Carysil Limited (524091) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Carysil Limited Q3 and 9 Months FY '26 Earnings Conference Call hosted by Go India Advisors LLP. This conference call may contain some forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Chirag for his opening remarks. Thank you, and over to you, sir.

Thank you. I think probably I can be on mute, so I have a lot of background noise. Thank you. Good evening, ladies and gentlemen. Thank you for joining us for the Carysil Limited Quarter 3 and 9 monthly FY '26 Earnings Conference Call. I trust you have an opportunity to review our financial results and investor presentation, both available on the company's website and on stock exchanges. Joining me on this call is Mr. Anand Sharma, Executive Director and Group CFO, and GIA, our Investor Relations Advisers, Global and Indian economy. Under the leadership of our honorable Prime Minister, Shri Narendra Bhai Modi, India has finally struck the free trade agreement with U.K., Australia, UAE, Oman and mother of all trade deals for this year with EU. The development is expected to provide strong momentum to businesses and open new horizons in the export market. Finally, the news happened a few days back. We're happy to announce the bilateral trade tariff between India and U.S. agreed for the tariff at 18% from the place of existing 50%. This is a significant development for the country and the potential to grow our export further and enhance our competitiveness in the U.S. market. The positive developments, along with our strong product portfolio and operational excellence energizes us as a company and reinforces the confidence and the resilience of Carysil's global business. The IMF's latest reports indicate India is projected to contribute nearly 70% to the global real GDP growth, second only to China. India GDP growth for 2025 is projected at 6.7%, positioning it as the fastest-growing major economy. Building on these foundations, we continue to focus on the key pillars that have guided Carysil growth over the past 3 decades. Number one, well-equipped manufacturing facilities have supported steady growth over the years. Long-standing trust-based relations with customers, partners worldwide remain a key driver to our success, focusing on quality, design, reliability to meet global standards and deliver superior products. Fourth, a strategic vision anchored is resilient innovation, enabling us to adapt to global challenges while creating sustainable value of our stakeholders. As global markets evolve amid shifting trade dynamics and supply chain changes, these trends help us to navigate complexity with clarity. They also give us the confidence to continue building the Carysil brand across key markets and to explore opportunities even amid challenges. Business performance and growth highlights. The third quarter FY '26 was quite decent, especially in the context of the prevailing global headwinds and tariff-related challenges, especially with the U.S. With the conclusion of the free trade agreement with major economies and more recently, the positive news around the U.S. trade deal, we expect the overall business environment to improve. To navigate the earlier tariff impact, the company had extended additional discount to our key U.S. customers. With the reduction in tariffs, which is the immediate effect under the new trade agreement, we plan to roll back the incremental discounts with immediate effect. Further, with the expected signing of the EU trade deal, we foresee significant growth opportunities in and around European markets. Kitchen sink, quartz granite sink business. Sales volume of the quartz granite kitchen sinks have been strong and incremental investments in moulds have been made to meet the demand in India and worldwide. During the Q3 FY '26, our sales increased by 27% as compared to Q3 FY '25. We expect an additional capacity, which we had announced earlier to become operational by the quarter 1 April 2026.This has been a bit delayed since we were waiting for the U.S. news. Stainless Steel Business. Sales volume of the steel sinks has increased by 23% in Q3 FY '26 compared to Q3 '25. Capacity expansion is underway and the increased capacity in stainless steel sinks from 180,000 to 250,000 by April 2026. Considering the demand from our global customers and OEM opportunities in India, the company had acquired land adjacent to the factory and planned capital expenditure to enhance the manufacturing in line and part of its diversified growth strategy. Built-in Appliances. We are strengthening our manufacturing capacity in appliances. In Phase 1, we commenced assembly term manufacturing of the kitchen hoods, chimneys with an activated capacity of 50,000 units. In second phase, we are starting assembling extended line of manufacturing into hobs, ovens, food waste disposers, et cetera, scaling the overall capacity to 100,000 units per annum. The expansion, this will position us to scale operations in line with the demand. We are receiving good interest and inquiries from the established OEM opportunities in appliances, which is going to be significant due to the BIS certification putting investing state-of-the-art technology for the built-in appliances, including glass cutting, forming and coating of the glasses. For the Faucets, we have commenced assembly and manufacturing of kitchen faucets with initial capacity of 50,000 faucets per annum, and we are in the process of expanding 100,000 pieces per annum, guided by a vision to enable that we want that every kitchen faucet of Carysil should be portable for drinking by integrating an advanced filtration technology with most of our faucet offering. We will be manufacturing two types of faucets, Stainless Steel faucets and the Brass Chrome faucets. The Stainless Steel faucets will be completely lead-free and which matches the new standard for exports in the United States and EU. We'll be receiving several major inquiries from the large bathroom and kitchen brands across the world, and the orders have also started flowing in for the faucets for export market. We see a significant volume in terms of faucet because everything needs a faucet. The use of the PVD technology further will enhance the aesthetic durability and validation of the existing due to the ongoing demand of the PVD faucets, the company decided to order another machine of the PVD for faucets. The necessary certification are in the process for the U.K., European and the U.S. market. We will optimize our sales channels while increasing our overall value addition. Coming to export business. Our export business with the key customers in the United States, Europe and across the world have been substantially during the quarter and is expected to further improve with the ongoing manufacturing capacity expansion and demand. UK market remained relatively soft due to ongoing economic challenges and the fundamentals of our business still remain very strong. To strengthen our brand presence, we are launching Carysil branded sinks and built-in appliances through experience centers, which is coming up in Manchester, exclusive Carysil showroom. New and emerging markets are becoming more important and meaningful to contributing to the growth, especially the Middle East. Follow the response of the first experience center, we opened a second experience center in Muscat. In January '26, the third one is coming in Sharjah, Dubai Main Highway, approximately 3,000 to 4,000 square feet showroom, and we plan to open another one in March 2026. We are spreading our sales network across Middle East and the Gulf, Qatar, Saudi Arabia, Bahrain, et cetera, while other targeting some key European markets like Romania, Morocco, Egypt and Bulgaria. We are strengthening our presence in other markets in Australia, New Zealand, Canada and South Africa with the Carysil brand and adding bathroom products and the kitchen built-in appliances. We had a very strong and a successful business model in UAE with our brand and company plans to replicate the same model across the world with the Carysil brand. Indian business. India continues to be an important growth pillar of the company, like we said in the last investor call. Our domestic business registered growth of 30% in Q3 as compared to Q3 FY '25. Our OEM India business is progressing well with the leading players such as Kohler, Häfele, et cetera, sourcing now stainless steel sinks from our company and has further plans to add a lot of new products. Capacity expansion in stainless steel, appliances faucet put us in a meet growing domestic and export demand. Strengthening online presence and upcoming experience center will deepen consumer engagement and enhance visibility. We are also strengthening our e-com and our sales distribution significantly to further enhance our presence in the Indian market. Online business. We see a massive potential of the online business and part of our endeavor to have a story of INR 500 crores of India in the next five years. It's important when we start focusing on the online business, which is the fastest-growing business. We have strengthened our team. We recruited new people to expand our online presence. We're also launching the Carysil bathroom brand to a D2C model, expanding experience centers across India and build a scalable growth platform. Carysil plans to host its first international Carysil Summit, Carysil 2.0 at the Grand Hyatt Mumbai on the 4th April 2026, where we're going to showcase the vision of the new Carysil 2.0, who are investors, stakeholders, channel partners and customers. Our vision is to build India's largest integrated kitchen hub. With that, I would like to hand over the call to Mr. Anand Sharma, our Executive Director and Group CFO, who will take you through the financial performance in more detail. Over to you, Anand.

