Acrysil Ltd is a pioneer in composite quartz sink technology & is one of the largest producers of quartz kitchen sinks in the world. It is the only manufacturer in Asia & amongst the 4 global players manufacturing quartz sinks with the German Schock Technology.
(2/23)
Acrysil’s major market:
80% of its revenue comes from exports. Here are its biggest market-
1. USA 2. Germany 3. United Kingdom 4. France
It also has over 1500 dealers in India.
(3/23)
Brands-
The company is a custodian of renowned brands. Let’s look at them:
1. Carysil is an affordable brand of Acrysil which is famous among architects & dealers which is a huge plus because in the export market 75% of the sales are through contract manufacturing.
(4/23)
2. TekCarysil:
It is a new top-of-the-line brand featuring kitchen sinks, faucets and appliances that are of a super-premium range
The brand caters to fast growing market of premium sanitary ware. The brand is owned by Acrysil GmbH, their wholly owned German subsidiary.
(5/23)
Sternhagen: It incorporates cutting edge elegance in design and have been the recipient of the prestigious Red Dot and IF design awards. It has also developed Sani-Q, a patented high-tech quartz material with silk finish, for its sanitary ware & highlighter tiles.
(6/23)
Acrysil’s Product Profile -
It’s four major businesses includes:
1. Steel Sinks : This segment contributes 15% to the company’s top-line.
2. Quartz Sinks : Contributes 75% to the company’s top line.
3. Bathroom Suits
4. Kitchen Appliances
(7/23)
Why invest in Acrysil?
1. Home Improvement Industry:
As COVID-19 put a strain on tourism & other activities, many homeowners, particularly in US & other developed countries, were engaged in home improvement projects to make their residential properties more comfortable
(8/23)
2. Kitchen Sinks Industry
According to Persistence Market Research, the global market for kitchen sinks was valued at $3.1 Billion in 2020 and is estimated to witness a CAGR of 4% over 2020-2030. The market of kitchen sinks is somewhere between 80-90mn units.
(9/23)
3. Marquee Clients:
Associating with global majors has been one of the key reason for Acrysil’s robust turnover. In 2019, for the supply of quartz kitchen sinks, Acrysil tied up with a leading German sanitary brand Grohe, a client with huge potential to bring in revenues
(10/23)
Acrysil X IKEA
In FY21, the company entered into a strategic agreement with IKEA for manufacturing & supply of quartz kitchen sinks to meet their global requirement. This partnership is huge as IKEA is one of the leading players in the home improvement products.
(11/23)
Acrysil has also tied-up with Menard, 3rd largest retail chain in US, to initially distribute around 1,00,000 quartz sinks in all Menards stores across the US. These collaborations would drive the business forward and play a crucial role in aiding the growth.
(12/23)
4. Brand development:
the company has been paying special focus on asserting brand dominance, which is evident from its global partnership with reputed retailers. Acrysil tied up with Sussanne Khan, the famous designer, to promote the brand with builders and architects.
(13/23)
Recently, the company has also signed famous Bollywood celebrity ‘Vaani Kapoor’ for new marketing campaign of its ‘Carysil’ brand. It is also promoting the brands on TV, along with exposure through sponsorship of events like Times Food and MasterChef Australia.
(14/23)
5. Capacity Expansion
Acrysil has been consistently ramping-up production capacities in response to the spurt in demand. Over the past 1.5 year, it has increased its quartz sink manufacturing capacity by almost 70% to 8,40,000 units annually.
(15/23)
The company is further augmenting its quartz sink & stainless steel sink capacity to 1.2 Mn & 0.18 mn units respectively at a capex of
₹68 cr.
Acrysil has invested sufficiently enough for new product development and capacity enhancement over the last five years.
(16/23)
Acrysil’s Financials
The company clocked in highest-ever quarterly revenues of ₹119.41 cr in Q2FY22, up by a massive 57.9% YOY & 22.4%. With this increased sales velocity, operating profits jumped by a dazzling 67.0% thus bolstering OPMs by a pleasing 119 bps to 21.7%.
(17/23)
Combined effect of improved demand and higher price realizations across most of the product portfolio boosted PBT growth to 76.1%. Post tax consolidated earnings rose by 88.4% YOY.
(18/23)
Abundant raw materials availability
& majority of customers contracted on FOB basis provides the company with competitive advantage in dealing with near-term supply-chain difficulties.
This will improvise its cost structure & provide it with necessary economic moat.
(19/23)
Key Risks:
1. Delay in timely execution of orders:
As the company doesn’t have any prior experience in handling big order books, there is a good possibility that the company might not be able to timely cater to the large orders ordered by major global retail chains.
(20/23)
2. Volatility in raw material prices
The company is impacted by volatility in raw material prices as 80% comes from exports. But the company has entered into FOB contracts with majority of its clients to hedge against unprecedented sky-high freight costs.
(21/23)
A robust growth in spending on home improvement products explains the rise in revenue from operations. Moreover, aided by micro- environment factors such as quality control, competitive raw material sourcing, cumulative operating profits is estimated to grow by a 160.8%
(22/23)
Conclusion
Foreseeing huge potential for future growth, Acrysil has been foraying into other diverse markets as well, backed by extensive R&D & marketing. Strong tailwinds are brought by factors such as rising personal income, urbanization & growing housing renovation.
Ukraine officially declared itself an independent country in 1991 as the Soviet Union collapsed. Since then, the country has been forming closer ties with the European Union and with NATO.
Russia sees these ties as an economic & strategic threat to its own security.
(2/19)
What is NATO?
Nato - the North Atlantic Treaty Organisation - is a military alliance formed in 1949 by 12 countries, including the US, Canada, the UK and France.
Its aim was originally to counter the threat of post-war Russian expansion in Europe.
In 2009, Kevin Systrom, a 27-year-old Stanford University graduate, was working at Nextstop, a travel recommendations startup.
He previously worked at Google (GOOG) & interned at Odeo, that would later evolve into Twitter
(2/16)
Systrom didn’t know how to code, so he used learn how to code on the nights after work. He eventually built a prototype of a web app called Burbn. This app allowed users to check in, post their plans, & share photos.
The photo-sharing feature of Burbn was very unique.
It is one of the world’s leading companies in the water treatment space. It provides a complete range of water treatment solutions. It has a strong presence in India, the Middle East, Philippines, Singapore, Tunisia, Turkey & the Czech Republic.
(2/16)
Q3 Numbers-
1. In 3QFY22, consolidated revenue stood at ₹7.4bn; a decline of 6.3% YoY; the fall in top-line was
driven by a decline in overseas revenue, -17.9% YoY while domestic revenues remain
flat (₹5.1bn).
2. Gross margin improved despite inflation by 190bps YOY
Rategain offers a suite of interconnected software products that helps travel and hospitality companies acquire more guests, retain them via personalized guest experiences and maximize their margins!
(2/18)
What is SaaS?
SaaS is a method of delivering software and applications over the internet via a subscription model, where a software is located on an external server. Examples - Adobe Creative Cloud, Microsoft Office 365.