Is Carysil your next growth stock? Anand Rathi says 'Buy', 28% upside eyed

Carysil share price today: Domestic brokerage Anand Rathi Research has initiated coverage on Carysil stock, a quartz kitchen sink manufacturer, with a ‘Buy’ rating. Having adopted Schock technology from Germany, Carysil is the only manufacturer of quartz sinks in Asia. 

 

The brokerage said Carysil is expanding beyond quartz and stainless steel sinks into built-in kitchen appliances and engineered surfaces. Currently, quartz sinks and surfaces contribute over 75 per cent of its revenue, while major markets like the UK, the US, and India also account for more than 75 per cent of total sales. At present, about 80 per cent of its business comes from overseas markets through distributors (B2B), but the company is now focusing on growing its domestic, consumer-facing (B2C) business, which is expected to improve profit margins.

 

At 12:50 PM, the Carysil share price was trading at ₹917, up 1 per cent on the NSE. In comparison, the benchmark NSE Nifty50 was down 75 points at 25,816 levels.  The stock's 52-week high was at ₹3,067 and 52-week low was at ₹1,845.5 on the NSE. The company's total market capitalisation stood at ₹39,641.14 crore.

Emerging as a one-stop luxury kitchen and bathware brand

"Premium product brands Carysil and Sternhagen are gaining prominence in geographies like the US and the UK, with other geographies following suit slowly," the brokerage said in a note. Carysil manufactures its quartz and stainless steel sinks in India and sells them globally, while its Surfaces products are distributed from the UK and the US. Appliances and other products, including faucets and tiles, are produced in India and sold both domestically and in the Middle East.\  ALSO READ | Tata Motors PV slips after S&P Global revises outlook to 'Negative' 

As of the end of FY25, the company’s production capacities stood at 1 million units for quartz sinks, 0.18 million units for stainless steel sinks, and 0.1 million units for appliances. To tap opportunities in this segment, Carysil plans to expand these capacities by around 25 per cent, 40 per cent, and 2x by FY27, FY26, and FY27, respectively.

Growth momentum to continue with a margin boost

According to analysts at Anand Rathi, Quartz sinks are likely to see traction as wallet-share from marquee global retail giants like Ikea is expected to increase on fulfilling its non-US quartz kitchen-sink requirement. 

 

Additionally, Carysil sees strong growth potential in stainless steel sinks, backed by positive OEM demand from leading brands in India and abroad. Improved performance of overseas units and higher domestic utilisation are expected to support margins. The company maintains a solid balance sheet, with net debt-to-equity at 0.5x in FY25, projected to decline to 0.2x by FY28.  ALSO READ | HUL Q2: Analysts see near-term GST drag, recovery in H2; buy or sell?

Strong outlook

Analysts believe that more orders from global retail giants and the company's widening distribution reach domestically would drive revenue growth, while input cost tailwinds and economies of scale would boost margins. 

 

The brokerage expects revenue, Ebitda, and PAT to grow at a CAGR of 16 per cent, 20 per cent, and 24 per cent, respectively, over FY25–28. It has a 12-month target price of ₹1,161, based on 30x average FY27e/FY28e earnings.  The target implies a 28 per cent upside from Thursday, October 23, closing price of ₹908.3.