Thank you, sir. Good evening, everyone. Let me take you through the company consolidated financial performance. Q3 FY '26 performance. Consolidated total income stood at INR 225.2 crores for Q3 FY '26 as compared to INR 207.4 crores of Q3 FY '25, growth of 8.6%. EBITDA for Q3 FY '26 stood at INR 43.7 crores as compared to INR 33.1 crores of Q3 FY '25, growth of 31.9%. EBITDA margin for Q3 FY '26 stood at 19.4%. Profit after tax and minority interest stood at INR 21.3 crores in Q3 FY '26 as against INR 12.5 crores of Q3 FY '25, growth of 69.7%. Sales volume for quartz sink stood at 199, 123 units, stainless steel stood at 36,974 units. Kitchen appliances and others stood at 15,620 units in Q3 FY '26. Coming to nine-month FY '26 performance. Consolidated total income stood at INR 698.7 crores for nine-month FY '26 as compared to INR 618.9 crores in nine-month FY '25, growth of 12.9%. EBITDA of the company for nine months FY '26 stood at INR 139.5 crores as compared to INR 109.9 crores in nine-month FY '25, growth of 26.9%. EBITDA margin for nine months FY '26 stood at 20% as compared to 17.8% in last year nine months FY '25. Profit after tax and minority interest stood at INR 71.6 crores in nine-month FY '26 as compared to INR 45.5 crores in nine-month FY '25 growth of 57.3%. Gross debt stood at INR 228 crores as on 31st December 2025. Cash and bank balance stood at INR 11.4 crores. Total CapEx for nine-month period FY '26 stood at INR 44.6 crores, which includes plant and machinery, buildings, moulds and other equipment. Thank you. Now I open the floor for question and answer. Over to you, operator.

[Operator Instructions] We take the first question from the line of Sagar Jethwani from PhillipCapital PMS.

