Carysil Q2 Results Review - Steady Show, Demand To Accelerate From Hereon; Reaffirm 'Buy': Yes Securities

Yes Securities Report

We remain confident on Carysil Ltd.’s growth owing to improvement in U.S. and Europe business and company expanding its presence in newer geographies. Moreover, with on-boarding of new clients and a higher share from existing customers will boost overall topline.

Also, newer capacities across segments will enable the company to cater the growing demand. On consolidated basis we expect top-line to grow by 19% compound annual growth rate over FY24-FY27E to Rs 11.58 billion and operating margins should remain at 18.4% in FY27E. Hence, Ebitda is likely to grow by 18% CAGR over FY24-FY27E.

With the reduction in debt, we expect PAT to grow faster at 26% CAGR over similar period. At current market price, the stock trades at P/E(x) of 24.3x/19.6x on FY26E/FY27E EPS of Rs 33.4/41.4 respectively.

We continue to value the company at P/E(x) of 25x on FY27E EPS, arriving at a target price of Rs 1,035 (adjusted for revised share capital). Hence, we reaffirm our Buy rating on the stock.

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