Few important points from concall may 2022
1…Acquisition
=.Coming to our recent acquisition,
I am pleased to inform that Acrysil UK Limited our wholly owned subsidiary of Acrysil Limited has acquired 100% shares of Tickford Orange Limited, UK holding company of its operating subsidiary Sylmar Technology Limited on April 1, 2022. Sylmar is a manufacturer, distributor, and customizer of high quality solid surface products for kitchen and bathrooms.
=Being a leading player in UK solid surface market, this shall augur well for Acrysil to strengthen its presence and market share in UK and opening up new sales channels and
cross selling opportunities for the company. Acrysil UK acquired 100% equity shares of a
total consideration of 11 million pounds. The acquisition funded through mix of debt and internal accruals
Q=2021 the profit of Tickford Orange was 1.8 million pound
that is around 19 Crores to 20 Crores, the acquisition cost that 11 million pounds, so we have got is at a very less rate, that seem a bit cheap enough so this is distress sales or this is a normal process?
Chirag Parekh: Yes, it is a normal sales, it is just the promoter to realize the value of the company, so there
was no distress, but we are lucky enough to get discounted because it is already our client and we had a great comfort level, so that is why we are able to do it.
2…Acrysil Ceramictech Limited.
=.Let me update you on our incorporation of wholly owned subsidiary of Acrysil Ceramictech
Limited. The wholly owned subsidiary incorporated on April 12, 2022 with the objective of manufacturing and selling of Hi-Tech Ceramic kitchen sinks and bath products. Globally, it
has a market share about 10% a very few players are manufacturing it. Being a specialized
category like the quartz kitchen sink, we will use our expertise to manufacture this product
and elaborate our sales channel for ceramic kitchen sinks and bath products.
Q…can you please put colour on Acrysil Ceramic Limited like
in the terms of when the operations are likely to be commence or what is the size of market opportunity is there?
Chirag Parekh: Sure, like I had said that we are exploring the opportunity and to tie-up with large customers
of ours and is in the process, so once it is done I could expect it to have this within the next three months time and it is going to be a Greenfield project and this is going to be the HiTech. So, the whole manufacturing procedure ceramic is going to be for Hi-Tech ceramic sinks which only a few companies in the world have that technology and we have been able
to get access to this technology. This will be the first company in India to manufacture HiTech ceramic kitchen sink, so we are already in the process of negotiation with very large
customers across the world and once if we put up the manufacturing facility it will be on at least about 60% to 70% buyback arrangement and we will use this as a leverage for the products for bathroom.
3…Capacity expansion.
=.Coming to our capacity expansion. Our expansion plan of 160,000 Quartz Sinks is progressing as per schedule and expected to be completed in the current quarter. This will take the quartz manufacturing capacity from 840,000 sinks to 1 million sinks per annum.
The further expansion of 200,000 units of quartz kitchen sinks is expected to complete by
Q3 FY2023. Coming to our stainless steel sinks expansion, our company is doubling capacity of stainless steel, which is expected to finish by the Q1 from 90,000 units to 180,000 units per annum
4…Ikea and Grohe contract
.=Coming to our contract with Ikea we are supplying kitchen sinks for them for the global
requirement. The supply of Ikea in FY2023 expected to double twice of FY2022, this partnership is a testament of our commitment and global standards of our products. We
already got the award for the same. We expect our partnership with Ikea to further strengthen as we expect to supply them other kitchen and bath products moving forward.
=We also got a strong commitment from a leading bath manufacturer Grohe AG Germany,
they have strong commitment for the purchase of quartz and stainless kitchen sinks.
=As of now like I said we have been awarded to double our sales with Ikea and necessary investments have been done. We should start within the next two to three months, Grohe
also we have done investment in quartz and steel, that also takes momentum and third on
the Ikea on the kitchen sink front is that we are now exploring the possibility of adding the
new product lines along with this, the team is going to visit us soon and then we will see the outcome how it goes. But if it starts all the Greenfield projects will take about a year’s time
5…Moat
=As far as the quartz kitchen sinks are concerned I think we are definitely the lowest player in the world, approximately about 15% to 20% cheaper
6… Growth
=We expect that after all
the initiatives of our company is being done which we expect to be done by end of this current year we would like to continue our momentum of growth of 30% to 40% with our initiatives of ceramic kitchen sink, faucets and built in appliances
7…, Domestic
=On domestic we have witnessed a very strong growth and we
have never able to witness such a strong growth in the last few years and because of a collaboration with Vaani or our new range of appliances by able to supply more sinks to the
domestic market because now we have the capacity in place, we have witnessed a very
strong growth even quarter-on-quarter about 24%,
= A&P spend for us for the
domestic market I think it is about 2% of total sales.
=Company has been focused on increasing penetration in domestic market by increasing
marketing and promotion activities. Our recent collaboration with Vani Kapoor for our new Carysil marketing campaign #Th HeartofmyHome has been carried out successfully during
the year and it showcases a new range of built in appliances including built in coffee makers, which signifies a cutting edge innovation technology and design pioneered by Carysil.
8…Debt
Our current debt consolidated is Rs.136 Crores, with the new acquisition loan it will
increase by another Rs.53 Crores for this year, so another Rs.189 crores so it is of about Rs.200 Crores max.
=So, you can see our debt and EBITDA, our EBITDA is about 115 Crores, debt we had currently is 136, so it is a very comfortable position it is a 1.2 time of the EBITDA, coming
to the 2022-2023 when we are talking for 200 Crores benchmark, EBITDA we are expecting around 150 Crores, so we are keeping our debt in a very comfortable position,
debt equity is 0.53, in all the probability will not go beyond 7 max, so within that parameter
we are vigilant about the debt and we are keeping within the limits and as per our plan.
9…Large retailers-new customers
=we are in advanced talks with some large retailers
across the world, there are more and more opportunities for us, so as and when it goes through we shall let you know.
10…Appliance and bathroom products
=On the appliances side, I think we have touched the turnover of close to 20 Crores and I think five years back was I think less than 5 Crores
=Bathroom products we launched only five years back and bathroom is not a category which we are
focusing, this year now we have done collaboration with Susan Khan and Farah Khan so we
will see a sharp increase in bathrooms sales, but currently the bathroom sales for us is about
insignificant is about 1% of our total sales of the company
11…Receivables
on the export side, we were able to reduce the receivables with improvement with few
customer by 30% very important customers, the new customers also have a very short credit
line and as far as the domestic market we had earlier 90 days payment term cycle, now it has gone below 45 days so these are the two major improvements.
12…Equity fund raise
Q.=There was an enabling resolution taken a few quarters ago, that is for an equity fund raise, I just wanted the current thoughts on that?
Chirag Parekh: These are the new expansion plan, which we will for the ceramic, faucet and built in
appliances.
Disc…invested from lower level and may add on dip
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