Carysil's low cost offerings along with marquee clientele puts it in an enviable position. Can it capitalize or will the weight of global acquisitions will slow it down? We analyze
Difficult to assess market share. Though optically the company seems to be gaining market share albeit slower than earlier.
One big problem is size of the company, in the world of IKEA's and Grohe's , Carysil with 800 crores of revenue isn't going to get very high selling SKU's until it reaches a particular size.
Quartz sink has 4-5 players. All European except Carysil. Market size is 6-7mn sinks. With the kind of price difference with its competitors it should have gain share quickly. Carysil is already at a size in quartz. It has a 1mn capacity.
overall the business as well as company seems good but the only concern is dependency on selected 2-3 clients.(Ecom Express is the current biggest example of single client concentration)
Is there any information about how much % is from top 3 clients & overall what do you think is good valuation level for contract manufacturing business.
Difficult to assess market share. Though optically the company seems to be gaining market share albeit slower than earlier.
One big problem is size of the company, in the world of IKEA's and Grohe's , Carysil with 800 crores of revenue isn't going to get very high selling SKU's until it reaches a particular size.
Also, the execution has been patchy at time.
These are broadly 2 main reasons
Quartz sink has 4-5 players. All European except Carysil. Market size is 6-7mn sinks. With the kind of price difference with its competitors it should have gain share quickly. Carysil is already at a size in quartz. It has a 1mn capacity.
Cost isn't the only factor.
Balance-sheet strength is weaker, size is smaller.
Reliability of product may not be as high as European peers. Europeans are closer to the customer..
Trust builds up over time. If carysil does everything well market share will come and vice versa
They are selling to top companies Grohe, IKEA and likes. Why would these companies buy products which are not reliable?
With regards to Balance Sheet they have raised and can easily raise further capital.
There are plenty of reasons why it could be
Supplier diversification, cost control, lower priced products.
I am not alluding that these are the reasons, but probable reasons why the growth hasn't been faster.
Look at the historical debt on books and promoter stake for such a small company. You'll get your answer.
overall the business as well as company seems good but the only concern is dependency on selected 2-3 clients.(Ecom Express is the current biggest example of single client concentration)
That's the risk for most contract manufacturing companies. You have to adjust it in growth or valuations.
Is there any information about how much % is from top 3 clients & overall what do you think is good valuation level for contract manufacturing business.
Valuation is subjective. I wouldn't comment on it.
Top 3 clients would be 40 percent of revenues (+/-5 percent)
It's market share not rising rapidly although it's low cost by a mile. Why would that be?