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Equity Research Report - Acrysil Limited
Leader in Lifestyle Kitchen Products
Company Overview:
· Acrysil is engaged in manufacturing and trading of Quartz kitchen Sinks, Stainless Steel Kitchen Sinks, Bath Products, tiles, kitchen Appliances and Accessories.
· Acrysil is the only “Composite Quartz Sink” manufacturer with the German Technology that is patented by Schock; only four other companies in the world have the license to use this technology.
· Acrysil has a total quartz sink capacity of 5L units. The company also has a Stainless Steel sinks capacity of 90,000 per annum. The global capacity of “composite quartz sink” is around 50-55L; which gives a global market share of 9-10% to Acrysil.
· The company has enough land bank to reach 8-9L sinks in the existing land.
Key Statistics:
Market Cap: Rs. 1815 Cr.
Current Price: Rs. 677.8/-
52W High: Rs. 927.9/-
Stock P/E : 25.9
Book Value: Rs. 100.4/-
Dividend Yield: 0.35%
P/B: 6.8
Face Value: Rs. 2/-
52W Low: Rs. 471/-
Source: www.sharescart.com
Returns (%):
| Particular | 3Months | 6Months | 12Months |
| Acrysil | 68.00% | 239.00% | 346.00% |
| Sensex | 3.43% | 9.64% | 21.70% |
Source: www.bseindia.com
Shareholding Pattern (%):
Source: www.sharescart.com
Product wise revenue (%):
Source: Company's Earning Presentation
Peer Comparison:
| # | Company | CMP | M Cap | 52W High | 52W Low | PE | PB | ROCE Last Yr | ROE Last Yr | PAT TTM | Div Yield |
| 1 | Hindustan Unilever Ltd. | 2528.2 | 594012 | 2859.3 | 1901.8 | 64.8 | 12.1 | 24.8 | 18.4 | 9178 | 1.7 |
| 2 | Dabur India Ltd. | 546.4 | 96809 | 659 | 482.2 | 55.5 | 11.7 | 26.8 | 22.1 | 1747 | 1 |
| 3 | Godrej Consumer Products Ltd. | 890.2 | 90502 | 1112 | 660.2 | 53.1 | 7.9 | 18.7 | 17 | 1714 | 0 |
| 4 | Procter & Gamble Hygiene | 14375.2 | 46663 | 16466.4 | 12801 | 81 | 68.2 | 93.6 | 71.6 | 576 | 2.4 |
| 5 | Colgate-Palmolive (India) Ltd. | 1563.2 | 42268 | 1740 | 1375.6 | 40.3 | 24.5 | 97.6 | 74.4 | 1055 | 2.6 |
| 6 | Emami Ltd. | 485.7 | 21427 | 600 | 393.6 | 25.8 | 10.3 | 33.7 | 44.3 | 849 | 1.8 |
| 7 | Gillette India Ltd. | 5421.4 | 17666 | 6070 | 4750 | 61.1 | 22.7 | 51.1 | 36.9 | 289 | 2.1 |
| 8 | Sheela Foam Ltd. | 3038.6 | 14795 | 4054 | 2226 | 63.2 | 10.6 | 20.1 | 17 | 236 | 0 |
| 9 | Galaxy Surfactants Ltd. | 3163.6 | 11589 | 3495 | 2585 | 39.2 | 7.1 | 19.5 | 18.3 | 286 | 0.6 |
Source: www.sharescart.com
Industry Structure and Development:
Factors paving way for the Industry:
➢ Rising Consumer Aspirations.
➢ Increase in spending on home improvement products.
➢ Home improvement trends during the coronavirus outbreak in the United States in 2020.
➢ Surge in e-commerce post pandemic.
➢ Rise in disposable income.
➢ Continued urbanization.
➢ Growth in Real estate industry.
➢ Internet of Things (IoT).
Ø The global market for kitchen sinks was valued at USD 3.1 billion in 2020 and estimated to witness a CAGR of 4% over 2021-2030.
Source: Company's Earning Presentation
Q1-23 Highlights : Sustained Momentum in Business
2. Company increased dealer network in domestic market from 1,500 to 1,880 dealers during Q1FY23 and plans to increase by 3000 by end of FY23.
3. Company’s order to IKEA for supply of Quartz kitchen sinks has been doubled. Production and supplies of additional order started in July 2022.
