Cera Sanitaryware’s record is clean on its face: seven years of unqualified audit opinions, no debt, and cash on the books. Three things deserve attention. A decade-long pattern of excise disputes has escalated, a new income-tax demand landed in March 2026, and operating cash flow has covered only 65% of cumulative EBITDA over ten years while the company funded a buyback from reserves.
Key findings
- Two equity investments turned into full write-offs totalling ₹13.80 crore in impairments
Minor- Cera acquired a 26% stake in Milo Tile LLP for ₹8.06 crore in FY2019. After Milo could not maintain product quality, the company provided impairments of ₹5 crore in FY23, ₹1.56 crore in FY24, and ₹1.5 crore in FY25, fully writing off the stake, and paid an additional ₹1.6 crore to settle trade payables in March 2025. An impairment of ₹5.74 crore on Anjani Tiles Ltd was recognised in FY22 upon classification as held for sale, with the divestment consideration of ₹28.69 crore received by 31 March 2023. - Statutory auditor rotated on schedule after a five-year term with no resignations or adverse actions
Clean- N.M. Nagri & Co. completed a five-year term and was replaced by Singhi & Co. effective from the 24th AGM in FY23, with shareholder approval of 99.99% votes in favour. Singhi & Co. was appointed for a five-year term from the conclusion of the 24th AGM until the conclusion of the 29th AGM. CARO clause (xviii) for FY25 confirms no resignation of statutory auditors during the year.
What to watch
- Income-tax demand appeal. Outcome of the appeal against the ₹27.96 crore demand for AY 2024-25, filed after the order dated 26 March 2026.
- Receivables quality. Monitor FY27 results for further movement in trade receivables and debtor turnover days following the extended credit policy and new brand rollouts.
Bottom line: This is a disclosed and audited record with a fortress balance sheet, no debt, and a simplified corporate structure. The risk sits in three places: the escalating excise and tax disputes, the persistent gap between reported profit and cash generation that funded a buyback from reserves, and the rising receivables book as the company extends credit to push new brands. Watch the tax appeals and the receivables line together, they will show whether the cash conversion gap narrows or widens.