Carysil Limited (NSE: CARYSIL) Q2 2025 Earnings Call dated Nov. 08, 2024
Corporate Participants:
Chirag Parekh — Chairman and Managing Director
Anand Sharma — Executive Director and Group Chief Financial officer
Analysts:
Anay Mittal — Analyst
Harsh Shah — Analyst
Udit Gajiwala — Analyst
Yug Patil — Analyst
Abhilasha Satale — Analyst
Rohit Singh — Analyst
Resha Mehta — Analyst
Vaidik Bafna — Analyst
Vaibhav Saboo — Analyst
Shraddha Kapadia — Analyst
Akash Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Carysil Limited Q2 H1 FY25 Earnings Conference Call. This conference call may contain forward-looking statement about the company, which are based on the beliefs, opinion, and expectation of the company as on date of this call. The statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Chirag, Promoter and Managing Director. Thank you, and over to you, sir.
Chirag Parekh — Chairman and Managing Director
Thank you. Good afternoon, ladies and gentlemen. Thank you for joining the Carysil Limited Quarter Two FY25 Earnings Conference Call. I trust you had opportunity to review our financial results and investor presentation, both available on the company’s website and our stock exchanges. Joining me on the call are Mr. Anand Sharma, Executive Director and Group CFO; and SGA, our Investor Relation advisers.
The global economy has shown remarkable resilience, sustaining steady growth despite facing numerous challenges. The tightening of the monetary policies has helped reduced inflation. However, the growth in advanced economics comprised to some extent in the process of contain inflation. The coordinated efforts by various governments and central banks working in tandem has supported a positive growth trajectory across different regions, enhancing stability and create a more favorable outlook for both developed and emerging markets. Furthermore, these improvements have established a solid foundation for continued recovery, fostering investment aiding the gradual return of the precrisis economic conditions.
The Red Sea issue originally viewed as a short term has elongated, creating supply chain disruption and increased our freight cost. Geopolitical situations have created some uncertainty and are impacting growth momentum. The Indian economy successfully carried forward and strong momentum from FY23 and ’24, demonstrating resilience despite a range of global and external challenges.
The government’s emphasis on maintaining macroeconomic stability played a critical role in mitigating the impact of these challenges on India’s growth trajectory. As a result, India’s real GDP achieved robust growth by expanding 8.2% in FY24. This marks for the third consecutive year of growth rates surpassing 7% driven by sustained domestical consumption demand and a steady rise in investment activity. Stable consumption demand fueled by increasing income levels and the growing middle class remained the key driver to the growth. Additionally, structural reforms and regulatory improvements helped attract investment across key sectors, further strengthening India’s economic outlook.
At Carysil, we believe that innovation and high-quality product resonate with the changing customer aspirations and evolving marketing dynamics. We endeavor to innovate and process and make them streamlined and efficient. We understand this pursuit of consistent improvement is key to our vision to become one-stop solution kitchen and bathroom products. We have sought to offer premium product services being ahead of the core technologies and provide world-class products to our global customers. This business model enables to export our quartz sinks to more than 50 countries worldwide.
Carysil takes pride in being the custodian of the esteemed brands such as Carysil, Tek Carysil, Sternhagen. Over the years, these brands have earned a play distinction in the minds of both influencers and consumers. Carysil quartz sinks are sought by discerning customer worldwide, while Tek has been known for high-end kitchen sinks represent the epitome of exceptional design, style and quality. Sternhagen, a symbol of luxury in design engineering is poised to redefine the luxury bathroom segment, both in India and globally.
We are pleased with our performance. Our consolidated revenue quarter two FY25 grew by 25.8% and for H1 ’25 by 33.2% on Y-o-Y basis. This growth is primarily driven by our strong presence in international markets and exports accounting for 81.6% of our total revenue in H1 FY25. We continue to excel in this area as the entire product portfolio is rapidly becoming the preferred choice in the kitchen segment globally.
Our performance in the US and UK continues to show positive signs. We anticipate this momentum carrying forward. Europe has shown early signs of recovery, and we are prepared to seize the opportunity as it arises and overall improvement in the European market will significantly boost our entire product range.
Our capacity utilization for the quartz business is currently about 60% to 65%. H1 ’25 for the steel business capacity stood at about more than 90% H1 FY25 and our Faucet division recently expanded capacity of 40,000 units annually, bringing the total capacity to 50,000 units. We invested about more than INR5 crores — INR4 crores and expand strategically working towards increasing our capacity to 100,000 units per annum.
Changing consumer lifestyles, increasing customer awareness, the growing working population, rising female workforce participation, higher disposable incomes, and the availability of various financial options are driving trends that suggest the kitchen appliance market in India is poised for significant growth. 100,000 units per annum capacity for appliances is now live and now already started receiving positive responses. We plan to proceed cautiously in this category with the fast-moving model and gradually moving to the entire rates.