4. Capacity expansion of 1,60,000 units of Quartz kitchen sinks completed in July 2022. The manufacturing capacity now stands at 10, 00,000 units p.a. commercial production commenced from 28th July 2022. Further, board has approved 3 MW solar plant to be set up in bhav nagar, Gujarat for captive use. This is in addition to existing 0.44 MW Solar power plant.
5. Our export order book continues to be at normal levels with sustained uptick in demand for our products. However, exports sales witness some moderation in Q2 FY23 owing to macro challenges and revenge travel trends in exports markets. On a full year basis, company will continue to witness healthy growth in overall business.
6. Exports business has increased by 25% YoY to Rs. 100 crores for Q1 FY23 contributing to 72% of the revenue. Company has strengthened its presence in newer geographics of Australia, New Zealand, Singapore, Vietnam, Gulf countries and other South East Asia countries.
7. The company is doubling production capacity of stainless steel sink from 90,000 units p.a. from 1,80,000 p.a. units with proposed Capex of Rs.11 crores. Commercial production expected to commence by end of September 2022.
8. Currently catering to 55+ countries strives to spread the wings to 70 countries in next three years by exploring the un-catered geographics.
Source: Company's Earning Presentation
Financial Snapshot:
Balance Sheet (Rs. in Crores):
| Mar-18 | Mar-19 | Mar-20 | Mar-21 | Mar-22 | |
| Shareholder's Funds | 118 | 135 | 158 | 191 | 254 |
| Minority's Interest | 1 | 2 | 2 | 3 | 3 |
| Total current Liabilities | 119 | 135 | 140 | 166 | 243 |
| Borrowings | 19 | 17 | 21 | 22 | 39 |
| Other Liabilities & Provisions | 3 | 3 | 3 | 9 | 15 |
| Total Liabilities | 260 | 291 | 325 | 391 | 553 |
| Fixed Assets | 111 | 119 | 125 | 152 | 206 |
| Total Current Assets | 142 | 164 | 186 | 221 | 308 |
| Non Other Current Assets | 6 | 7 | 14 | 18 | 39 |
| Total Assets | 260 | 291 | 325 | 391 | 553 |
Profit and Loss Account ( Rs.in Crores):
| Mar-18 | Mar-19 | Mar-20 | Mar-21 | Mar-22 | |
| Net Sales | 196 | 252 | 276 | 310 | 484 |
| Other Income | 5 | 2 | 5 | 8 | 10 |
| Total Income | 201 | 254 | 281 | 318 | 494 |
| Total Expenditure | 169 | 209 | 229 | 243 | 379 |
| Operating Profit | 32 | 45 | 52 | 75 | 115 |
| Interest | 8 | 12 | 10 | 8 | 11 |
| Depreciation | 7 | 9 | 12 | 13 | 18 |
| Exceptional Income/Expenses | 0 | 0 | 0 | 0 | 0 |
| Profit Before Tax | 17 | 24 | 30 | 54 | 86 |
| Provision for Tax | 5 | 7 | 8 | 15 | 21 |
| Profit After Tax | 12 | 17 | 23 | 39 | 65 |
| Adjustments | 0 | 0 | -1 | 0 | 0 |
| Profit After Adjustments | 12 | 17 | 22 | 39 | 65 |
| Adjusted Earnings Per Share | 4.6 | 6.6 | 8.3 | 14.7 | 24.3 |
Cash Flow Statement (Rs. in Crores):
| Mar-18 | Mar-19 | Mar-20 | Mar-21 | Mar-22 | |
| Opening Cash & Cash Equivalents | 22 | 3 | 5 | 6 | 8 |
| Cash Flow from Operating Activities | 16 | 24 | 30 | 45 | 52 |
| Cash Flow from Investing Activities | -20 | -17 | -19 | -35 | -73 |
| Cash Flow from Financing Activities | 0 | -4 | -10 | -9 | 18 |
| Net Cash Inflow / Outflow | -5 | 2 | 1 | 2 | -2 |
| Closing Cash & Cash Equivalent | 17 | 5 | 6 | 8 | 5 |
Source: www.sharescart.com
VALUATIONS:
On the basis of Discount Cash Flow Valuation Method, we
are recommending ‘Buy’ for the stock. Since the stock
offers good opportunity, we initiate a ‘BUY’ signal on the
stock with 12-month price target of Rs 750/- share an
upside of 11.00 % from current levels.
I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.
I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.
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