Congratulations on a good Q3. So due to the favorable tariff rates now, what will be our pricing strategy in the U.S. market? Will we be rolling back the discounts in a calibrated way? In which case, when can the full rollback be effective from? So that's my first question.

All right. So yes, like I said, the rollback is happening on a pro rata basis with the immediate effect. I mean 50% tariff is still about 18%, right? So according, so post pro rata to that, the rollback is already, we have already informed all our customers. It will be with immediate effect.

Yes. Good to know that. And I can see the sharp realization drop in the cost, of course, for the obvious reason. Just wanted to understand what was the discounting on the, effective discounting on the products to combat the high tariff rate in Q3?

Yes. It's, I mean, I can just tell you a range approximately, it was, I think, between 50% to 20%.

For the entire basket of products you're saying?

US business.

Third is that a couple of stores in Mumbai, we had seen a closure. I'm not sure it's a closure. Are these stores getting relocated? Can you comment on that, please?

Bombay is all this coastal highway coming in. Now I think we have done our purpose. Everybody knows there was no footfall happening. Mall is now kind of run down if you're talking about Atria mall. So we have one in Andheri now, but we are opening new ones now towards the new Bombay. And also in South Bombay, we are looking at around the Mahalaxmi mill side.

Yes. And lastly, this non-U.S. market IKEA sales, can you comment how is it progressing?

Like I said, I think overall, across Europe, we see a good increase. I would say, some of the areas, there's a sharp increase. IKEA per se is doing exceptionally well. We had some probably the highest sales last month, IKEA. So I think it's doing pretty well. They like our things. We invested in new moulds. We've been investing as we announced last time, we have about close to 70%, 80% of the IKEA's global business.

Would you be able to please quantify the volume number, if so, for non-U.S. market IKEA?

Yes. So because of the agreements with them, we cannot just openly announce what numbers we do with them. But I think you can contact our Investor Relations. They will provide you as much as information we can to you.

Our next question is from the line of Avijit Sheet from SBICAP Securities.

Sir, I just want to understand, in the last quarter, you mentioned that you want to enter into the hard surfaces in the U.K. business. So sir, any progress on that?

Sorry, I'm not able to understand what you said. Sorry. you said last time I said.

Sir, your guidance on entering into the hard surfaces for the U.K. business. So any progress on that part?

The fabrication business first prototype is coming up by April. When we are doing the expo, the 2.0 Summit, we would like, we are going to display this new fabrication business in that export. So, it is going to come as fast as in quarter 1.

Sir, any guidance on the borrowing part for FY '27 and FY '28.

Yes, I'll just hand over my CFO. Anand, you want to come in?

Yes. So on the borrowing side, if you look at our debt, we actually reduced the debt from March from INR 253 crores to current INR 228 crores. So we don't have any plan as such on the borrowing on the CapEx side. Maybe for the growth, we will have some borrowing on the working capital. Overall, we are going to keep the range.

We don't want to borrow. We don't want to borrow. So I think we are having a budget meeting in March, by I think 3 March, so we can provide you with some information after we do our Board meeting on budget for the next financial year.

Understood, sir. Sir, on the kitchen appliances part, sir, how much is the mix in terms of domestic and international revenue mix?

No, no. Right now, we are doing all 100% Indian business.

100% international.

Right now, whatever the appliances business we are assembling, manufacturing or trading in India is 100% it is India. The UAE and the Gulf market is one peculiar case where we are now doing appliances about 80% to 90% is appliances sales. For example, we were targeting, I think, we did INR 10 crores, INR 20 crores. So targeting INR 30 crores next year, for example, where the 80% will be the built-in appliances business of Carysil.

Our next question is from the line of Pritesh from Lucky Investments.

Just trying to correlate the presentation. So just wanted to check United Granite LLC. So that arm of the business is basically the surfaces portion of the business in U.S. or it's something else? I'm just trying to correlate with the bar chart, which is put ahead of that pie chart.

No, it is 100% surfaces fabrication business.

100 surfaces, okay?

I mean, it could be, I would not quote 100%, 100%, could be 5%, could be sinks and faucets and some other things. So but it is majority is surfaces fabrication.

So then when it comes to surfaces, it's Carysil surfaces and United Granite, right? These are the 2 subsidiaries which will do the surface business.

So then, Ethanol you're getting into India.

Okay. Can you a little bit highlight the growth rate there in these 2 portions of the businesses, the surface as a whole? And what are the near-term demand trends basically?

