Time To Book Profit

Acrysil formed a part of our recommendations in the Low Priced Scrip column in Issue 21 dated September 28 - October 11, 2009. The scrip was recommended at a price of Rs 82.25 with a one-year target price of Rs 109. Acrysil is a manufacturer of kitchen sinks out of quartz and granite and sells them under the brand name ‘Carysil’. About 90 per cent of its total sales is derived from exports while the balance 10 per cent is from domestic sales. When we came across this company, which has been growing at a four-year CAGR of 42 per cent in its topline and 128 per cent in its bottomline, has a high dividend yield of 5 per cent, is available at a PE of just 3.6x and with EV/EBDITA of 3x, there was no other option but to recommend it.

And that’s what we did as we believed that it would catch the investing community’s fancy soon enough and end up giving better returns over a long-term period. In fact, post our recommendation the scrip has performed much better than our expectations with an overall appreciation of 69 per cent, while at its CMP of Rs 127, the appreciation stands at 54.4 per cent. This is quite an increase considering the fact that the Sensex during the same period has only shot up by a mere 4 per cent. Thus this indicates the outperformance of the scrip as compared to the broader markets.