CARYSIL - Carysil

📊 NSE: CARYSIL 🏢 Ceramics - Tiles / Sanitaryware 📅 Last Updated: 12/13/2025 20:43

💰 Financial Performance

Revenue Growth by Segment

As of H1 FY26, Quartz Sinks contributed 49.2% of revenue (up from 46.3% in H1 FY25), Steel Sinks contributed 14.6% (up from 11.9%), Kitchen Appliances & Others contributed 9.9% (down from 11.0%), and Surfaces contributed 26.3% (down from 30.8%). Overall revenue for Q2 FY26 grew 16.2% YoY to INR 240.7 Cr.

Geographic Revenue Split

In Q2 FY26, the revenue split was: USA 34.3%, UK 19.1%, India 19.8%, Europe 14.4%, and Rest of World (ROW) 8.3%. This reflects a shift from Q2 FY25 where USA was 43.4% and Europe was 8.3%, showing increased penetration in European markets despite regional demand pressures.

Profitability Margins

Operating margins (OPBDIT/OI) were 19.1% in FY24 and 19.33% in H1 FY24. Net profit margins (PAT/OI) moderated from 13.49% in FY22 to 8.5% in FY24 due to the weaker cost structures of newly acquired subsidiaries and higher interest costs from debt-funded acquisitions.

EBITDA Margin

EBITDA margin stood at 19.1% in FY24. For Q2 FY26, the company reported an EBITDA of INR 4.3 Cr for its USA subsidiary alone, a significant turnaround from a loss of INR 10 lakhs in Q2 FY25, indicating improved operational efficiency in overseas markets.

Capital Expenditure

The company has planned a total upcoming capex of INR 36 Cr, including INR 25 Cr for a new kitchen appliances line (50,000 units p.a.), INR 5 Cr for quartz sink expansion by Dec 2025, and INR 6 Cr for land acquisition in Bhavnagar for stainless steel sink expansion.

Credit Rating & Borrowing

Carysil maintains an [ICRA]A (Stable) rating. Borrowing costs are reflected in an interest coverage ratio of 6.37 times in H1 FY24, down from 9.59 times in FY22, following increased debt for acquisitions. The company raised INR 125 Cr via QIP in July 2024 to reduce short-term debt.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Methyl Methacrylate (MMA) Resins and natural Quartz/Granite. Resins are a critical cost driver, and their price volatility directly impacts the operating margin, which the company attempts to mitigate through price hikes.

Import Sources

While specific countries are not listed, the company utilizes a 'natural hedge' through imports to mitigate foreign exchange risks, suggesting significant international sourcing for resins and specialized components.

Capacity Expansion

Current Quartz Sink utilization is 88% and Stainless Steel is 95%. Expansion plans include increasing kitchen appliance capacity by 50,000 units to reach a total of 150,000 units per annum by Q1 FY27.

Raw Material Costs

Raw material costs are a major component of the cost structure; operating margins moderated to 18.08% in FY23 from 21.6% in FY22 partly due to input cost fluctuations and the integration of lower-margin acquired entities.

Manufacturing Efficiency

Manufacturing efficiency is high, with Quartz Sink utilization at 88% and Stainless Steel at 95% in Q2 FY26. India-based manufacturing provides a cost-efficiency moat compared to international competitors.

Logistics & Distribution

Export sales contribute approximately 80% of standalone revenue. Logistics are currently impacted by the Red Sea crisis, which affects the efficiency of the distribution network to key markets like the US (35% of exports) and Europe.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth is driven by a 'Global Trusted Brand' strategy involving inorganic acquisitions (Sylmar, United Granite, Tap Factory), capacity expansion in appliances (to 1.5 lakh units), and increasing domestic market penetration for composite quartz sinks.

Products & Services

Composite quartz kitchen sinks, stainless steel kitchen sinks, kitchen appliances (chimneys, cook-tops, wine-chillers), and bath products (wash basins, quartz tiles, hot water boiling taps).

Brand Portfolio

Carysil, Sternhagen (premium bath), Sylmar, The Tap Factory, United Granite.

New Products/Services

New integrated glass processing plant and kitchen appliances assembly line expected to contribute to revenue starting Q1 FY27.

Market Expansion

Expansion into the GCC market (Saudi Arabia, Kuwait, UAE, Qatar, Bahrain, Oman) via Carysil FZ-LLC Dubai and deepening penetration in the US market through United Granite LLC.

Market Share & Ranking

Carysil is the leading manufacturer of granite-based kitchen sinks in India and a significant global player in the composite quartz segment.

Strategic Alliances

The company has partnerships with global kitchen brands for contract manufacturing, leveraging its status as a 'Forbes Asia 200 Best Under A Billion' company.

🌍 External Factors

Industry Trends

There is a global shift toward composite quartz sinks over traditional stainless steel. The industry is growing as quartz sinks penetrate the domestic Indian market, and Carysil is positioned to capture this via its established manufacturing base.

Competitive Landscape

Faces stiff competition from established European players, though Carysil's lower manufacturing costs in India provide a significant pricing advantage.

Competitive Moat

The moat consists of cost-leadership (India-based production vs high-energy-cost European competitors) and brand equity (Sternhagen). This is sustainable due to the high entry barriers in quartz sink manufacturing technology.

Macro Economic Sensitivity

Highly sensitive to global housing markets and interest rates; high inflation in Europe and the US previously led to a 21% YoY decline in exports in Q2 FY23.

Consumer Behavior

Increasing consumer preference for premium, designer kitchen solutions and 'modern hot water boiling taps' (via The Tap Factory acquisition).

Geopolitical Risks

The Red Sea crisis is a primary geopolitical risk affecting shipping routes to Europe and the US, potentially increasing lead times and freight costs.

⚖️ Regulatory & Governance

Industry Regulations

Adheres to ISO 9000:2001 manufacturing standards. Operations are subject to international trade regulations and import/export duties in 50+ countries.

Environmental Compliance

Compliant with Gujarat Pollution Control Board norms; utilizes PNG and solar power to meet ESG standards and reduce carbon footprint.

Legal Contingencies

The company reports no pending show cause or legal notices regarding environmental norms. A special window for re-lodgement of physical share transfers was opened in Nov 2025 per SEBI guidelines.

⚠️ Risk Analysis

Key Uncertainties

Volatility in resin prices and sustained demand weakness in the US/UK markets could impact profitability by 2-3%.

Geographic Concentration Risk

High concentration in the US (34.3%) and UK (19.1%), making the company vulnerable to economic downturns in these specific regions.

Third Party Dependencies

Dependency on resin suppliers is a key risk; however, specific supplier concentration percentages are not provided.

Technology Obsolescence Risk

Low risk due to the specialized nature of composite quartz molding, but the company is investing in new 'integrated glass processing' to stay ahead in appliances.