanitary Ware limited. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.