We are glad to inform you that Acrysil target price of Rs. 230 was already achieved couple of months back. Today, Acrysil India Ltd has made its all time high of Rs. 340.50 today hitting upper circuit of 20% and is now giving overall returns of 225% to our members. Acrysil is now our 3-Bagger stock within period of 18 months. Acrysil is one of the stock recommended by us as a 5-Bagger stock in July last year and offers a great long term investment opportunity.
Recently, management have shared their plan to be no. 1 in kitchen segment and set target of becoming a 1000 crore company by 2020. It seems to be an over ambitious target to us considering yearly revenue of Rs. 78 crores in FY 2013, however high growth opportunities in this niche area of kitchen utility products in coming years can not be ruled out. This is one of the industry, which has the potential to grow at CAGR above 25% in coming years considering increase in urbanization and increasing interest of middle class families towards modular kitchen.
We also like to share that there are Hidden Gems which gave negative returns to our members but downside was limited. We suggested our members to exit some of these non performing companies to ensure that they utilize their capital in the most optimum way. We strongly believe that as an smart investor, we should keep on nurturing the best seeds (companies generating free cash flows and utilizing it effectively and rewarding share holders with regular dividends) and erode off the weeds (non performing companies) from our equity portfolio.
Recent Developments (25th Nov 2012)
1. Addition of new Institutional Customers & Entry into new Geographies
Financial Performance (25th Nov 2012)
Acrysil net profit rises 149.38% in the September 2012 quarter
Net profit of Acrysil rose 149.38% to Rs 20.2 million in the quarter ended September 2012 as against Rs 8.1 million during the previous quarter ended September 2011. Sales rose 43.26% to Rs 21.89 crore in the quarter ended September 2012 as against Rs 15.28 crore during the previous quarter ended September 2011.
Future Outlook (25th Nov 2012)
i) Ten-fold rise in India’s middle class: from 50 million to 580 million; with comfortable living standards
ii) The upper middle class expected to swell from 25 million people to over 130 million by 2025
iii) 24 million upper crest Indians (income > Rs 1mn per year, or $ 117,000 PPP) with global lifestyles.
Saral Gyan Recommendation (25th Nov 2012)
1. Sales turnover of the company has doubled in last 5 years, where as net profits have declined in last 4 years due to high raw material prices and slowdown in US and Europe. Company has made an entry into some entirely new geographies like Columbia, Hungary, Iran and Israel. Company has also customized several new models in terms of new styling and design for their existing clientele in Europe, Russia, USA and the Far East to drive growth.
2. Management is now looking aggressive to grab domestic market share for its premium quality products. Company is also increasing its product portfolio to offer complete package of new products to their clientele. Currently, company generates 80% of revenue from exports and now aims to increase their domestic sales from existing 20% to 30% in next couple of years.
3. Domestic sales of the company have increased from 1.1 crores in 2001-02 to 12.4 crores in 2011-12. In fact, in FY 2011-12, domestic sales of the company have grown by nearly 43%. Company is also opening galleries to show case their products in metro cities like Mumbai, Delhi and Ahmedabad to boost sales in domestic markets.
4. As per our estimates, Acrysil can deliver bottom line of 80 million for full financial year 2012 – 13, annualized EPS of Rs. 21.3 with forward P/E ratio of 5.4 X for FY 2012-13, which makes stock an attractive bet at CMP.
5. Management has rewarded share holders by paying consistent dividends since 2006. Dividend yield at current market price is above 3. Recently, company also issued bonus share to share holders at the ratio of 1:2
6. On equity of Rs. 44.58 million, the estimated annualized EPS for FY 12-13 works out to Rs. 21.3 and the Book Value per share is Rs. 73. At current market price of Rs. 113.95, stock price to book value is 1.56, which makes stock valuations reasonable with a long term view of 18-24 months.
Considering reasonable valuations and opportunities in domestic markets of using premium quality products for luxury homes, we find Acrysil Ltd an attractive pick. Saral Gyan Team recommends “BUY” on Acrysil Ltd. for a target of Rs. 230 over a period of 18-24 months.
- 50% at current market price of Rs. 113.95
- 50% at price range of Rs. 95 - 100
Acrysil (India) Ltd is 1 of those 12 multibagger stocks which have given returns in the range of more 100% to 700% returns to our subscribers in last 3.5 years. Team of equity analysts at Saral Gyan put lot of efforts & smart work to identify Hidden Gems (Unexplored Multibagger Small Cap Stocks) and Value Picks (Mid Caps with Plenty of Upside Potential) which not only grow your capital at a healthy rate but also ensures protection of your capital during market downturn.
An opportunity missed an opportunity lost. Start building your equity portfolio by investing in Hidden Gems and Value Picks of stock market. The stocks we reveal through Hidden Gems & Value Picks are companies that are either under-researched or not covered by other stock brokers and research firms. We keep on updating our subscribers on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.
Team - Saral Gyan.