Carysil Ltd. share price target

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Carysil’s Q2 revenue/EBITDA/PAT grew 16/24/62% y/y to Rs2.4bn/461m/272m. Gross margin contracted 374bps y/y to 51.9%, due to change in product-mix and higher input cost.

Healthy Volume but higher cost squeeze profits

Integration costs along with slow domestic growth hurt performance

Growth momentum continues; outlook robust

Growth momentum back on track; outlook robust

In Q1FY24, Carysil Ltd. reported a revenue decline of 2.7% QoQ / 17.3% YoY to Rs. 171.3 crores in Q1FY24 owing to lower production and sales due to SAP implementation in April 2023, thus missing market expectations of Rs. 160.2 crores. On a sequential basis, the GP and EBITDA margins improved 176 bps / 38 bps to 49.9% and 18.4%, respectively, with the normalization in freight and other input costs of the business which outweighed an uptick in employee expenses.

Growth to accelerate from Q2; outlook robust

Inline numbers: order inflows improve

Going forward, we estimate 25%, 24% and 19% Revenue, EBITDA and PAT CAGR respectively till FY24, driven by improvement in demand from exports and an increase in the utilization of the existing capacities. Further the increased focus on domestic business will help the company to scale its brand Carysil.

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