Completely agree here. My limited point here is that even in the recessionary environment that is being expected, IKEA seems to be comfortable with the demand for quarzt sinks.
Also, it would really help if the management gives out clearly the kind of volumes they are doing with IKEA.
Their partnership with IKEA has evolved and management shared in confcall as well
Management expected more and more business from IKEA and this notification comes
So this notification is on the lines of walk the talk
Expecting more positive news this year for company with capex coming online
and on domestic sales improvement as well
Itâs not necessary that Ikea in general is bullish on Quartz sinks. They might be just maintaining their inventory but shifting sourcing from one player to another (low cost moat for Acrysil) and reducing cost.
Itâs good for Acrysil indeed. The volumes though are still quite low and I donât read much into it beyond this.
Acrysil commenced production of additional 160,000 units of Quartz sink at Bhavnagar plant.
Total manufacturing capacity of Quartz sinks have increased from 840,000 units to 1,000,000 units per year.
Discl: Exited, holding only tracking quantity
I have some anti-thesis for Acrysil which are stopping me from investing in it
Premium products, with high prices, should have high gross margins (Low margin + Low turnover)
Future core business (Quartz sinks) growth depends on the foreign markets and majorly on big brands like GROHE and IKEA - which make topline concentrated
A huge unorganized market in the same business. Many different types of Quartz sinks is available in the market. Acrysil has the technology and quality advantage but many times quality doesnât matter if one can get a normal brand sink of Quartz in 3k while Acrysil sinks are available at 5k-6k
They still donât have a builder network in India which can lead to bulk orders of quartz or steel sinks
They are highly focused on their new brand, which has not contributed till now on their topline
Learnt something new about commercial Sinks special requirement in the US so thought to share it.
So in commercial spaces - US businesses are required to comply with ADA (American Disability Act) rules to ensure that disabled people can access sink space easily while remaining in their chair. The depth of these ADA sinks are lower to accommodate for this ADA requirement.
Below are some scuttlebutt findings:
Price for ADA sinks are higher than similar size (but higher depth) residential sinks. This applies to both SS and Quartz composite sinks. In some cases ADA sinks are twice the amount of non-ADA sinks.
A lot of sizes/options are available in non-ADA sinks (both SS and Quartz) but not for ADA sinks.
A lot of brands donât offer ADA compliant Quartz sinks. They just offer regular size sinks for residential applications. Like Ikea doesnât offer ADA sinks at least in the US.
There are plethora of players for SS ADA sinks.
Key question is - how big of market is out there for commercial sinks in the US? There are about 30mn businesses in the US. And there are roughly 130mn homes in the US. So it would be safe to assume that commercial application sink market would be 20% of residential sink market.
Given residential sinks commands such a big portion of overall pie for sink market, most players would be fully focused on residential sinks. It would be good to confirm with the management if they are participating in the commercial application market.
To change the name of the Company to âCARYSIL LIMITEDâ or âCARYSIL TECHNIK LIMITEDâ or âCARYSIL
PRODUCTS LIMITEDâ or any other name as may approved by the Central Registration Centre (CRC)., subject
to all other applicable approvals.
They sell products with name Carysil and not Acrysil
Acrysil --Few good things happening at domestic front in Q1FY23 which may negate export oriented headwinds
Domestic business has increased by 117% YoY to Rs. 38 crores for Q1 FY23 contributing 22.2% of the revenue. Company has witnessed substantial demand in domestic market and going ahead, expect momentum to continue in domestic market
Company Increased dealer network in domestic market from 1,500 to 1,880 dealers during Q1 FY23 and plans to increase by ~3,000 by end of FY23
Companyâs order to IKEA for supply of Quartz kitchen sinks has been doubled.
Production and supplies of additional order started in July 2022
#ACRYSIL
Grew 
:- 73% YoY & 22% QoQ even in a rising inflation environment.
Reason - Good growthđź in domestic markets. (They went ahead and collaborated with Vaani Kapoor to add in domestic markets too)
IKEA partnership has further strengthened as they doubled the supply showing that Acrysil is able to meet scheduled delivery + Quality standards.
Tickford Orange acquisition has strengthened Acrysil presence in UK for new channels for selling kitchen sinks.
Export 72% Domestic 28% (this mix has also changed over time from only export to domestic as well)
Quartz Sink 61% Solid surface worktops 19% Steel Sink 10% Appliances 9% ( over the years they have added solid surface worktops which sits well with capturing the kitchen market)
Healthy margins can sustain owing to stabilization of freight costs and softening of inputs costs which gives validation on future margins here.
Decent capex plans which shows growth triggers are present in almost all segments they work on.
The investor presentation has a very interesting graph about their product distribution and it shows 19% Solid surface worktops. There is no mention about this new product anywhere else. Solid surface worktops is a complementary product to sinks and if they can bundle both together it would definitely increase sales. Keen to know more on this from the company.
There has been a information regarding this in the past the graph in ppt is comparing thing from 2012 too.
I donât think Acrysil will sell under Carysil brand. I think at least initially (for few yrs) it would be more of contract manufacturing for them. It takes time to establish as brand & get dedicated space in Menards/Lowes etc.
Hi All,
Thank you for all the great insights on this thread.
If anyone can help with understanding a few aspects of the business that would be great.
Is there any information on the margin realization for quartz and stainless steel sinks? Quartz sinks sound like a form of Value add product and I am expecting around 25-30 pc margin. However, with average realization of a quartz sink around 5000-700 I am not sure if my assumiption is accurate. Any information around this is much appreciated.
With the commissioning of major capex plans which will take capacity upto 8.4L quartz and 1.4L steel sinks, revenue is surely going to hit 700 odd crores by FY 23. With net margins around 13-15 pc, net profit could hit 80-90 crores,increasing eps by 30 pc,taking P/E down to 18.
With further growth triggers down the line and a stable growth outlook management goals seem realistic. Is there any possibility of margins improving in the near future if the management makes the decision to follow growth by increasing quartz sink contrinution to overall revenue. Is there any possibility of that scenario playing out? Or are the management going to maintain a conservative mix between the two products?
Thank you for your inputs in advance. Hope to learn from you all.
I am looking for anti thesis pointers for Acrysil. Off late, the stock price is underperforming, would like to understand any anti-thesis pointer playing out. Fundamentally, it has all ratios like ROE,ROCE, D/E etc. looking good - Any international factors playing out?
Possible issue is Real Estate in US and Acrysil supplies a lot to US.
Markets looks like have already priced in the UK / US slow down.
Any positive suprise in term of maintaining growth guidance / growth trajectory may move the stock in positive direction.
Management is competent. So judging a company by 1-2 quarters may not be wise .
Unless you are swing trader.
Disc - personal view only not a recommendation
Disc - Invested
I live in UK, there is no slow in the home construction business, real estate and rental price are picking-up after covid, i see apartment and home renovation constructions are happening. Not sure of US though