You also heard about the BI certification getting restrictions in India and which will give us a further opportunity for us in the built-in appliances sector, and we’re looking for a great FY25 with the built-in appliances for India market. At Carysil FZ LLC, which is our subsidiary based in UAE in the GCC market has strong demand traction. We continue to see promising growth and believe this trend will expand significantly. Our operations in Turkey have commenced, and we’re excited about this new initiative of brand-building Carysil and due to its high growth potential.
Regarding the performance of overseas subsidiaries, United Granite LLC has experienced subdued demand due to local US factors, resulting in a muted performance. However, we anticipate a turnaround in the beginning of the FY25, ’26. On the other hand, the UK subsidiaries, Carysil products and Carysil services limits are progressing well, and we continue to see it perform better. Globally, the situation will change now with the change of the air in the US.
Our domestic growth business is showing strong progress with revenue growing by 14.2% in H1 FY25 to INR75 crores, spreading from INR3 crores — up from INR65.9 crores in H1 FY24. This growth is a result of our focused efforts over past year performance dealer and distribution network, which expanded from 1,500 dealers to more than 3,500-plus dealers in ’25.
We have also appointed Mr. Nikkila Shridar, our B2B Head. We have appointed Mr. Rakesh Nair with a 14-year experience of President of Sternhagen and Talesil South. Initiatives have started to reflect positively on the performance and confident continued momentum going forward. We also cracked upon this new chain of electronic stores in India, which will give a further growth momentum in the year FY25, ’26.
At Carysil, we take pride in being a global — growing global company recognized for delivering innovative and unique products. The success is driven by team’s dedication, determination and passion to turn ideas into realities. Our employees are team-motivated and committed to provide exceptional value to our customers every day.
With this, I hand over to the call to Mr. Anand Sharma, our Executive Director and Group CFO, to brief you on the financial performance. Thank you. Over to you, Anand sir.
Anand Sharma — Executive Director and Group Chief Financial officer
Thank you, sir. Good afternoon, everyone. Let me take you through the company consolidated financial performance. Quarter two FY25 performance Consolidated income stood at INR206.9 crores from Q2 FY25, grew by 25.8% on Y-o-Y basis. EBITDA for quarter two FY25 stood at INR37.1 crores grew by 9.2% Y-o-Y. EBITDA margin for quarter two FY25 stood at 17.9%. EBITDA margin impacted mainly due to increase in raw material costs and export trade due to red sea issues. Profit after tax and margin interest stood at INR16.8 crores in Q2 FY25 grew by 8.7% on Y-o-Y basis.
Coming to H1 FY25 performance, sales volume for Quartz sinks stood at 315,044 units standard steel sink stood at 79,167 units, kitchen appliances and others stood at 28,877 units in H1 FY25. Consolidated total income stood at INR409.2 crores for H1 FY25 as compared to INR307.3 crores in H1 FY24. It grew by 33.2% Y-o-Y. EBITDA for H1 FY25 stood at INR74.1 crore as compared to INR61.3 crore in H1 FY24, growth by 20.8% Y-o-Y. EBITDA margin for H1 FY25 stood at 18.1%. Profit after tax and after margin interest incurred stood at INR32.7 crores in H1 FY25 as compared to INR27 crores in H1 FY24, this grew by 21.1%. Gross debt at the company level stood at INR255.8 crores as of 30th December 2024. The two equities stood at 0.5.
Thank you. Now I open the floor for questions to answer. Over to you, operator.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of Anay Mittal from Nvest Analytics Advisors LLP. Please go ahead. Please go ahead, sir. Your line has been unmuted.
Anay Mittal
Hello. Am I audible?
Operator
Yes, you are audible.
Anay Mittal
Good morning, sir. My first question is on the margin side, like we used to guide for the 18% to 20% kind of margin. But if we look at last four quarters, our margins are on the lower side of our guidance. So how do you look upon it and how the situation is going to be improved in upcoming quarters? That is my first question.
Chirag Parekh
Okay. So I would like to answer your first question. Thanks for connecting with us. Last time I had said that there’s been a product mix because we had seen a decline in the US sales, which is a high-valued territory for us. And to some extent, we — the margins were compromised because the US sales had gone down in the last quarters. And at the same time, we mentioned that we had the Red Sea crisis. The freight charges right now has tripled and we are fortunate that we only have about 10% of the CIF, so we’re not impacted much.
An on top of that, we had — because of the geopolitical crisis, you had the raw materials, especially the acrylic prices on a higher side. So moving forward, since we have been seeing a good traction in the US order situation right now coming from quarter three. Adding to it, we’ve been already seeing the export freight going down, the raw material prices of acrylic coming down. So we see moving forward as scope of the margin expansion. Thank you.
Anay Mittal
When we say raw material prices are going down, so are we not able to pass on the thing?
Chirag Parekh
So sometimes, they are so fast, it’s very temporary. So is there any temporary situation, we do not try to disturb it with our customers.
Anay Mittal
So that means from Q2 — Q3 onwards, we are going to see some improvement in the margins. Is that the understanding correct?
Chirag Parekh
Yes, yes, yes.
