Technology

Cera Sanitaryware Ltd. (CSL) is the third largest sanitary ware company in the
organized sector with about 22% market share in India. The company is engaged
into manufacturing sanitary ware and faucet ware (commenced since September
2010) products. The company also markets wellness products, which are majorly
outsourced. Owing to the changing lifestyle of people, increasing awareness for
improving sanitation coverage, expenditure on sanitary ware has been
consistently increasing as a percentage of total construction expenditure, thereby
providing significant traction for the sanitary ware sector. CSL is trading at an
attractive PE of 7.6x and EV/Sales of 0.9x on FY2013E. We recommend Buy on
CSL with a target price of Rs289, based on target PE of 10x and implied EV/Sales
of 1.1x for FY2013E.

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