Cera Sanitaryware Limited (NSE: CERA), a leading player in India’s home solutions sector, announced its financial results for the third quarter ended December 31, 2025 (Q3 FY26). While the company demonstrated resilient top-line growth driven by its faucetware division, profitability faced significant pressure from rising input costs and one-time exceptional provisions.
Financial Highlights: Q3 FY2026 versus Q3 FY2025
Cera reported a divergence between its sales volume and net earnings, reflecting a challenging quarter for margins.
| Metric | Q3 FY2026 Actual | Q3 FY2025 (YoY) | Variance (%) |
| Revenue from Operations | ₹499 Crores | ₹449 Crores | +11.1% |
| EBITDA (Excl. Other Income) | ₹51 Crores | ₹59 Crores | -14.0% |
| EBITDA Margin | 10.2% | 13.2% | -300 bps |
| Net Profit (PAT) | ₹24 Crores | ₹46 Crores | -48.4% |
| Diluted EPS | ₹18.35 | ₹35.56 | -48.4% |
Segment Performance: Faucetware Takes the Lead
The company’s diverse portfolio helped mitigate sluggishness in specific retail segments.
Faucetware Excellence: This segment was the star performer, recording a robust 18.2% YoY growth, supported by healthy replacement demand and high capacity utilization, which reached 102% during the quarter.
Sanitaryware Stability: The core sanitaryware segment saw a more moderate growth of 6.4%, with capacity utilization standing at 82%.
Revenue Mix: Sanitaryware and faucetware remained the primary drivers, contributing 48% and 40% to total revenue, respectively. The project-led (B2B) business accounted for 38% of the topline.
Profitability Under Pressure: The “Brass” Burden
The sharp 300-basis-point contraction in EBITDA margins was attributed to a combination of external cost pressures and strategic internal spending.
Input Costs: Management highlighted a 12% rise in brass prices during the quarter, which significantly impacted the faucetware manufacturing cost structure.
Branding and Discounts: To gain market share in a competitive environment, Cera increased trade discounts and ramped up publicity spending for its premium Senator and Polyplus brands.
Exceptional Items: The bottom line was further impacted by a one-time provision of ₹18.46 crore related to the implementation of the New Labour Codes, specifically for revised gratuity and leave encashment liabilities.
Strategic Divestments and Portfolio Sharpening
In a move to focus on its core manufacturing strengths, Cera completed the divestment of its 51% stake in two subsidiary LLPs; Packcart Packaging and Race Polymer Arts in late 2025. Consequently, the company has transitioned to reporting standalone financial results.
Con Call Highlights: The Road to Recovery
During the post-earnings conference call on February 5, 2026, the management team, led by Chairman Mr. Vikram Somany, outlined a strategy for margin normalization.
Price Revisions: Cera plans to implement calibrated price hikes across both sanitaryware and faucetware in the coming months to pass on rising material costs.
Margin Guidance: The company expects margins to recover to 13-14% in Q4 FY26, aiming for a return to the historical 15-17% range by the second half of FY27.
Network Expansion: The premium Senator brand now has 32 operational flagship stores. Management is shifting toward a “calibrated expansion” to ensure each store reaches optimal performance before scaling further.
Growth Outlook: Despite near-term volatility, the company remains optimistic, projecting a full-year revenue growth of 7-8%.
Investor Outlook
Investors reacted cautiously to the earnings miss, with the stock sliding roughly 3% post-announcement. While the revenue trajectory remains positive, the market’s focus is firmly on how quickly Cera can restore its margins amidst high commodity volatility and the structural cost shifts brought about by the new labor laws.