Anay Mittal
Okay, sir. Secondly, on sir, domestic side, like last quarter also, I asked about the domestic growth. Like you mentioned, we are outperforming our peers considering the kind of demand is there in the domestic market. So how do you feel like considering the inflation in the levels of the unemployment rate? How do you see the second half, whether there will be any improvement in the urban demand from domestic consumption side?
Chirag Parekh
Yeah, good. So I think the question is good. I think looking at the domestic situation, what I hear and whatever the data I’ve been getting, I think domestic, the economy is quite muted. It’s quite soft, especially the retail side of it. But we’ve been able to do — my team is to do quite a good job because of the glass growth initiatives, our focus on the faucets and the appliances, I think we have shown a good performance. Our faucet sales have improved by 50% growth. So overall, I think we have shown about a 9.2%, I think our 9% growth in the domestic market.
Moving forward, we are launching about 20 new faucet models in the ATEC. We’re launching a whole new line of smart built-in appliances with some amazing features. Third, we are launching a complete new range of kitchen sink products. which we’re going to exhibit at the ATEC exhibition in Mumbai, November 16 to 19. If anybody of you are free should come and see us. So we are looking at a good traction, further building momentum indeed in the domestic market. We believe that — where the overall demand in the India retail market can be muted, but the scope for Carysil because since it’s a premium product, there has been a lot of traction for our products. And adding to it, we are also forcing — focusing on the e-commerce line. We are building a new team for the e-com. So we — a lot of the old products, we are moving it from our current product line to the e-commerce line to give boost to the e-commerce. So we are looking at a good positive quarter in the domestic market.
Anay Mittal
Actually, I asked particularly from the macro side, like how do you see macros improving for second half, as compared to first half from domestic market?
Chirag Parekh
Yeah. So that’s what I said that we are — that we see — so for the sink side, I think we are expecting a good growth. The lifestyle products traction is improving. So we see that trend changing. We are launching a lot of new products. So we expect the H2 to be better than H1.
Anay Mittal
In H1, we did around INR73 crores and I think for a yearly basis, we are having a target of around INR150 crores. So are you sure — are you confident enough like we are going to beat that target or achieve that target at least?
Chirag Parekh
So I think right now, we are on a good momentum path and looking at what the strategies we have, I think we are quite confident that we’ll be able to achieve our targets, yes.
Anay Mittal
Understood, sir. I’ll join the queue, sir. Thank you.
Chirag Parekh
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your question to two per participant. The next question is from the line of Harsh Shah from Dalal & Broacha Stock Broking. Please go ahead.
Harsh Shah
Yeah. Thanks for the opportunity. A few questions from my side. So firstly, on the gross margin within the stand-alone operation. So when I compare FY24 to the first two quarters of this financial year, what we are seeing is that the gross margin has gone down from 61% to 58%. Could you give some understanding? Is it purely to do with the product mix or even to some extent, the RM cost has impacted this? And should we expect this gross margin in the standalone operations to be the new normal or you expect this to inch upwards?Yeah, that was my first question.
Chirag Parekh
Yeah. So I will ask my CFO to answer, but before my CFO answers, all I want to tell you is the company is launching a lot of high-value-added products. So overall, the gross margins of the company will improve. Further the detailing part, I’ll ask my CFO to answer. Yeah, Anand, if you can take that up, please. Thank you.
Anand Sharma
Yeah. So I think this gross margin is a factor of both. One is the sales mix and geography mix, which geography we are selling. And second is the raw material prices, which we already talked about. So raw material prices increased during this period of current half, it is around 3% higher than what we see in the last financial year. So that has impacted. And some geographical mix also had impacts. But overall, fundamentally, gross margin is same and it will come back because we have seen the trend of the material price going down moving forward.
Chirag Parekh
No, freight also.
Anand Sharma
Freight also, yes.
Harsh Shah
Okay, okay. Sir, in the investor PPT, you mentioned that the losses in United Granite for the first half of this year was somewhere around INR5-odd crores. So if you could quantify what was the loss in the FY24 period since we took over?
Chirag Parekh
No. See, this is the first year of our consolidation. We bought this company in October ’23, okay? So last year, it was a profit and at the operating level, it is in profit. What is lost is at a PBT level because the interest and depression is not getting covered. So if you compare with the last year when we acquired the company, it was in profit because the turnover has gone down, that’s why it has not recovered the entire cost.
Harsh Shah
Sir, even in FY24, since we took over, it was PBT negative or it was PAT profitable?
Chirag Parekh
It was profitable. That’s what I’m saying. When we bought this company, it was profitable. It has a profit at the operating level, as well as the PBT and PAT level. After that, the market was very soft, and that has resulted in decline in the turnover by 20%. That has resulted into the loss at PBT level. At the operational level, it is breakeven as of now.
Harsh Shah
So then you expect by the end of this financial year, this could kind of be PBT breakeven or even be better than that?
Anand Sharma
Yes. So going forward, with the change in the US economy, new setup, I think there’s a lot of momentum expected to come. And we feel that from the next financial year, it should improve and go back to the normal level of previous year.
