ET Intelligence Group: The stock of Acrysil, which manufactures home improvement products, has caught traders’ attention after it announced a strategic partnership with Swedish home furnishing company IKEA Group to supply quartz sink. The company’s stock hit upper circuit intraday in Monday’s trading session as the order from IKEA Group provides incremental source of revenues.
Chirag Parekh, managing director at Acrysil said that the company will be among the top three suppliers of the quartz sink for IKEA in the world and it is an endorsement of the company’s ability to provide high quality material at a competitive price. The company did not furnish details about the size of order from IKEA due to a non-agreement clause. Supply to IKEA will start from the third quarter of the current fiscal. The company derives 73% of its total revenues from quartz sink followed by 16% from steel sinks segment and the remaining from appliances segment.
The company’s revenue grew 17.2% annually to Rs 276 crore between FY14 and FY20, according to the company’s presentation. “The order of IKEA will support us to maintain our sustainable revenue growth and help to maintain our margin profile” added Parekh. The company’s exports account 83% of its total revenues and the balance revenues come from domestic markets. Its revenue from exports’ market dropped 16.9% in the first quarter of FY21. In the same period, its revenues from domestic market dropped by 65%.
Acrysil is the largest producer of the quartz sink in India and Asia region. It has two plants which manufactured five lakh quartz sinks per annum at the end of FY20. In order to cater to the demand from the Swedish furniture giant and underlying demand from the overseas market, the company plans to expand its quartz sinks’ capacity by 20-25%.
Among well-known investors who are invested in the company, Ashish Kacholia and Varun Daga of Girik Capital hold 4.14% and 2.65% stake respectively.