ACRYSIL Limited FV Rs 2 ( INE482D01024) : A value pick at CMP Rs 58-62 1 year target price Rs100

Acrysil Limited was incorporated in 1987 and is primarily engaged in the manufacture of Granite based kitchen sinks or ‘Composite Quartz Sinks”.

The company started operations with a technical collaboration with “Schock & Co.” A German company and established world leader in decorative moldings. Acrysil is th e only company in all of Asia and among a few companies worldwide, manufacturing quartz kitchen sinks to global standards of quality, durability and visual appeal. It has 2 plants having combined capacity of 5.0Lakhs quartz sinks annually. The company has also diversified into the manufacture of stainless steel sinks with annual capacity of 75000 annually and also boasts a complete range of Kitchen appliances such as microwave ovens, built in ovens, chimneys, cook-tops, wine cellars etc. The company has entered the market in the United Kingdom through it’s step-down subsidiary Home Style Products Limited. Acrysil also entered into an agreement for Supply of Quartz Kitchen Sinks with Leading German Brand “Grohe last year.

All the products are sold under the brand name “Carysil” and is available in more than 1500 outlets and is a preferred choice of builders and modular kitchen studios. Company currently has over 700 employees and a strong network of distributors globally. Currently the brand is exported to over 50 countries around the world with plans to expand even further.

Company achieved consolidated revenue of approx 254 cr  in FY18-19 & expected  to achieve Rs 280crs in year 19-20.



Financials 

Key positive factors

1.       A  growing premium brand “Carysil “  .

2.       High ROE >15

3.       Current mkt cap 164 crores against expected  turnover of Rs 280 crores

4.       Consistent dividend paying company : Last year dividend 60% on face value of Rs 2

5.       High Demand of Modular Kitchen & Consumer Preference towards adding Aesthetic Value to the Kitchen is key growth driver.

6.       1500 Dealers, 82 Distributors, 80 Galleries, 65 Franchise Shops: a strong presence in India.

7.       Key Alliances with partners in USA, Israel, Denmark, Germany

8.       Diversifying into other products, Kitchen appliances, taps and accessories for complete kitchen solutions.

Risk Factors:

1.             Extended locked down in Europe and USA due to COVID could affect the EXPORTS & financials of the company in future since export constitutes approx 70%

2.             Higher interest burden of approx 10 crores         

             



Investment Rational:

1.       Very cheap valuation available at PE multiple of 7

2.       Market cap before the correction was approx 280 crores against current market cap of 167cr.

3.       Company is targeting to achieve revenue of 300 crs in short term and 1000 crs over long term .

4.       Strong 17% CAGR  experienced  in last 5 years.

5.       Stock has potential to touch  Rs100 once the market recovers.