Chirag Parekh
So I want to just add here, coming to your question. Some new initiatives we have taken, we have kind of substituted better margin products to the US from India, and that has already helped the last month profitability into green. So these — so this initiative of substituting the European products with better gross margin from India going to help the company move forward, which is obviously going to further help to expand once the volume expansion as when the volume expansion happens, the margin expense will also take place.
Harsh Shah
Got it. And lastly, on the amount that we raised in QIP, how much have we kind of utilized for capex till datet? And when can we expect any further capacity addition in — majorly in your sink business?
Anand Sharma
Yeah. So on the capex side, what we did, we made the advance payment for the molds and other things what we wanted to have. So currently, we have used less than INR5 crores around INR4.5 crores on the capex side. Working capital side, we utilized the amount allocated 31.25%. So let’s see, there’s still lying EBIT with our banks with the FD.
Chirag Parekh
I just want to answer your last set of questions on the expansion. So in the last earnings call, I did mention that there were some few deals on the horizon, which is going to get realized, got delayed. We got some final audits happening this month in our company where we looks quite positive. And I think that’s the reason we did go for QIP so that if we have some urgent expansion in our business, we can use this fund. So are we — we are quite optimistic on this or it should be going quite well. And if everything goes good, then I think we are kind of looking at doing some big deals with some big guys. And I think that will — that should take us to use these funds of QIP to further expansion of not just quartz sinks. But overall, all our — the other categories of products will also be able to expand. So I think it all looks good now.
Harsh Shah
So one just related to this. So if say things go positive from here on in terms of the audit.
Chirag Parekh
Right.
Harsh Shah
If you use the QIP money right now, when can the capacity come on stream FY27 or?
Chirag Parekh
So the capacity as far as the infrastructure is concerned, it’s already done. We had already built a million sink capacity, as you know, during this COVID time when we had a great curve. So there is more or less — it is just the — a lot of the other like malls and stations and all which we need to do, which will take about the less than 90 days time for us.
Harsh Shah
So meaning FY26.
Operator
Sorry for interrupting you, sir. May request that you return to the question queue for follow-up question as there are several participants waiting for their turn.
Harsh Shah
Sure, sure. Okay.
Chirag Parekh
Thank you.
Operator
Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is from the line of Udit from YES Securities. Please go ahead.
Udit Gajiwala
Hi, sir. Thank you for taking my question. Sir, firstly, on the growth targets for this year, you had said that it will be around close to $100 million, around INR800 crores. So that entails just a 3% growth on Y-o-Y basis for H2 versus last H2. So do you see any further revision like we can go to INR850 crores kind of run rate for the full year?
Chirag Parekh
So, I would not try to get in actual numbers. I think the company is doing quite well. I think we have taken a number of growth initiatives. If we are quite confident as of now, looking at the growth quarter-on-quarter, we’ll be able to achieve $100 million of sales in the current FY year.
Udit Gajiwala
Okay.
Chirag Parekh
And what is going to happen, like I said, the momentum is good right now. The — our competition, I said in the last earnings call, our — all our competition is in Europe, and they are really struggling with the cost aspect. So we have a lot of opportunities coming ahead. If it does not come in guys, next 60, it will come in the 90 days, but I think we are looking at a good growth trajectory moving forward.
Udit Gajiwala
Sure, sir. And sir, on the gross debt level that has come down from March to this year, have we paid it off anything from the QIP? Because last call, you said that your no funds as the QIP will be used for debt reduction.n from March to this year, have we paid it off anything from the QIP? Because last call you said that no funds of the QIP will be used for debt reduction.
Chirag Parekh
Yeah, I’ll ask my CFO, yeah.
Anand Sharma
So, Usit, see, we have not paid the debt, but there are repayments going on for the debt, which we acquired for acquisition and the capex. So that one is the repayment has happened. We have not taken any further limits. Number two, the QIP fund which is allocated for working capital, that is also deployed. So that has also eased some pressure on the CC limit utilization. So that has resulted into a decrease in the debt level.
Udit Gajiwala
Sure, thank you for clarifying. All the best.
Chirag Parekh
Thank you.
Operator
Thank you. The next question is from the line of Yug Patil from Anand Rathi Institutional Equities. Please go ahead.
Yug Patil
Yeah. Hello, am I audible?
Operator
Yes, you’re audible.
Chirag Parekh
Yes, you are audible.
Yug Patil
Thank you for the opportunity. Sir, my first question is on the employee cost. So if I look at from a year-on-year perspective as a percentage of revenue, it has gone up nearly by 200 basis points, and even in the absolute term, it has gone significantly by 60%. So if you could clarify on why what that has happened? And secondly, if you could guide on volume growth for Quartz sinks, as well as steel sinks for remaining half year?
Chirag Parekh
Sorry,on the volume growth of?
Yug Patil
Quartz sinks as well as Steel Sinks for the remaining half year or might be next fiscal year. Thank you.
