Carysil (earlier Acrysil) - Kitchen sinks

Stock Opportunities Untested - but worth a good look
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The price is down to Rs.790 from 52 week high of 1150 current PE IS 39. The fundamentals of the company are good, average sales & profit growth for last 5 years 25%, with ROE of 20%. The products of the company have good demand, management is also decent and after recent QIP net debt to equity also looks reasonable.

Can anybody share his views on 30% fall in price from 52 week high price of 1150.

In recent QIP the company has issued 1575000 shares @ Rs. 794 i.e. 5.4% equity. Can these QIP shares be the reason for sell off.

Is it the right time to buy ?

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Saurabh Mukherjee from Marcellus has bought stock and is pitching it to the whole world.That is reason enough to worry. But jokes apart…last three years there is no growth in profits.

I used to own this stock. The promoter had spun such great stories of growth and capacity expansion. However no profit growth for the last 3 years is a bitter pill to swallow.

QIP at Rs 794 has also contributed to stock fall. It has been a terrible performer in the last 3 years when most stocks have doubled.

Moral of the story: A great story has to be backed up by delivery of numbers. If not fundamentals ultimately catch up.

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If Fed interest rate cut in Sep 2024, can trigger a up side for short term. The new purchases of the company is yet to give fruit full result. This can be a good bet linking to the housing market of EUROPE, and US+ Premium segment in India. If housing market improves, CARYSIL is nicely placed to get the reward

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Thanks Satish,
According to reports there are 85% chances of rate cut in September
Debt burden is due to expansion of capacity & acquisitions, I too feel in next three
years there are chances that company can grow exponentially.

I think in over heated market Carysil looks reasonably priced.

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debt to equity is .85.How is it resonable.any thought on this ?

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The company has recently done the capex. As the company earns and repayment their borrowings. So debt to equity came down

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In the last week company has raised Rs.125 Cr. by QIP at 794 per share. I believe It will bring down the D/E to reasonable level.

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They had some acquisitions plans to meet 1000 Cr revenue target, QIP funds might be used for acquisition purpose only

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Thanks Murli, you are right but equity infusion would bring down the D/E ratio.

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Seems like 1000 cr topline by Fy25 is already baked in the price. Can anyone share what’s the guidance beyond FY25. They should reach near 1000 cr this year more or less.

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Very good result, revenue & EPS up (yoy) for the quarter 40% & 36% respectively.

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Chances of reaching 1000 Cr this year will not be possible, they may end up ~900 Cr as per the con call

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To know relative valuation, whom should we compare carysil with? Are Tiles / senitaryware right comparision or anything else? Thanks.

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No listed peer. Maybe Pokarna since both the cos are dependent on the US housing market and deal.in quartz products. But Pokarna has different products.

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Current valuations of Price/Sales~ 3 would be OK valuations for growth rate of 20-25%.
As they said in con call i am expecting some big order wins and onboarding of new customers for quartz sinks. Capacity utilizations would be around ~80% by FY25 end.

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Indeed concall, disclosure and QIP gives some hope for good future. Thanks @anjeshv4 Pokarna, Kajaria (which has bath products), have subdued revenue growth rate of 10% for 5-10 yrs vs carysil 20%. Though not banana to banana comparision. While their PE is 50+ for senitaryware vs 37 of carysil which seems fairly valued.

Disc: Added post results and views are biased.

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Carysil Ltd -

Q1 concall and results highlights -

Revenues - 201 vs 141 cr, up 41 pc

EBITDA - 37 vs 27 cr, up 37 pc ( slight dip in EBITDA margins due ongoing Red Sea issues and costs related to integration of their US subsidiary - United Granite )

PAT - 16 vs 12 cr, up 33 pc

Quartz Sinks capacity utilisation stood at 70 pc

The contract with Reece Australia and Howdens UK are progressing well ( these should bump up company’s revenues going fwd )

Exploring new Mkts like - Turkey, Croatia, Vietnam for Quartz sinks business

Volumes sold in Q1 -

Quartz Sinks @ 1.55 lakh vs FY24’s Qtly avg of 1.41 lakh

Steel Sinks @ 0.37 lakh vs FY 24’s Qtly avg of 0.31 lakh

Kitchen appliances @ 0.14 lakh vs FY24’s Qtly avg of 0.137 lakh

Export : Domestic sales breakup @ 82:18 vs 80:20 in last FY

Product wise sales break up -

Quartz sinks - 45 vs 52 pc
Steel sinks - 11 vs 13 pc
Solid surfaces - 32 vs 25 pc
Appliances - 11 vs 11 pc

Revenues from overseas subsidiaries -

Carysil Products UK - 31 cr ( selling steel and Quartz sinks )
Carysil Surfaces UK - 42 cr ( selling solid kitchen surfaces )
United Granite US - 21 cr ( selling solid kitchen surfaces )

Recently concluded a QIP of 125 cr. This amount shall be utilised for acquiring new moulds for Quartz sinks, expanding appliance and faucets manufacturing capacity and for brand building in local mkts

Company expects their Qtly revenues to improve going into Q2,Q3,Q4 ( vs the 200 cr clocked in Q1 ) - subject to no major geo-political disruptions

In Q1, domestic sales have grown by 16 pc YoY

If the Red Sea issue doesn’t worsen further, company’s margins should see an upward trajectory going forward

Management believes that Quartz Sinks business has a long growth runway ahead ( globally ) and the company is extremely well positioned to benefit from the same

This year, the company is expected to do 150 cr of sales from India. Aim to do 300 cr / yr of sales from India Mkt within next 4 yrs

Disc: hold a small tracking position, biased, not SEBI registered, not a buy / sell recommendation

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Carysil UK
Carysil UK1200×602 119 KB

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I expect the fed rate cuts to be a huge positive to Carysil’s business in USA and Europe over next 3 years. They have already done reasonably well in this recent 2 year headwind period. Plus already has a huge cost advantage being an India based manufacturer.

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Carysil is yet to break its all time high volume in Quartz sinks

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