IGI Logo

Demand improving but near?term headwinds to weigh on performance!

Result Synopsis

Carysil Ltd continues to face headwinds owing to on?going global slowdown. Revenues stood at Rs1.38Bn (in?line with estimates), reporting a growth of 7.6%YoY & remained flattish QoQ. Quartz Sinks (53% of biz), reported a revenue decline of 6%QoQ wherein volumes degrew by 18% while ASP improved sharply by 14% over similar period. Stainless Steel sinks (13% of biz), registered a volume decline of 28%QoQ while ASP grew by 49% which resulted into a revenue growth of 7%QoQ. EBITDA margins came in at 18.2% (Vs our est of 15%) as compared to 21.8%/16.1% in Q3FY22/Q2FY23 respectively. The solid surface biz (24% of biz), revenue increased by 8%QoQ. Carysil Products (UK Biz) revenue GBP2.1Mn, a substantial growth of 24%QoQ wherein Quartz division’s (44% of biz) revenue grew from Rs530Mn in Q2FY23 to Rs104Mn in Q3FY23. Product mix for Carysil Products for Q3FY23 was 44.3%/34.1%/21.5% from Quartz/StainlessSteel/Others respectively. Domestic?Export mix for the quarter came in 22%?78% as compared to 29%?71% respectively in Q2FY23. 

We believe on?going slowdown in overseas markets (78% of biz) is likely to weigh on company’s performance in near?term, hence we reckon Quartz sinks biz will witness a revenue growth of 4% over FY22?FY24E. Stainless Steel sinks & other biz are expected to report better growth owing to growing presence in domestic markets and new appliance capacity will contribute meaningfully to revenue from next fiscal. However, with lower utilization & higher cost, we expect margins to remain under pressure. Therefore, we reckon margins to come in at 15.9% in FY24E Vs 18.7% in FY23E. Given the multiple headwinds insight, we have revalued the company at P/E(x) of 22x on FY24E EPS of Rs29.8 & though we maintain our BUY rating on the stock, we have revised our target price downwards to Rs656.

Result Highlights

Consolidated

Revenue stood at Rs1.38Bn (est Rs1.32Bn), reporting a 8%YoY growth and declined marginally QoQ.   ? GP% came in at 49.1% as compared to 57.7%/49.3% in Q3FY22/Q2FY23 respectively. EBITDA margins came in at 18.2% (est 15%) as compared to 21.8%/16.1% in Q3FY22/Q2FY23 respectively. Absolute EBITDA stood at Rs250Mn, a degrowth of 11%YoY but increased by 12%QoQ. ? Net profit stood at Rs121Mn, a sharp degrowth of 30%YoY while increased by 29%QoQ

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632

Above views are of the author and not of the website kindly read disclaimer