Anand Sharma
Sir, can you take [Speech Overlap]
Chirag Parekh
Yeah, I will say it if I think it’s — but I think it’s more on the largely of expansion on our sales team. There is an expansion on our R&D team and our operations team. We are also building new verticals like faucets, built-in appliances. So, a lot of these people have been engaged in to do this. I think so that’s the major cost. Second, obviously, the inflation is high. So the appraisal system has taken place where we have to give back to employ. But this should be all consolidated by next year. It should be all optimized with the sales growth coming in the next quarter. So I think that’s one.
Quarter two, I mean, H2 again, I’m repeating what I’m saying is momentum is good. Right now, we got a healthy order booking position. H2 looks quite positive. It can be. I think now with the change in the air on the US side, we are — the — we’re already seeing a lot of traction, a lot of positive movement. So the H2 — yeah, the H2 looks good. Like I said, and if things would play out well, I think it can also be better than the H1.
Yug Patil
Could you quantify on number terms like in the range of 10% to 12%.
Chirag Parekh
No, see, there’s no question on to do exact number. Like I already said that we are looking going at a run rate of $100 million for the current year. So that’s how — that’s what we are quite optimistic positive to achieve that.
Yug Patil
Okay. And what has been the remaining capex for this year?
Chirag Parekh
Remaining — Anand, what is the remaining capex we plan to do? Because that is, again, based on what the deal is — what happens in the next 30 days, 60 days, right?
Anand Sharma
So this year, we have planned capex of INR35 crores to INR40 crores. Already, we had a capex of INR20 crores and another INR15 crores, INR20crores, will come in second half as of now.
Yug Patil
That answers my question, sir. Thank you. I will come in the queue for follow-up.
Anand Sharma
Thank you.
Operator
Thank you. The next question is from the line of Abhilasha from Quantum AMC. Please go ahead.
Abhilasha Satale
Thank you for taking my question. So first one is on the working capital. So it — so working capital looks elevated in this H1. So almost like we have added INR100 crores to savings and the sharp increase of around INR90 crores in the working capital. So what is happening on that front? Inventory levels have gone up. So what is the outlook on that? And secondly, if you can clarify more on the QIP deployment because how much is we will be utilizing for the organic growth and how much for the inorganic growth, if you can throw some light on that? Thanks.
Chirag Parekh
Yeah, Anand, do you want to take this question?
Anand Sharma
Yes, yes.
Chirag Parekh
So — because we are in anyway not going to use any QIP for any inorganic growth, right? Yeah.
Anand Sharma
Right, sir. So on inventory side, this quarter, we built up the stock in the traded goods primarily because there was a BIS certification issues and we don’t want to have a situation where we are stock out. So we have decided to build additional stock on the appliances side. We have also started our functioning for appliances manufacturing. So on the production side, also, we have some bought order items, number one. Number two, there are certain containers which supposed to go on the September end, which spill over to the next week. So this too has increased the inventory level, number one. Number two, on the QIP side, we have no plan to utilize on the economic side. As of now, our fund is deployed primarily for the working capital and certain capex, and it is as per the object what we stated in the offer document.
Abhilasha Satale
Okay. And so, again, on the working capital, so by when do we expect this inventory level to normalize?
Anand Sharma
So I think you can see that normalization happening from the next quarter itself because this is a purposely stock we built up. We don’t want to have a situation where we not get the material and the BI certification was going on. Since the company has already received the BI certification, so we’re going to utilize these inventories and the normalization will start happening from the quarter three onwards.
Abhilasha Satale
Okay. And sir, then last one is by when do we expect this QIP many to get utilized? So, say, working capital, we have already deployed some. So do we intend to depress further on working capital and how much on the capex?
Anand Sharma
So 50% of the fund is earmarked for the capex. And for that, we have already given that it will be utilized by end of FY26. So we have sufficient time to make the plan. Normally, we do our bursting in the month of Jan and Feb, and then we decide the action plan for the capex for next financial year. So this is — we have already stated and it will be utilized by FY26 on the capex side. Working capital, we have already deployed. There are other corporate purposes also, which we will utilize as and when it comes. But in all probability, it will go as per the schedule specified.
Abhilasha Satale
Sure. Thank you.
Anand Sharma
Thank you.
Operator
Thank you. The next question is from the line of Akash Shah from UTI. Please go ahead. Please go ahead, sir. Your line has been unmuted.
Chirag Parekh
We are not able to hear him. Yeah.
Operator
As there is no response from this participant, we will move to our next question. The next question is from the line of Rohit Singh from Nvest Analytics Advisory LLP. Please go ahead.
Rohit Singh
Hello, am I audible?
Chirag Parekh
Yes, you’re audible.
Rohit Singh
Sir, two quarters back we talked about Kaelo. So what are the ongoing developments in this regard? And what kind of opportunities are you seeing in this area, particularly as of now?
Chirag Parekh
I’m sorry, can you speak a bit slow, I’m really not — I’m finding very difficult to understand, please.
Rohit Singh
Hello. Am I audible, sir?
Chirag Parekh
Yeah, you’re audible, but can you speak a bit slow, please?
