I hold that stock close to a year and every time listened good commentary from management. Eventually excited with Q3 result as I was not able to see any reasonable growth.
@AmarP Hi, What is your defination of reasonable growth?
Total income for 9MFY25 grew by 24%.
Last 3 and 5 years growth is 30% and 22% respectively.
Current PE is 24.6.
Disc: Invested since long, added in last 2 days. Views are biased.
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Hi Deven,
for me the rate of EPS growth along with other opportunities available in the market at a better growth rate matters hence the sale & switch. It’s totally a personal preference.
Dec 21 EPS was 6.47 and Dec 2024 EPS is 4.40 INR.
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You are right, they are majorly B2B players, but even in B2B segment if they are maintaining 18% margins means they have some good power.
They are supplying to major brands and dealers.
They are trying to diversify some portion to B2C in coming days.
Management told that they can’t hit the 1000Cr mark in FY25, they may end up around ~820-830 Cr. Discussed about one big order from US brand, which can boost the sales by Q4 end & FY26 also. Margins will be back to 18% in Q4 as US subsidiary losses will decrease in Q4 & softening of freight charges.
Company can grow at 20% rate going forward, its available at < 25 PE of FY25 now (considering 25 EPS with 18% margins). I feel valuation’s are very attractive now and we can expect entry of institutions also at this price. I am not expecting any more correction going forward as its already fell > 50% from the ATH.
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Carysil Enters Agreement with KARRAN INC., USA for Quartz Sink Supply to Major U.S. Retail Chain
This what Management had said in the latest concall.
Sources: Latest intimation to SEBI & latest concall Transcript.
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What is the duration of this deal?
Update filed with the exchanges just seems to give the headlines without the fine lines
Its clearly mentioned that 150k sinks per annum ~85 Cr.
I think with addition of new SKU for IEKA & this deal they can hit 1000 Cr mark easily FY26
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Where do we see how much worth is ths 1.5 lakh sink
I saw one here at this furniture store. The Carysil sinks were set in a separate aisle surrounded by cooking ranges and microwaves. The sinks looked good. Nothing epic.
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FY24 revenue was 684cr. Of this 52% came from Quartz sink. So roughly, 356cr. And quartz volume for FY24 were 564,300 So, per sink revenue is 6,300. Assuming some discount on large order, price should be around 5800-6000 for Karran.
For 150,000 sinks it would result in 87cr based on 5800 per piece price
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Things are panning out very well, accumulated some shares around 500. Value left on the table is completed with the recent 30-40% move.
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Has anyone assessed the potential impact of recent reciprocal tariffs between the U.S. and India on Carysil’s profitability, especially given that quartz sinks are a major revenue driver? Could increased tariffs affect export volumes or margins?
As the company’s performance is closely tied to the U.S. market, where reciprocal tariffs could impact profitability
- Carysil plans to invest Rs 500 crore to expand its kitchen solutions manufacturing in India. The company aims to establish Bhavnagar as a major global kitchen sink manufacturing hub.
- Rs 100 crore will double sink manufacturing capacity from 1 million to 2 million units annually.
- Rs 50 crore will increase stainless steel sink production to 2.5 lakh units per year.
- Rs 30 crore will boost kitchen faucet production to 50,000 units annually.
- Rs 20 crore will support the manufacturing of 50,000 built-in kitchen appliances per year.
Source: https://www.dailyexcelsior.com/carysil-to-invest-rs-500-cr-to-hike-production-capacity/
Management clarified that they have invested 300 cr since 2020 and looking to invest 200 cr more in next few years
Source: https://www.bseindia.com/xml-data/corpfiling/AttachLive/321856ec-616a-4c50-824b-a89cdad2d807.pdf
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Carysil’s management, represented by Chirag Parekh, clarified in their concall that they haven’t heard of any imminent tariffs on quartz sinks exported to the U.S. at that time. While there is uncertainty surrounding the potential tariffs on stainless steel sinks, the company’s export volumes in this area are minimal, with only about 1% of sales being impacted by U.S. imports of stainless steel sinks.
On the quartz sink side, no tariff imposition has been mentioned, and management believes that, if such tariffs are imposed on metal products, it could even work in favor of their quartz sink exports due to rising demand.
Regarding the broader question of U.S.-India trade relations, it’s worth noting that discussions between the two countries are ongoing, and it’s not certain that President Trump will push for reciprocal tariffs on India, as these policies can change frequently. It’s difficult to predict, given Trump’s tendency to make unpredictable trade decisions—one day imposing tariffs, the next backing off.
