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We interacted with Mr. Anand Sharma- CFO of CARYSIL Ltd to understand the recent demand trends and business developments. Following are the Key Highlights from the same:

* Demand has started to improve with big box retailers rationalizing their inventory. Though demand from new homes is under pressure due to inflationary scenario in overseas markets, replacement demand has been the key driver. In developed nations viz. USA, UK Quartz sinks constitutes ~15-20% of total kitchen sinks.

*  Globally 4-companies manufacture Quartz sinks via “German Technology”, out of which 2 of them sell in their own brand and other 2 are into white-labelling. CARYSIL’s current cost of production is ~30-40% cheaper as compared to other 3-manufacturers, this is enabling company to on-board new customers & expand their market share.

* The 200,000 Quartz sink expansion that company deferred in FY23, will be reconsidered by end of FY24 depending on the demand scenario. However, management is confident that the said capacity will be ready in 3-4months from zero date.

* Carysil Ltd is having a strong pipe-line of new customers, wherein company is in advance talks & could finalize the contracts in coming quarters.

* In domestic markets, awareness for Quartz sinks is very nascent. There are other companies selling Quartz sinks, however the dealer/market feedback about their quality are discouraging. Quality issues such as color fading, early chipping & development of cracks have been regular complaints. Management foresees, higher competition in domestic market will create better awareness about the product & due to better quality and brand-recall, Carysil should benefit from the same.

* Carysil Ltd is focusing on expanding their presence in domestic markets, company has increased its dealer network from ~1,500 to ~3,200 & opened ~85 galleries as display centers. Management stated that budgeted spends for Sales & distribution will be ~10% of domestic sales.

* Stainless steel sink’s expanded capacity of 90,000sinks is now operational. ~30% of stainless steel sinks is exported & the same is likely to expand to 50% with onboarding of new customers & adding new geographies.

* For stainless steel sink, Carysil Ltd is focused on Quadro & PVD sinks which forms ~50% of this biz. The price range of these products are ~20% & 40% higher as compared to base products.

* In appliance biz, Chimneys & Hobs constitute ~60% of this division’s sale which is currently on outsourced model. However, with investment of ~Rs100 Mn each in phase I & II wherein 1 lakh units in each phase will be added. Company plans to manufacture these products in-house which will enable them to have better control over quality & give them the flexibility to introduce new designs & hightech products. In year-1 company aims to reach Rs600-700Mn turnover & by year2 the same should grow to Rs1Bn+. Carysil Ltd has entered into technical collaboration to introduce new age products in the segment. 

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