Rohit Singh
Yeah, yeah. Sir, a few quarters back we were talking about like having partnership with bottle-cooling technology company, Kaelo, right? So like you mentioned, it’s a new startup for wine chiller bucket. So what are the ongoing developments in this regard, sir?
Chirag Parekh
No, I don’t — Anand, do you understood? Sorry, I’m not — I’m finding very difficult to understand this question.
Anand Sharma
Sir, he is talking about some partnerships on the wine chiller side. I also don’t know this partnership, the name mentioned.
Chirag Parekh
No. So we have not entered to any partnership with Kaelo or something.
Rohit Singh
I think some discussions were happening. The brand name was familiar, you were saying few quarters back.
Chirag Parekh
Sommeliers was, yes. Sommeliers agree. So Sommeliers is the wine chiller, which is — so our wine — we’re not able to give exact numbers, but we are happy to share the numbers with you. But right now, we have a tremendous movement with the wine chiller category. We also sponsored the — one of the biggest wine shows in India. Last one, this is Sonal Holland. And we had launched this Sommeliers into that. I think that’s going on very well. If I’m not mistaken, I don’t want to quote, but our — we are expecting the wine category, towards including the wine chillers to have a good multiple-fold growth in the next year.
Rohit Singh
Have you started generating any revenues seen here?
Chirag Parekh
We are — we have launched it. We are expecting the first shipment to come in within the next 60 days. So it should be realized in the next financial year.
Rohit Singh
Perfect, sir. That’s all from my side, sir. All the best
Chirag Parekh
Thank you.
Operator
Thank you. The next question is from the line of Resha Mehta from GreenEdge Wealth. Please go ahead.
Resha Mehta
Yeah, thank you. So first is just a clarification. So when you say the standalone margins, the gross margins have declined essentially due to the inferior product mix and the raw material inflation seen, especially in acrylic, right? So here, if you could just clarify that, what was this inferior product mix exactly? If you could just talk about that? And also this acrylic is what percentage of our total RM?
Chirag Parekh
Yeah. So Anand, I’ll just take this and details, you can do it. So thank you for your question. Regarding this — the product mix, the US, the price value realization per se is about — roughly about 10% to 20% higher than any other average product because of the size of a sink is 33 inches by 22 inches versus others that comes to about 20 inches by 24 inches. So you obviously get a higher value realization. The economy was quite muted to higher inflation and interest rates in the last quarters, which now will turn around. So I think that’s one part of it. On this acrylic side, it is — the sink it contains about anywhere about 20% to 25% on the weight — as far as the weight is concerned. As far as the material concerns, it approximately contributes to about 50% of the total sink cost.
Resha Mehta
So in terms of value terms, this acrylic would be what percentage?
Chirag Parekh
It, again, varies from a sink to sink. But hypothetically, if the sink RM cost is INR2,000, then acrylic would be INR1,000.
Resha Mehta
Got it. Got it. And then in the Quartz volume growth in this quarter was just 7%. It’s probably the lowest in the last one year. So any specific reasons apart from the general macro slowdown that you would want to attribute this year?
Chirag Parekh
No. So guys, I think it’s — I absolutely believe that — and you guys know much better than what I do, macros about what’s happening in the Indian economy and the global economy. I think our company has done fairly well. to be honest. The 7% growth, even at the beginning of the quarter, we were like even saying that whether we’ll get this growth or not. But I think we have got this growth and thanks to the confidence with the new customers like IKEA has shown a good increase — sharp increase with us in the sales, even the next coming quarters, we have a healthy order booking position.
The competition on the European side, the cost is getting expensive. So we are expecting some good traction in our business. So I do understand that percentage-wise, it looks small, but we have to understand what’s the world right now is what challenges. So I won’t like to particularly make a point here. The home improvement sector is probably the worst-performing sector right now because of the high inflation costs and the high-interest costs, right? And in spite of this, our company has been able to post some great growth and able to sustain the margins. So when this scenario, I think everybody is expecting to change from the next year because of the change of the helm in the US. So I believe that moving forward, I think we should be looking at double-digit growth now moving forward.
Anand Sharma
Sir, just to add the question. On the quarter-to-quarter, Y-o-Y basis 12% growth, if we look at H1 this year versus last year, growth is 50%. So last year, H1, we had 253,000 sinks — Granite sink sales and this year, we have 315,000. So 50% growth we have achieved on H1 to H1 basis.
Resha Mehta
No, no, that’s right. But the H2 of last year, which is the H2 of FY24, had a high raise of around 1.5 lakh sinks, right? So my question was more towards — so in H2 in terms of volume growth [Speech Overlap] challenged?
Chirag Parekh
No, so Resha to answer your question, I think we won proven the worst. I think we are kind of looking at a great year, ’25, ’26, Things are going to dramatically change. It was all depending upon US election. And we need to understand that before the US election, you have seen all the world gets muted. So I think we are — yeah, I think you’ll see the demand, the overall stable in the world happening beginning of the ’25, ’26.
