A Little introduction on the fundamentals...
for details on the Q1 financial's analysis, check my post on this thread.... forum.valuepick...n-sinks/1060/48?u=capsule9... and here is the summary of the numbers break up... drive.google.co...m2K1OAwcEC/view?usp=sharin...
the cyclical play in quartz as a new age material to grab to sink market share seems to be beginning an uptrend..
acrysil being one of the 4 companies in the world to manufacture these sinks with a distribution network spread over 43 countries, with particular hold of the uk market via a 98percent own subsidiary homestyl uk has the reach to cater to this cycle...
the company's activity speaks for the same, with rapid expansion of capacity, peaking of advertising expenses , opening up new distribution networks and recently grabbing new customers who handle retail chain internationally, successful pass through of the inflated input cost to the customers, finally a robust q1 result with drastic uptick of realization in the sink business at the same time adequate clearing of inventory during the quarter, should tickle the market to give the valuations the company deserves...
while the company has been maintaining the bullish stance on the bath segment, which is yet to show the traction street expects, the subsidiaries put up a lukewarm show in the number sin the quarters, putting up a record low ebitda margin..
how ever the sink business with good volume growth and realization was enough to absorb the head winds from the muted subsidiary business numbers, forex losses on finance cost and a 40percent inflation of input const since 1 year and has ended the quarter with commendable margin of 13.4% , which is near equivalent to q1fy19 when the crude was low and the resin costs hadnt gone up 2.5x and the rupee was high...
the company guidance to the street was 20percent uptick in the topline with margins of around 16 percent...
in the quarter they finished with 30percent yoy and 19% qoq topline growth, with ebitda growing 90percent in the standalone business..
EBITDA- 808.26L
EBITDA adjusted with forex loss/gain-
growth is 38.63% yoy and 64.6% qoq
PAT growth yoy 16.66% and qoq is 77.14%
maintaining the current runrate, over next 3 quarters, the company would end up with 40percent growth in earnings after tax..
further tailwinds from softening crude , appreciating rupee , sternhagen bath sgment launch into the uk market which is planned from q2, and better performance from the subsidiaries, should lead to further growth over next few quarters..
the other expense segment has shown a uncanny uptick this quarter, reason for which i will be clearing in the concall, most probably there would be some one off item there, which if is not incurred in the following quarters , will aid the margins further....
foot note, the sternhagen concrete tiles which the company will be starting production this financial year, regarding which the company is very bullish, not only as a branded product but also oem supplying opportunities , might also be priced in soon enough at the top of the euphoria, as the company is going to be the second one in the world to be producing the segment...
Considering the scenario where the business is back on track after the shock from the input cost hyperinflation, and the demand uptick to absorb the newly installed incremental capacity,
price targets are as high as 1079 on the charts...
how ever a modest target of 795 seems easily achievable over the next six months...
targets have been derived from the point and figure chart
disclaimer.... invested
not an investing/trading recommendation
for details on the Q1 financial's analysis, check my post on this thread.... forum.valuepick...n-sinks/1060/48?u=capsule9... and here is the summary of the numbers break up... drive.google.co...m2K1OAwcEC/view?usp=sharin...
the cyclical play in quartz as a new age material to grab to sink market share seems to be beginning an uptrend..
acrysil being one of the 4 companies in the world to manufacture these sinks with a distribution network spread over 43 countries, with particular hold of the uk market via a 98percent own subsidiary homestyl uk has the reach to cater to this cycle...
the company's activity speaks for the same, with rapid expansion of capacity, peaking of advertising expenses , opening up new distribution networks and recently grabbing new customers who handle retail chain internationally, successful pass through of the inflated input cost to the customers, finally a robust q1 result with drastic uptick of realization in the sink business at the same time adequate clearing of inventory during the quarter, should tickle the market to give the valuations the company deserves...
while the company has been maintaining the bullish stance on the bath segment, which is yet to show the traction street expects, the subsidiaries put up a lukewarm show in the number sin the quarters, putting up a record low ebitda margin..
how ever the sink business with good volume growth and realization was enough to absorb the head winds from the muted subsidiary business numbers, forex losses on finance cost and a 40percent inflation of input const since 1 year and has ended the quarter with commendable margin of 13.4% , which is near equivalent to q1fy19 when the crude was low and the resin costs hadnt gone up 2.5x and the rupee was high...
the company guidance to the street was 20percent uptick in the topline with margins of around 16 percent...
in the quarter they finished with 30percent yoy and 19% qoq topline growth, with ebitda growing 90percent in the standalone business..
EBITDA- 808.26L
EBITDA adjusted with forex loss/gain-
growth is 38.63% yoy and 64.6% qoq
PAT growth yoy 16.66% and qoq is 77.14%
maintaining the current runrate, over next 3 quarters, the company would end up with 40percent growth in earnings after tax..
further tailwinds from softening crude , appreciating rupee , sternhagen bath sgment launch into the uk market which is planned from q2, and better performance from the subsidiaries, should lead to further growth over next few quarters..
the other expense segment has shown a uncanny uptick this quarter, reason for which i will be clearing in the concall, most probably there would be some one off item there, which if is not incurred in the following quarters , will aid the margins further....
foot note, the sternhagen concrete tiles which the company will be starting production this financial year, regarding which the company is very bullish, not only as a branded product but also oem supplying opportunities , might also be priced in soon enough at the top of the euphoria, as the company is going to be the second one in the world to be producing the segment...
Considering the scenario where the business is back on track after the shock from the input cost hyperinflation, and the demand uptick to absorb the newly installed incremental capacity,
price targets are as high as 1079 on the charts...
how ever a modest target of 795 seems easily achievable over the next six months...
targets have been derived from the point and figure chart
disclaimer.... invested
not an investing/trading recommendation