Anand Rathi Share and Stock Brokers (ARSSBL) has reaffirmed its bullish stance on Carysil, projecting a 31% upside over the next 12 months with a revised target price of INR 1,265. The brokerage believes Carysil’s strong Q2 FY26 execution, margin recovery, and capacity expansion across core product lines will underpin a multi-year growth cycle.
While near-term margins face pressure from input costs and product-mix changes, the firm maintains that Carysil’s medium-term story remains compelling — a global kitchen solutions brand leveraging premiumization trends, the “China+1” supply shift, and rising domestic demand for modular kitchens.
Adding further weight to the optimism, ace investor Ashish Kacholia — celebrated for his precision in mid-cap manufacturing bets — holds 10 lakh shares (3.52% stake), valued at around INR 99.8 crore. With Anand Rathi reiterating its “Buy” rating and raising its target from INR 1,161 to 1,265, Kacholia’s conviction in Carysil could once again prove prescient.
A Strong Quarter Reinforces the Bull Case
Carysil’s Q2 FY26 numbers underline its operational resilience. Revenue rose 16.2% YoY to INR 240 crore, EBITDA grew 24% YoY to INR 46.1 crore, and PAT surged 61.8% YoY to INR 27.2 crore.
While gross margins contracted by 374bps to 51.9% due to higher input costs, efficiencies and scale leverage offset much of the drag. EBITDA margin improved 119bps to 19.2%, signalling better cost control and product-mix optimisation.
The brokerage notes that “healthy demand, cost discipline, and operating leverage” helped Carysil deliver above-industry growth — even as global volatility challenged peers in the home and building-materials sector.
Quartz Still the Core, Appliances Gaining Momentum
- Quartz Sinks (Consistent Global Demand): Revenue from quartz sinks grew 22.3% YoY to INR 117 crore, with volumes up 23.5% to 1,98,000 units. Capacity utilisation hit 88%, reflecting near-saturation levels — a precursor to the next round of capacity expansion already underway.
- Stainless Steel Sinks (Beneficiary of the China+1 Trend): The stainless-steel sink vertical saw 7.8% YoY growth to INR 24.5 crore, maintaining healthy 95% utilisation. Global OEM clients, diversifying supply chains away from China, are increasingly sourcing from Carysil — a long-term structural positive.
- Appliances & Others (Domestic Demand Rising): Appliance and accessory revenue surged 38% YoY to INR 33.9 crore, supported by growing domestic appetite for built-in kitchen products. Carysil’s consistent retail expansion — 300–350 new dealers per month and 30 new shop-in-shop galleries — is accelerating its footprint in India’s fast-growing urban markets.
- Surfaces (Strategic Diversification): Revenue from the surfaces segment rose modestly to INR 65.0 crore (up 2.2% YoY). Management is now pivoting toward “harder surface” materials, which dominate 90% of the global surface market, aiming to expand margins and market share internationally.
Expansion Plans to Drive Next Leg of Growth
Carysil’s capacity expansion across verticals reinforces Anand Rathi’s positive stance:
- Quartz sink capacity: +1,00,000 units by Dec 2025 (INR 5 crore capex)
- Stainless steel sinks: +70,000 units by FY27
- Faucets: expanding to 1,50,000 units annually by FY27
- Appliances: enhanced OEM partnerships and assembly capacity to scale exports
With these projects funded largely by internal accruals and earlier fundraises, the company’s net debt-to-equity is expected to decline from 0.5x in FY25 to 0.3x by FY28, strengthening its balance sheet ahead of an aggressive growth phase.
Global Leverage and Strategic Partnerships
Carysil’s international exposure continues to grow. Supplies to IKEA have commenced, while its partnership with Lowe’s has earned the company a joint supplier excellence award. The company’s non-U.S. business — spanning Europe, the Middle East, and emerging regions — remains a strong contributor, even as the U.S. subsidiary has turned profitable.
Domestically, Carysil is evolving from a niche premium brand to a mass aspirational one, leveraging design, technology, and brand collaborations to capture India’s premiumization trend in kitchen solutions.
Anand Rathi Coverage on Carysil: Financials & Valuation
Anand Rathi projects Carysil’s revenue and PAT to grow at 17% and 25% CAGR, respectively, over FY25–FY28, with stable EBITDA margins of 18–20%.
| Metric | FY25 | FY26E | FY27E | FY28E |
|---|---|---|---|---|
| Revenue | 815.6 | 973.7 | 1,134.0 | 1,344.3 |
| EBITDA | 137.3 | 167.4 | 203.7 | 252.1 |
| PAT | 63.8 | 82.1 | 104.6 | 134.9 |
| EPS (INR) | 22.4 | 28.9 | 36.8 | 47.5 |
| P/E (x) | 44.6 | 34.7 | 27.2 | 21.1 |
Return ratios remain healthy, with RoE expected to reach 17.6% and RoCE 15.5% by FY28. Free cash flow is set to turn decisively positive from FY26, enabling both dividend continuity and reinvestment capacity.
At INR 963, Carysil trades below its long-term average multiples, offering an appealing risk-reward profile. Anand Rathi’s INR 1,265 target values the company at 30x FY27–FY28 average EPS, justified by its export-led growth and superior margin profile.
Multibagger Performance
In December 2020, Carysil shares share price was in the INR 160–170 range. On 14 November, the stock touched its all-time high of INR 1,035, marking a remarkable 546% increase over its price five years earlier. At present, Carysil shares are trading around INR 963, reflecting a correction of approximately 7% from the all-time high.
Risks and Sensitivities
Key risks include a slowdown in real-estate or housing demand, elevated input costs (particularly resins and steel), and intensifying competition from global and domestic peers. Nevertheless, diversified geography, high utilization levels, and a lean balance sheet mitigate much of the cyclical risk.
Final Words
Carysil’s story now sits at the intersection of engineering excellence, brand evolution, and market opportunity. As capacity expansions kick in and export visibility strengthens, both institutional and marquee investors like Ashish Kacholia are betting on sustained compounding potential.
With a 30% upside forecast, consistent earnings visibility, and a strengthening brand narrative, Carysil may be on the verge of re-rating — from a specialised manufacturer to a global mid-cap leader in premium kitchen solutions.
As Anand Rathi concludes: “Healthy show, expanding capacity, and strong outlook — the recipe remains right.”
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Disclaimer: This article is for informational purposes only. It is not investment advice. Investors should conduct independent research before making decisions.