Cera Sanitaryware Jumps The Most In A Month As Analysts Upgrade The Stock After Strong Q3

Shares of Cera Sanitaryware Ltd. rose over 5%, the biggest intraday gain in over a month, to Rs 4,720 apiece as analyst raised target after the company reported sequential growth in net income and revenue for the December-quarter, during market hours on Monday.

  • Share price rose above 200-day simple moving average, indicating potential upward price momentum.
  • Over the last two sessions, the scrip has risen 5%. Of the 16 analysts tracking the company, 11 maintained ‘buy’, four maintained ‘hold’ and one maintained ‘sell’ recommendations.
  • Analyst updates in the past three days include two upgrades.
  • The overall consensus price of analysts tracked by Bloomberg implied an upside of 21.4%.
  • Trading volume on the stock was above five time the 30-day average volume at this time of the day.

Analyst expect the company to be a major beneficiary due to an improving housing market due to its significant presence in sanitaryware and faucetware.

They also highlight that the consistent price hikes taken by the company has supported margin growth. Analysts say that the recent correction in the stock price makes the valuation attractive and prompted the upgrade.

ICICI Securities

  • Upgrades stock to ‘buy’ from ‘add’ with the target price unchanged at Rs 5,545; an implied return of 23.4%.
  • Better product mix aided rise in operating margins.
  • Continues to like the company due to its significant presence in sanitaryware and faucetware, demand for which will increase due to an improving housing market.
  • Company’s operating performance has been better than expected.
  • Strong brand, distribution reach, comprehensive product portfolio are key growth drivers.
  • Company is expected to be a significant beneficiary of the uptick in housing demand.

IDBI Capital Market Services

  • Upgrades stock to ‘buy’ from ‘hold’ with the target price reduced to Rs 5,447 from Rs 5,483; an implied return of 21.22%
  • Strong demand traction and consistent price hike taken aided net sales growth and margin growth.
  • Company is poised to benefit from healthy industry demand and better product mix.
  • Recent correction in stock price makes the valuation look attractive, prompting the upgrade to ‘buy’.

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