Resha Mehta
Sure, sure. And last question on the BIS front, right? So we’ve been talking about the BIS benefits that may come to our appliances category. So can you just elaborate on this one when by — when is BIS is expected to be implemented? And how exactly are we positioned to benefit from this?
Chirag Parekh
BIS is going to be effective from January 1st. And one of the gentlemen asked question, why your working capital is high because we had to really stock for the next three months to four months. It takes time for us to build this. But it’s — but it’s a great — I think it’s going to be a blessing for us. So we’re already building this new kitchen hoods. This was relatively for kitchen hoods, especially for the glass, what we import. And we are also now building a new division for the Hobs, too.
So I think coming January, you’ll see a lot of competition, especially the unorganized sector getting wiped off, right? So any company which is going to be able to manufacture great quality products would be able to exceed in technology capabilities has gone. And I think we are probably one of those companies who always believe in high-quality goods. So I think we are very confident moving forward that this restriction is going to help us to kind of scrap out all this non-quality guys and then giving us an opportunity to enter the Indian market.
Resha Mehta
And just a follow-up here, lastly, that — so why would you say that the regional players will get wiped off? Because hoods and hobs essentially local manufacturing is pretty established here, right, in India? Or is that understanding not correct?
Chirag Parekh
No, the understanding is not correct on the kitchen hoods because there are very, very few companies who are doing this kitchen hoods, and whatever the kitchen hoods you are importing that down from the Chinese importers right? So people import from the Chinese importers and sell it in India. Now this you’re not able to import it. So all the local small, small TAM companies and vendors who are importing from China, you’ll have to stop that.
Resha Mehta
Right, right. Got it. That really helps. Thank you so much and all the best.
Chirag Parekh
Thank you.
Operator
Thank you. The next question is from the line of Vaidik from Monarch Networth Capital Limited. Please go ahead.
Vaidik Bafna
Congratulations, sir, on a good set of numbers. I have two questions. Firstly, sir, on the stainless side, since we have reached 90% capacity utilization. So is there any plan to further expand capacity over year for FY26 or ’27?
Chirag Parekh
Yeah. So — yeah, so the company is already looking for a new place right now to expand the capacities. We are also putting a new investment in the PVD machine because there’s a lot of traction coming into that business. We are also starting the third shift in the stainless steel, which we’re not doing until now. So the — we will have to take a lot of new initiatives now moving forward to expand the stainless steel capacity.
Vaidik Bafna
Okay. So sir, any plans by how much are we going to expand?
Chirag Parekh
Yeah. So I think we are just kind of putting our plan together because we’re having some kind of a discussion, which is going to kind of going to display our growth trajectory. But I think we are looking at least 200,000 sinks for next year. Anywhere 200,000 to 250,000 sinks capacity in FY25, ’26.
Vaidik Bafna
So sir, how much capex would be required for this?
Chirag Parekh
I think it should be roughly around, — if we are not — so minus land building, I think, would be about INR10 crores, right? Anand, that would be probably another INR10 crores, so maybe INR20 crores, yeah.
Vaidik Bafna
So INR20 crores is inclusive of land.
Chirag Parekh
Yes.
Vaidik Bafna
Okay, sir. And sir, in this quarter, our realization for stainless sink was down by around 12-odd percent. So any major reason is it a product mix or what?
Chirag Parekh
Anand you want to check this.
Anand Sharma
So yeah. So realization is because of currently as already explained about the US sales is down and other territories were up. So that’s why the product may ASP has gone down by some marginal INR30, INR40 per piece.
Chirag Parekh
He’s asking on the stainless steel sinks side?
Vaidik Bafna
Stainless sink.
Anand Sharma
Sorry, stainless steel sink, again from 4,275 to 4090 because of the mix of the product mix. It’s the only [Speech Overlap]
Chirag Parekh
The only thing I see [Speech Overlap] the exports have gone up. The exports have gone up is because we have more pressing in getting sold on the export market.
Vaidik Bafna
Yeah. More press things Okay. Okay, sir. And sir, can you give us any guidance in terms of revenue for FY26 and ’27?
Chirag Parekh
So I think if we are expecting the world to be moving forward, and I think it looks quite positive to be stable. We kind of expect the inflation to slow down. We expect the interest rates to get cut, the tax reduction, especially with now the new elect President in United States and what the opportunity is, especially coming in on these big deals, which we’re expecting some audits happening this month, I think we can — I think we are quite positive that we can achieve a 15% to 20% growth next year.
Vaidik Bafna
15% to 20% growth for next year. And sir for this year, where do you see your revenues going to be reached around INR410 crores on a consolidated basis? So can we close around INR900 crores of revenue for this year?
Chirag Parekh
So I believe that we are showing some good performance quarter-on-quarter. So I think we are quite positive. Moving forward, it’s going to grow. It could be 100 — we’re quite positive about $100 million. If the things go really in our favor, it can go a bit of $100 plus. So it’s very hard for us to give you what’s up, but I think we are quite confident on doing $100 million sales on the — with the end of the year.
