Acrysil stock has made its 52 week high of Rs. 685 this year and closed at Rs. 574.40 this week. Even after correction of 16% from its 52 week high during this year, Acrysil is giving absolute returns of 447% to our Hidden Gems members and is a 5.5-Bagger stock within period of 6 years.
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
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