Carysil Ltd: Crafting the future of modern kitchens - Company Update

We retain our BUY rating on Carysil Ltd with a revised target price of Rs 1,190 (earlier Rs 1,140), factoring in a rollover to Q3FY28E and a ~4% trim to FY27E–FY28E earnings. Strong traction in quartz and stainless-steel sinks, upcoming capacity expansion, and US tariff reduction from ~50% to ~18% (enabling discount reversal and margin expansion) underpin growth visibility. Domestically, 19.4% growth and expansion into kitchen appliances support the company’s ambition to build a Rs 5bn India business over the next 3–4 years. With a strong B2B franchise, premiumisation tailwinds, and expanding B2C presence, Carysil is positioned to deliver ~18% revenue CAGR over FY25–FY28E, with valuations attractive at <18x FY28E EPS.

Steady revenue growth:

Carysil Ltd delivered steady revenue growth of 9.6% YoY to Rs 2,226mn (-7.5% QoQ) driven by Quartz and stainless steel sinks division. Quartz sinks/ Stainless steel sinks division representing 52% and 11% of sales delivered a growth of 15.6% YoY and 26.9% YoY respectively to Rs 1,157mn and 245mn. Both the divisions reported volume growth of 26.7% and 24.5% YoY respectively while realizations declined by 9% for Quartz (on account of discounting to USA clients) and improved by 2% for stainless steel sinks.  Kitchen appliances, faucets and other products (11% of sales) division revenues declined by 15.8% YoY to Rs 245mn. Solid surface division (26% of sales) revenues grew by 6% YoY to Rs 579mn.

Favourable RMT lead to margin expansion:

Gross margins for the quarter expanded by 284bps YoY to 54.8% (+297bps QoQ) on account of favourable RMT which is expected to sustain for next 2-3 months as well. Additionally strong control in opex costs (other expenses and employee costs grew by only 3% and 10% YoY) lead to OPM expansion of 477bps YoY to 19% (-21bps QoQ). Going forward, margins are expected to increase further on account of reversal of discounts being passed to USA customers on account of tarrifs reduction from 50% to 18%. EBITDA for the quarter stood at Rs 422mn (+46.5% YoY, -8.5% QoQ). PAT for the quarter stood at Rs 213mn (+69.7% YoY, -22.5% QoQ).

Outlook:

Carysil is currently operating at ~80% utilization in quartz sinks and ~90% in stainless steel sinks, indicating strong demand and limited headroom, which will be meaningfully addressed by the addition of new capacities of 100,000 units in quartz and 70,000 units in stainless steel by April 2026. The recent tariff reduction in the US from ~50% to ~18% presents a significant upside opportunity, as the company had earlier absorbed the impact through customer discounts to protect market share, despite remaining cost-competitive versus global peers. With tariffs reversing, these discounts are expected to be rolled back, leading to margin expansion and earnings uplift. Carysil’s position as the sole quartz sink supplier to Karran (~150,000 units annually), along with supplies to Grohe and marquee clients such as IKEA in non-US markets, underpins strong long-term export visibility. Additionally, management’s strategic intent to scale the domestic business to a Rs 5bn opportunity over the next 3–4 years further strengthens confidence in Carysil’s sustained long-term growth trajectory.

Valuation and view:

We expect Carysil to deliver a Revenue/EBITDA/PAT CAGR of 17%/24%/36% over FY25–FY28E. At 17x topline CAGR, the stock looks attractive with 320bps of margin expansion and ROE to improve from 12.2% to 17.5% over the same period.  We value the stock at 22x Q3FY28E EPS of Rs 54, arriving at our target price of Rs 1,190. Key risks: delay in order execution, shipment disruptions, and a sharp rise in input costs.

Company website: https://carysil.com/

*CMP is as per report published date

Click to download the full Carysil Ltd Q3FY26 Company Update

Analyst:

• Rahul Dani - Research Analyst, Institutional Equities (NISM-201500034725)
• Vaidik Bafna - Research Associate, Institutional Equities (NISM-202100035711)

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FAQs on Carysil Ltd Q3FY26 Company Update

Below are quick answers to common investor questions on the Carysil investment opportunity, including entry levels, targets and key growth triggers.

1. What is the ideal buying zone for Carysil?

Traders can consider accumulating the stock near the ₹900–960 range based on current price levels and support zones.

2. What is the expected target price?

The stock has upside potential towards ₹1,190

3. What stop loss should be maintained?

A stop loss below ₹820 on a closing basis is recommended to manage downside risk.

4. What are the key factors supporting the bullish outlook?

Strong export demand, capacity expansion, margin recovery from US tariff reduction and premium product mix support earnings growth.

5. What are the key risks to the trade?

Delay in capacity ramp-up, shipment disruptions, order execution risks or a sharp increase in raw material costs may impact performance.

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