Vaidik Bafna
Okay, sir. And sir, lastly, on the margin front, what would be our stable EBITDA margins for FY26 and ’27? Do we see any margin improvement for the next two years, maybe by 100 bps or 200 bps?
Chirag Parekh
Yeah. So I think our margin guidance has always been around 20%, 21%, it’s gone 22%. And I think the company, the endeavor is always to improve the margins. Anything which is going to happen now in terms of decreasing the material cost, freight cost, product mix in the US is only going to help us to increase our margin from here. So what do you see this — the margin EBITDA dropping to below 20%, I think our company is going to make all efforts to cross that 20% next year.
Vaidik Bafna
Okay, sir. That’s it from my side.
Chirag Parekh
Thank you.
Operator
Thank you. The next question is from the line of Vaibhav from Nippon AIF. Please go ahead.
Vaibhav Saboo
Hi, sir. Thank you for taking my question. Just you said, one accounting question and just trying to find out the numbers. So on Slide number 6, you have given product-wise revenue and Slide 8 provides overseas operations performance for Peripheral Surfaces and United Granite LLC. So can we safely say that the 30.8% surfaces is basically comprised of the revenues from these two entities?
Chirag Parekh
Anand, do you want to answer, I’m not.
Anand Sharma
Yeah. So you’re talking about the product-wise revenue. So 30.8% includes our UK subsidiary, Carysil Subsidy limied and sales from United Granite LLC. So this putting together is 30.8% as of now for the H1.
Vaibhav Saboo
Okay. So just in these two subsidiaries, it’s only surfaces right now, right?
Anand Sharma
But it’s both the subsidiary, UK subsidiary and US subsidiary putting [Speech Overlap]
Vaibhav Saboo
So I’m talking about Carysil Surfaces Plus and United Granite LLC. Are we selling the only surfaces or are we selling something else also?
Chirag Parekh
No, only it’s only surfaces.
Anand Sharma
Only surfaces
Vaibhav Saboo
Okay, understood. Sure. Yeah, that’s it from my end.
Anand Sharma
Thank you.
Chirag Parekh
Telling and fabricating. Yeah.
Operator
Thank you. The next question is from the line of Shraddha Kapadia from Share India. Please go ahead.
Shraddha Kapadia
Hello, am I audible?
Chirag Parekh
Yes. You’re audible.
Shraddha Kapadia
Thank you so much for the opportunity. Sir, I just had one question. If you could elaborate on the tie-up with the electronic stores in India and how would it help in our domestic growth, if you could provide a brief numbers or brief details about the same?
Chirag Parekh
Yeah. So we did a tie-up recently with the — in Kerala, the share so-called Nixon electronics and we go into this some mart, I forget the G-Mart or something into that. So I think that is going to be the first our entry foray into the electronics. So Carysil, which is a predominantly a kitchen sink player now entering to the electronic stores. It’s been — we are just starting now. So we will kind of know the momentum by end of quarter three or quarter four. But I think where we see the way we see the scope of the dramatic improvement in the appliances since the modern trade in the electronic trade comprises more than 70% of the sales, I think what our endeavor was to double our appliance sale will help us to take this moving forward.
Shraddha Kapadia
. Thank you so much for the opportunity. That was it from my side.
Chirag Parekh
Thank you.
Operator
Thank you. The next question is from the line of Akash Shah from UTI. Please go ahead.
Akash Shah
Yeah. Hi, am I audible?
Chirag Parekh
Yes.
Akash Shah
Hi, sir. Thank you for the opportunity once again. Sorry for inconvenience earlier. So, sir, just wanted to ask if the deal that we are working on right now goes through, then by when can we expect the — I mean, expansion in capacity. I mean, would it be done by, let’s say, first half of FY26? Or would it be, let’s say, by second half — I mean, by FY26 end?
Chirag Parekh
So this audit is the last — just like the last nail and cough, right? So it’s the last thing which what we got. A lot of things have already happened since last year. So this is just a formality which has to be done. So it is going to be starting as high. We have already started building our capacities. The further more capacities, what we need to build, we’ll see after this. But everything is going to start happening from quarter as, if not quarter four, then by quarter one.
Akash Shah
Okay.
Chirag Parekh
So it’s going to be pretty fast. It’s going to be pretty, pretty fast, yeah.
Akash Shah
Right. Sure. Sir, also, just wanted to ask, are we looking for any inorganic opportunity also? Or right now, we are focusing on, I mean, existing business.
Chirag Parekh
We are absolutely going to focus on existing businesses.
Akash Shah
Yeah. Okay. Sure, sir. Thank you. Thank you so much for your responses. Thank you so much.
Chirag Parekh
Absolutely. Thank you.
Operator
Thank you. As that was the last question, I would now like to hand the conference over to management for closing comments.
Chirag Parekh
Thank you, everyone. I hope we’ve been able to answer all your questions satisfactorily. However, if you need further clarification or want to know more about the company, please get in touch with SGA team, Investor Relations Advisors. Thank you and have a great day.
Anand Sharma
Thank you.
Operator
[Operator Closing Remarks]