Cera Sanitaryware, Kajaria, Somany hit 52-week lows on sluggish demand

Shares of Somany Ceramics, Kajaria Ceramics and Cera Sanitaryware have underperformed the market by falling over 20 per cent thus far in 2025, as against a 3.6 per cent decline in BSE Sensex.

Shares of ceramics companies Cera Sanitaryware, Kajaria Ceramics and Somany Ceramics hit their respective 52-week lows on sluggish demand environment. The management of these companies anticipate closing the financial year 2024 -25 (FY25) with lower single-digit growth only.

 

Thus far in the calendar year 2025, Somany Ceramics (down 33 per cent), Kajaria Ceramics (down 26 per cent) and Cera Sanitaryware (down 22 per cent) have underperformed the market by falling over 20 per cent. In comparison, the BSE Sensex was down 3.6 per cent during the period.

 

In the October to December quarter (Q3FY25), the aggregate net profit of these 3 companies declined 24 per cent year-on-year (YoY) at Rs 133.64 crore. These companies posted profit of Rs 176.09 crore in Q3FY24. EBITDA margins remained soft for the quarter due to lower realizations.

 

 

Sluggish demand and weakness in domestic market weighed on volume off-take and dampened the growth. While these companies initially witnessed early signs of demand improvement, market conditions remained challenging as persistent headwinds continued to suppress growth. As a result, demand did not pick up as expected previously.

 

While demand in the Sanitaryware segment has remained subdued in recent months, the management of Cera Sanitaryware is confident that the growth trajectory will regain momentum as the overall market environment improves. The B2C segment has been sluggish but with evolving consumer preferences, urbanization trends, and the gradual recovery in real estate combined with regular cycles of renovation and upgradation, the company expects demand to pick up over time.

 

The Union Budget announced on February 1, 2025, introduced several positive measures aimed at boosting consumer sentiment and discretionary spending. The reduction in income taxes rates are expected to enhance disposable income, thereby increasing homebuyers' affinity to spend and hence stimulating demand in the building materials industry.

 

Additionally, the allocation of Rs 15,000 crore under the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund to complete stalled housing projects is anticipated to accelerate the completion of over 1 lakh housing units, further supporting the real estate sector. These initiatives are expected to positively impact market demand for sanitaryware products.

 

Although the current market demand for tiles remains subdued due to sluggish exports and subdued retail demand, analysts at Elara Capital expect it to improve in the medium to long term.

 

Contrary to the expectations of the management the industry remains impacted by sluggish demand and weakness in domestic markets. This has led to the industry size remained same and not grown significantly, said analysts at IDBI Capital.

 

Kajaria remains optimistic on the industry growth as the management believes the recent Budget to work in their favor. Further, increase in retail sales pick up will help improve the mix and lead to higher realizations. The brokerage firm anticipates EBITDA margin improvement in near term as sanitaryware business losses come down.