Carysil

Carysil reported a strong Q1 FY26, with total income growing 12.9% YoY to ₹227.3 crores. Profit after tax (PAT) and minority interest saw a significant increase of 43.4% YoY, reaching ₹22.8 crores. The EBITDA margin expanded by 112 basis points to 19.4%, primarily due to the stabilization of raw material and freight costs, coupled with ongoing cost improvement initiatives. Volume growth was notable across segments, with quartz sinks up 22% to 1.89 lakh units, stainless steel sinks up 9.5% to 42.5K units, and kitchen appliances/faucets up 55% to 22K units.

The company is aggressively expanding its manufacturing capabilities to meet growing demand. It secured a significant order from IKEA for quartz sinks, leading to an investment of approximately ₹20 crores in moulds, machinery, and infrastructure, with volumes expected to commence from Q3 FY26. For stainless steel sinks, an additional capacity of 70,000 units is being added, increasing total capacity to 2.5 lakh units, expected to be operational by Q4 FY26. A total capex of around ₹30 crores is planned for new stainless steel sink expansion, partly funded by a ₹10 crore rights issue.

Carysil acknowledges the volatility in the global economy due to tariffs and trade disruptions, particularly the 25% US tariffs on quartz sinks. Management expressed confidence in its ability to navigate these challenges, citing strong customer relationships and a significant cost advantage over European competitors, who face higher tariffs (15%) and inflation. The company has contingency strategies for a potential 50% US tariff increase, aiming to share the burden with customers and leverage its position as the 'lowest cost producer' of Schock technology sinks.

The domestic business grew 10% this quarter, driven by a focus on premium products and expanding distribution. Carysil has appointed a Chief Sales Officer and is implementing a Deloitte-formulated plan to achieve ₹500 crores in domestic revenue by Q3 FY26. This includes adding 100 galleries this year (45 already signed in Q1) and expanding the dealer network by over 1,000 dealers by year-end. The company is also developing its e-commerce platform, targeting ₹50 crores in revenue from this channel within the next five years.

Overseas subsidiaries demonstrated resilience. The UK business, including Carysil Products and Carysil Surface Limited, performed consistently despite a muted economy, with a strong partnership with Howdens. The US subsidiary, United Granite LLC, showed a significant turnaround, with EBITDA improving to ₹1.8 crores and PAT loss reducing to ₹0.8 crores in Q1 FY26. The UAE region also performed well, with 80% of its business from appliances, and plans are underway to open new showrooms in Dubai (7,000 sq ft) and Muscat (5,000 sq ft) to enhance presence.

Carysil continues to enhance its product portfolio, with the Sternhagen and Sussanne Khan collections already localized, leading to improved margins in the domestic market. The company is launching new innovative products in the Sternhagen series in Q3, aiming to further boost margins. In the faucets segment, assembly and manufacturing capacity has been significantly enhanced to 50,000 units per year, with advanced talks for technology transfer from a major European player.