This article first appeared on GuruFocus .
Release Date: November 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Carysil Ltd ( BOM:524091 ) achieved its highest-ever Q2 revenue of Rs 275.7 crore, up 14.6% YoY, with H1 revenue growing 15% to Rs 537.9 crore.
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Core sink business remains strong: quartz sink volumes grew 10% to 217,000 units and stainless steel sinks grew 8% to 47,000 units, together contributing 65% of revenue.
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Domestic business grew 30% in H1 and now contributes 21% of revenue (vs. 19% last year), with a target to reach Rs 500 crore in three years.
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New partnerships and product launches: extended Home Depot (US & Canada), signed with Heffler in Australia/New Zealand/Thailand/Indonesia, received first Amazon US order, and plans global launch of nanotechnology-based sinks in 2027.
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Capacity expansions are on track: 250,000 quartz sinks and 150,000 stainless steel sinks by end FY27, and doubling faucet and kitchen appliance capacities to 100,000 units each to reduce import dependence.
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Management expects margin improvement ahead as raw material and freight costs cool down, and maintains FY27 revenue growth guidance of 15% with EBITDA margin of 18-20% (upper end).
Negative Points
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EBITDA margin declined to 19.4% in Q2 FY27 from 20.3% in Q2 FY26 and 21.2% in Q1 FY27, due to higher raw material and sea freight costs.
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UK surfaces business (Carysil Surfaces) revenue degrew 25% and overall surfaces revenue fell 3% due to soft UK demand and new kitchen construction slowdown.
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Kitchen appliances revenue growth was muted at 1% YoY in Q2 due to supply chain issues and BIS certification transition, though QoQ growth was 10%.
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United Granite (US) revenue growth slowed to 4% in Q2, though H1 growth was over 10%.
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CFO Anand Sharma resigned due to personal challenges; new CFO is yet to be appointed, though candidates have been shortlisted.
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Employee costs increased rapidly due to expansion and pre-emptive hiring, impacting EBITDA margins; however, management expects dilution as new capacity ramps up.
Q & A Highlights
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Q: With the US election outcome now clear, do you expect political or industrial changes that could benefit Carysil, and what is the visibility on new orders? A: Chairman Chirag Parekh said the biggest positive is the improved sentiment toward India, easing the tariff overhang that had been weighing on the business. He noted US customers across Lowe's, Home Depot, Menards, MSI and others are excited, with planned factory visits and a surge of fresh inquiries in both granite and stainless steel sinks. He also flagged supply chain disruption from Europe to the US as an opportunity, and said the company will launch nanotechnology-based sinks and new premium stainless steel sinks at the KBIS show in Las Vegas in the first week of February 2027.
Q: Is the 15% FY27 revenue growth guidance conservative given the new partnerships and customer optimism, and could it be revised upward? A: Chirag Parekh said he has never seen this level of optimism and positivity in demand, with strong interest from Europe and the US and some large deals on the edge. He indicated that if these deals materialize, growth could exceed 15%, but the company prefers to stay conservative and not overpromise for now.
Q: What drove the Q2 FY27 EBITDA margin down to 19.4% from 20.3% a year ago, and how do you see margins going forward? A: Group CFO Anand Sharma attributed the decline to higher raw material costs and sea freight, with these factors costing about 1.5% to 2% of margin. He said Q2 was the most challenging quarter in terms of input costs, but raw material prices and freight are now cooling off, so margins should improve going forward. The company maintains its 18% to 20% EBITDA margin guidance and aims for the upper end.
Q: What is the progress on the India business, and what is the strategy to reach the Rs 500 crore domestic revenue target? A: Chirag Parekh acknowledged the company is underperforming as a brand in India and has hired PwC for a leadership restructuring. The India business will be split into e-commerce, B2B and B2C verticals, and further by category (sinks and appliances) to create accountability and KPI-based monitoring. The company will expand its team around the top 8 to 10 performing regions and expects to announce a new team and structure within 30 to 60 days. India contributed 21% of revenue in H1 versus 19% last year, with 30% growth.
Q: How should we look at advertising and branding expenses given the India expansion and the new brand ambassador? A: Chirag Parekh said Carysil has only about 20 brand stores in India versus 150 to 200 for peers, and plans to invest Rs 25 to 30 crore in FY27 on brand store expansion. The company will allocate about 5% of revenue purely to advertising and branding, funded by discontinuing the 5% extra discount given to distributors, so margins are not disturbed. Actor Bobby Deol will feature across TV, social media and billboards from December.
Q: Why have surfaces revenues declined 3% (with the UK subsidiary down 25%), and what is the near-term outlook? A: Chirag Parekh said the UK market is passing through a rough time, and surfaces go mainly into new kitchens, which are being built less. In contrast, kitchen sinks serve the replacement market, which performs well even in downturns, explaining why Carysil Products UK grew 11%. A new head for surfaces has been appointed and takes charge next month, and the company is hopeful of an increase in surfaces in the coming quarter.
Q: Why did employee and other expenses rise sharply in Q2, and will this pressure continue? A: Chirag Parekh said the company is in rapid expansion mode and is training and hiring people ahead of new capacity, including a CTO, project heads and engineers, causing overlapping employee costs. Once the new capacity and sales come on stream by March 2027, employee costs will be diluted as a percentage of revenue, and he does not see the ratio rising in FY27.
Q: How is the capacity ramp-up plan progressing, and would you need further CapEx beyond the current expansion? A: Chirag Parekh said the infrastructure is being built for 500,000 quartz sinks, with the first phase of 250,000 units of machinery; adding the next 250,000 units would take about four months. The company ran above 100% capacity in one month through incentives and production cycle improvements. He said the long-term targets of 1.5 million quartz sinks and 500,000 stainless steel sinks remain on track, and there is ample land to enhance capacity further if large deals materialize.
Q: What is the progress on the agreements with retailers in Australia, New Zealand and Canada? A: Chirag Parekh said Carysil has signed a strong deal with Hafele for Australia and New Zealand, with first orders received this quarter to be dispatched next month. The deal is for roughly 25,000 to 30,000 sinks a year, and orders have also been received from Canada.
Q: What is the outlook for the stainless steel sink business, where volumes were flat despite capacity addition? A: Chirag Parekh said the stainless steel plant ran at 91% utilization and sales should improve quarter on quarter. He noted huge new inquiries for stainless steel, with the new technology for pressing sinks with 15 and 25 radius to be implemented in Q4. He also said the first stainless steel sink orders from US customers are expected by end of this year.
Q: What is the status of the CFO transition following Anand Sharma's resignation? A: Chirag Parekh said Anand Sharma has been a tremendous contributor with a great relationship, but has personal challenges, and the company respects that. As Carysil enters its next growth phase, it wants CXO-level leaders working closely with the Chairman. Candidates have already been shortlisted and a new CFO should be appointed soon.
Q: What are the returns expected from doubling the faucet and kitchen appliance capacities by end of FY27? A: Group CFO Anand Sharma said this is an asset-light assembly model, with asset turnover expected at five to six times the CapEx. Utilization is expected to gradually ramp
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
