Carysil (earlier Acrysil) - Kitchen sinks

Stock Opportunities Untested - but worth a good look
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Business update with IKEA

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Hey there, could you please tell me what software you have used to create these notes?

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What will be the impact of ESOP?

2,25,000 Stock Options to the eligible employees under ‘Acrysil Limited - Employee Stock Option Plan
2021’ at an exercise price of Rs.60/- (Rupees Sixty Only) per share. The said options are convertible into
equivalent number of equity shares of Rs.2/- each of the Company, upon exercise.

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No effect, total outstanding shares are 2.7 Cr, the ESOP figure is <1% of this. Negligible dilution of EPS and almost zero effect on market dynamics.

Disc: not invested

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Is the company into Granite sinks or Quartz (a more premium product)? ICRA credit rating report uses the word ‘granite’ throughout but the company presentation only talks about ‘quartz’. Can someone please clarify.

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They started with Quartz sinks, they are diversifying into other kitchen applications as you can see in company’s website Company - (carysil.com)

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They are the only one in India to make coloured sinks which increases aesthetics in a kitchen.

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It’s made of quartz not granite.

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Are you going by the company claims or you have counterchecked it independently? My question is because ICRA only refers to granite in their report, please see this: https://www.icra.in/Rationale/ShowRationaleReport/?Id=97735
The company is using ‘quartz’ as a brand name but the product is actually granite. That is what is appears from the above report.

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I am in construction business with engineering background and we uses the products in all our projects because it’s the best compared any other sink , be it best of stainless Steel.

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Acrysil reported strong numbers yesterday. There was some initial confusion on EBITDA margins but that seems sorted now. Some highlights from the call:

→ Demand continues to be very strong. Company is operating near 100% capacity utilisation.

→ Seeing long queues outside retail stores in US,lot of demand for home improvement products. Company was able to forge a tie-up with a very large US retailer. Demand in European countries is also strong.

→ New capacity of 100k came on stream in March. Next 100k units to get commissioned by end June,early July. Medium term target of 500 cr. sales,confident of achieving it in less than 3 years.Will be able to sustain ~22% kind of EBITDA.

→ There was no adverse impact of cyclone at company units. Covid situation in Bhavnagar has improved dramatically in recent days and worker attendances are rising. There could be some impact on Q1 numbers but don’t foresee any permanent damage on revenues.

→ IKEA is very happy with the quality of Acrysil’s products. Mgt expects IKEA to scale up well but can’t share any concrete numbers for now.

→ Freight costs surged 40% in Q4 affecting ‘other expenses’. Company has been able to pass on these rising costs and margins will normalize from Q1.

→ Since demand is very strong,looking at large expansion in the next round. The funding mix will be internal accruals and debt. Still on the drawing board about this.

Mr. Parikh seemed upbeat on company prospects.

Disc.: Invested. Views are biased.

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Some scruttlebutt

=I had talk with company employee.As per him,company is working at full capacity and started exports to IKEA

=I had talk with 2-3 architects and all had said carysil is no 1 brand in india for quartz sinks

=My friend had supplied some material for their recent expansion of plant .As per him company has done good amount of expansion in recent past.

Disc…invested

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With prices of steel sinks increasing every year, the gap in their prices will reduce and sooner or later Quartz sinks should be the go to option.

Personal opinion

Disc : tracking position.

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More than the price , it’s about quality of quartz sinks. It’s many notches above. End user experience is also good as noise level of utensils while sink is being used is far less due to inherent nature of the product. It has sound damper underneath

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yup i agree, however those who know the product knows the benefits. Some customers leave it there only on price, which itself may not be an issue in years to come.

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thanks for sharing but except the 2nd point all of this is public information.

IKEA supplies started towards the end of March.Company is expanding quartz sink capacities by 40%,100k units is already onstream the other 100k will be onstream by June-July.

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Thanks for your insights. However my question remains unanswered.

I have checked the Annual Report and the previous concall transcripts as well. It seems company is using the word ‘quartz’ for what is actually granite. That is why ICRA uses the word ‘granite’ and not ‘quartz’.

Another thing - Acrysil Annual Report says their main product is NIC Code 22209 but 22209 pertains to “Other Plastic Products”. Is it a typo?

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I will dig more if I find time.

Disc: No positions)

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My answer was based on actual experience. It can’t be granite. Sinks are one single moulded piece out of quartz . Granite can’t be moulded or carved out of single piece. Granite can best be cut and pasted.

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I think the best way to get it clarified would be if you can drop a mail to the investor relations itself.

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“Quartz” can be a very confusing name indeed, the material is made out of crushed Granite (80%), mixed with resins (20%), and baked to make various shapes. See Pokarna thread for a quartz slabs manufacturer (who was only doing Granite slabs earlier). Pokarna owner himself jokes that when he first heard the term ‘Quartz’ (while in Italy for clothes biz dealings) he thought of citizen watches, instead of construction material. :joy:

PS: Pokarna has just started making quartz sinks also, yet to see any being sold from their new plant just started approx 2 months ago

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