Sources:
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| CFO / PAT = –6.9 / 64.3 = –11% | ||||||||||||
| CFO / EBITDA = –6.9 / 141.7 = –5% | ||||||||||||
| The company’s confidence in maintaining its 18-20% EBITDA margins | ||||||||||||
| but a combination of external tailwinds (easing input costs) and internal strategic initiatives (favorable product mix from new deals, operational efficiencies, subsidiary turnarounds, and indigenization) | ||||||||||||
| The company is targeting a 19% volume CAGR over FY25-27E for quartz sinks. | ||||||||||||
| Current faucet assembly is 30,000-35,000 units annually, with a target to reach 100,000 units by FY26-end | ||||||||||||
| For FY26, the company anticipates a 15% increase in revenues, targeting Rs. 925-930 crore | ||||||||||||
| Management also sees the potential to achieve a Rs. 1,000 crore annual run rate in Q3/Q4 FY26 |
| KEA’s global tender for non-US business, aiming to increase its market share from 25% to approximately 75%, effectively tripling its business with IKEA. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Negative ratios reflect that cash conversion from earnings was poor in FY25 due to inventory, receivables, and FDs. However, this is not due to a fall in profitability or structural inefficiency, but a temporary ramp-up phase. | |||||||||||||||
| Our working capital days increased primarily due to a strategic decision to increase the level of imported inventory and finished goods, owing to BIS standard implementation from March 2025… and to stock for the ramp-up of in-house appliance manufacturing.” | |||||||||||||||
| Detailed Plans for Capacity Expansions: The company is backing its growth aspirations with significant capital deployment. Approximately Rs. 50 crore is envisaged as CAPEX for FY26, covering expansion across sinks, fabrication, and built-in appliances. | |||||||||||||||
| Risks and Challenges | |||||||||||||||
| aw Material Price Volatility: Elevated prices of MMA, a primary raw material, significantly impacted FY25 EBITDA margins. Although prices have recently cooled down , raw material price fluctuations remain an inherent risk to profitability, | |||||||||||||||
| Export Freight Costs: High export freight expenses also contributed to the FY25 margin contraction. While these costs have recently cooled off , global logistics and shipping rates can be volatile | |||||||||||||||
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Concal Summary Q4 FY25
- Quartz sinks grew at a 12% CAGR and Steel sink grew at 20% CAGR. A current capacity utilization of 67% which is expected to rise.
- Secured a large order via Karran in the US to supply 1.5 lakh sinks in over 1800 stores
- Bidding for a global tender from IKEA which can increase their market share with IKEA from 25% to 75% in quartz sink. This is a non US tender. Final quality check and approval can happen within 60 days and they are building capacity for the same. Currently 10% of their revenue comes from IKEA.
- Stainless steel segment is running at 80% utilization and they are planning a 7-10 crores Capex operational in Q3 FY26.
- Targeting 1 lakh units by the end of the year for in house production of kitchen hoods and faucets compared to 35k now. Also setting up a new factory for built in appliances like ovens, hoods, and hobs with a capacity of 1 lakh units/year.
- Sales of 80% Appliances and 20% sinks in UAE, opening a second showroom and won a major contract with Emaar, UAE’s biggest developer.
- Very bullish on the domestic market, expanded their dealer network from 1500 to 4000, planning to increase the galleries from 140 to 200.
- Target to grow by 25-30% in India with a revenue of 170-180 crores this year while mid term target of 300 crores and long term 500 crores.
- EBIDTA margins impacted due to higher MMA price, increase in export freight cost, manpower hiring and marketing.
- Expect utilization to increase month on month to 85-90% in quartz sink by the next quarter.
- Margin guidance of 18-20% EBITDA and revenue guidance of 920-930 crores, 15% growth. They have a potential to achieve a 1000 crores as well.
- 10% tariff on all imports to US and chances of reciprocal tariffs don’t exists on sinks. 30% export went to US out of the 5.5 lakh quartz sinks exported.
- Older quartz sink plant with 2.5 lakh capacity which was shut down previously is being restarted.
- Lower realization this quarter was due to product mix sold - lower value product were sold more. From the coming quarter realization will increase as the new deals are for more premium segment.
- FY26 capex plans of 50 crores.
- Indian business is mostly B2C (80%) and here they are targeting the premium and mid-to-premium segment.
Disclaimer: Studying
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Whatever one might say the results posted by the company are fabulous on all accounts. First time in the History of the company that the qtrly revenues have crossed Rs 225 Cr - NP has crossed Rs 20 Cr ( its close to Rs 23 Cr) and the operating margins are back to 19 Percent. Just awaiting the Concall and the investor presentation to check the order backlog and commentary by the management. The only apprehension is that a major portion of the sales are in the US - the sword of tariffs is a dampner. Extract of Results is attached.
We might be seeing an annual NP of Rs 100 Cr this FY.
Carysil.pdf (846.5 KB)
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I think we should look at the remuneration of Mr. Chirag Parikh whose remuneration is more than 10% of net profit.
Also he is also the part of Audit and Nomination & Remuneration committee.
These are very serious corporate governance red flags.
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