Carysil shares can surge 33%, says Anand Rathi after strong Q2 result

Brokerage firm Anand Rathi has maintained its 'Buy' rating on Carysil Ltd. and raised the price target to ₹1,265 from ₹1,161 earlier, valuing the stock at 30x FY27e/FY28e average EPS.

The brokerage said Carysil delivered a healthy Q2 performance. Revenue rose 16% YoY to ₹240 crore, EBITDA increased 24% YoY to ₹46 crore, and profit grew 62% YoY to ₹27 crore.

Gross margin, however, contracted 374 bps YoY to 51.9% due to an unfavourable product mix and higher input costs. Economies of scale supported EBITDA growth, while higher other income and lower depreciation and interest expenses helped lift earnings.

Management expects 15% revenue growth in FY26 with an 18-20% EBITDA margin. Anand Rathi forecasts 17% revenue CAGR and 25% PAT CAGR over FY25-28.

In the sinks business, revenue grew 22.3% YoY to ₹120 crore, driven by a 23.5% increase in volumes to 198,000 sinks, while realisation was largely flat at ₹5,931 per sink.

Stainless steel sink revenue rose 7.8% YoY to ₹24.5 crore, led by a 7.6% rise in volumes to 43,000 units, with realisation stable at ₹5,656 per sink.

Kitchen appliances and other categories continued to show strong momentum, with revenue up 38% YoY to ₹33.9 crore. The surface business remained muted, inching up 2.2% YoY to ₹650 crore.

Capacity expansion is underway across quartz sinks, stainless steel sinks, kitchen appliances and faucets, funded through internal accruals and capital raised in FY25.

Key risks include a slowdown in residential or commercial real estate, rising input costs, and intensifying competition.

Shares of Carysil Ltd. are trading 1.09% lower at ₹947.60. The stock is up 24% in 2025.