excellent results
7 Likes
Both Standalone and consolidated results are good.
But Consolidated results are better than Standalone.
If we can get subsidiary wise information of revenue and profit, We can estimate what is driving growth.
Results are good. With 20% additional capacity coming by around March 21 growth can continue given that company has also closed a deal with ikea
3 Likes
*Acrysil concall KTA *
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Key milestone – strategic partnership with IKEA for global requirements. High quality quartz sink to be supplied by the end of this calendar year. Will be supplied for European, Russian and Eastern market. Large demand expected to come from IKEA. -
Capacity expansion by 100,000 sinks to 600,000 sinks. Will commission Q4FY21. Expansion happened in record time. Normal time takes to expand 100,000 sink is 6-9 months but this time, its being expanded within 4 months. This incremental capacity will cater to domestic as well as export market -
H2FY21 expected to be better than H1FY21 -
Demand for home products improving as people spending more being they staying at home more during covid-19 times -
Company is focused to build brand and distribution channel for domestic market. Have presence across 55 countries in global market -
Demand spike up witnessing in domestic market -
US Subsidiary – focusing more on European market. Setting up US subsidiary is to have more focus with US clients -
Company has enough land bank available to reach 800,000-900,000 quartz sinks capacity from 600,000 sink presently. -
H1FY21 Volume for quartz sink – 178,179 sinks – 90.99 crores against 90.62 crore last H1 -
Steel sinks – 26126 sinks. 8.38 crore, volumes down by 24% and value fell by 18% -
Appliances – 5963 units – 5.05 crore – 40% down by volumes and 44% down by value -
Others – 4594 units – 91 lakh -
No delay or postponement of orders in Europe due to second lockdown -
US quartz market has been growing at 15-20% CAGR and has strong opportunities for Acrysil to grow in US going ahead
6 Likes
Thanks Tarun for sharing your notes. Its very clear that company’s quartz sink business is doing very well and pipeline is strong for short term. For long term as well being an IKEA supplier gives strong hopes.
However, I am always surprised at the rate of diversification at Acrysil for better or worse. Whole range of new products in bathroom and kitchen appliances segment have not done well from quite a while now and yet they are talking about introducing a new range of products for them!! I have always wondered why they are so shy at expanding their growing quartz business while going to all other segments without hesitation. In recent history they have consecutively increased quartz sink capacity by 20%. Now they are expanding at 20% again in fire fighting mode to meet the demand. Why not increase capacity significantly in one go and focus on selling more of what’s already selling well?
8 Likes
Have done a detailed analysis on Acrysil Ltd. Might be of some help to the Valuepickr community.
28 Likes
Results declared. Pretty good numbers as expected. PAT of 12 cr vs 7 cr yoy.
5 Likes
Q3 numbers are superb especially on the margin side.Management had guided for ~20% kind of steady state margins but they have done much better.Last quarter I wondered why company is only undertaking a 20% capacity addition since demand was very strong.Now they have announced that they will be expanding capacities by another 100k units.This will take the total quartz sink capacity to 700k units,an addition of 40%.Given that management had said that the new capacity will be more cost efficient right from the start there is a fair chance that 20%+ margins will sustain going ahead.The most heartening aspect of course is that volume growth seems to have structurally improved towards 20%
10 Likes
Was going through the latest annual report FY20 and found that the remuneration of Chairman/MD is 1.66 cr, against PAT of 22 cr for FY20. This translates to ~7.5% of PAT.
As per companies act, the ceiling limit for any promoter or whole time director is 5% of PAT. Can someone clarify this in its reply, whether or not this is the case or I am misunderstanding something.
I also see, that the MD is consistent in taken loans from the company. I wonder if anyone knows what is/are the reason(s) for these loans? There is no footnote for the same.
2 Likes
Great job Aman, came across it via google search on Acrysil few days back and found it extremely helpful. Very good analysis
1 Like
My understanding is through PVD they will be coating the earlier/exiting steel sinks.
But they mentioned about Manufacturing and coating of ~50,000 sinks. My under standing is out of 90,000 these 50,000 will be coated.Let me know if i am wrong here .
Does anyone has idea about margin expansion through these designer sinks.
1 Like
Firstly, the remuneration can exceed the ceiling by a special resolution to be duly passed by shareholders. You can see AR of 2019, there is a resolution passed in AGM for mr chirag Parekh for 2cr annnual remuneration.
Secondly, the loans are given by chirag Parekh to company and not taken. Promoters do chip in with their personal money in form of unsecured loans to the company in case of liquidity requirements.
1 Like
Thank you Praveen for clairification
1- You are correct, the resolution was passed for 2 Cr. salary and same has been verified in AR19. However, why does the AR20 mention that the salary is within the ceiling limits. Is it a normal practice?
2 - Could you let me know how you know you interpreted loan taken ‘to/for’ part ?
Thanks !
Raj
I think,as per company act total renumeration threshold is 10% of PAT
The companies act says that 10% is aplicable when there are more than one MD or whole-time directors, and in such case, 10% of PAT is the total remuneration while the remuneration to any one MD/whole-time director is capped at 5% of PAT. In case of Acrysil, there is only one MD/whole-time director (Mr. Chirag Parekh) . This is my understanding of the companies act sect. 197
1 Like
Super analysis. Contract manufacturing is becoming the go to theme right from pharma , chemicals, food , electronics to now sinks
2 Likes
Capacity expansion of 100,000 units at Bhavnagar plant in Gujarat has been completed. Commercial production of additional 100,000 units has commenced from , 25" February, 2021.
Manufacturing capacity of Quartz Kitchen Sinks has increased to 600,000 units per annum.
Disc Invested
4 Likes