Yes. So I think one big change in profits, and I think we probably would have an investor or probably Anand can Pritesh, let you know later. But one big thing change we are doing is we, the Mantra is cut less, make more. So we are now cutting exotic stones of very, very high-end stones. So our gross margin approximately have improved from 35% to 50% plus. I think that is one, that's one big shift what we are doing in the fabrication. Second, we have started doing all complicated business of like of the fire surfaces and wash basins for the bathrooms, and so we started taking orders more complicated to increase our gross margins. Yes. So basically, we're targeting high-end market in the DMB area. As far as the U.K. is concerned, I think U.K. is kind of going through a slow pace. It's soft, the market is quite soft and muted point of, but we are now targeting newer customers who are making specialized surfaces into the bathroom, into the DIY stores, into yachts. So, and we're introducing new colors to expand our current range in the U.K. market.

Okay. So some total, this piece of surfaces should grow at what rate. So when I look at the 9-month number also, your quartz has grown 24%, SS has grown 12%, Appliances have grown 20%, but it looks like that the surfaces piece is flat. I'm combining both of them. So if I have to look slightly ahead, what should the surfaces business growth?

So I think to say, but I think on likelihood end of this year, the U.S. surfaces will grow by 15% in the current year. U.K. business will be still soft for the current year.

Okay.

Yes.

And what I see in quarter 3 is your growth rate coming off because of the surfaces business. Otherwise, your growth rate would have been even better.

Yes. That's correct. It is also by a seasonal quarter for sink also this.

Okay. And what should be the growth rate in U.K. business in surfaces once you go through this.

Yes. So right now, it is very, very challenging environment. It's kind of very, very tough to say. I think we are taking a quarter at a time. But I think the good part is we have a business under control, and we have the margins under control, and we have customers, but it's a challenging U.K. services. But the good part is, like I said, we still make good money, and I think we got the situation under control, but it's challenging.

And my last question is, based on the quartz capacity that you added, will add by the quarter 1, and the excess capacity that you're adding in quarter 1, your peak utilization of these expanded capacities, you should attain in which quarter? You should attain in quarter 4 of next year or it will go beyond that?

See, all likely, all likelihood now with the U.S. tariff sorting out with what the growth we have with IKEA and all, I think we are looking at a very, very immediate utilize of the capacity.

Okay. So even Q4 FY '27 is more better than even Q4 FY '26.

I mean should be now with what has gone now.

Thank you very much Sir.

Thank you.

Thank you. Our next question is from the line of Vaidik Bafna from Monarch Networth Capital Limited. Please go ahead.

Congratulations, sir, on the good set of numbers. Sir, firstly, sir, I want to understand more about the gross margin expansion, which has taken place. So does this include our currency tailwinds, currency difference profits over here?

Yes. Anand will answer.

Yes. So Vaidik, this margin expansion came mainly from the raw material price, imported raw material price. MMA prices has gone down from $2.02 in April to $1.5 in December. So there is a good, I mean, value we got in the raw material pricing and therefore, this margin expansion happened on the gross margin side. That's the main reason.

So sir, do we expect this to continue for coming few quarters as well?

Now the world is so dynamic, it's very difficult to predict. But what we do normally, we do a 3-month forecast, and we give the orders based on that. So I think we will continue with this range, 1.5 to 1.6 for at least next 2, 3 months. That's the prediction we have.

Got it, sir. And sir, on the kitchen appliance part, sir, which are the products which are growing and which are the products which are not performing well for us? Is there any view over it?

So I think it's very, I think, pretty similar. The 70% of the sales are of kitchen hoods and hobs and out of which 80% are the hoods since we are starting our own assembly and manufacturing and 30% is ovens and wine chillers. I think it's pretty stable. We have not seen any decline happening in any other category, but what we have seen a big increase is obviously in terms of the new BIO-06 ovens, which we launched and our wine chillers that has shown a sharp increase.

Got it sir. That's it from my side.

Okay, Thank you.

Thank you. Our next question is from the line of Resha Mehta from GreenEdge Wealth. Please go ahead.

Thank you for the opportunity. One is just a clarification. So while volumes have grown very handsomely, revenue growth has only been 10%. So all of this is attributed only to the discounts that we've passed on to our customers in the U.S.? Or is there also a product mix impact, mix change impact?

Mostly, it's due to discounts. Yes.

Sorry, mostly sir?

Mostly due to discounts to the U.S.

And the other part, like we've announced some capacity expansions across products. But, so now with all this, the tariff headwind kind of behind us and so many trade deals having been signed, right, what is our growth projection for the next financial year, assuming status quo remains on the deals and the tariffs, et cetera. So what is our growth projection? And with that, do you think that in the next 4 to 5 months, we may again have to kind of add capacities, especially on the quartz sink side? Because if I recall correctly, 2, 3, around 2 quarters ago, we were very buoyant and optimistic on so many new customer deals that we were signing. And I think we were planning to add 2 lakh quartz capacity, which is now 1 lakh quartz capacity addition instead. So, do you think the capacities will fall short based on our revenue targets?

So, I mean, interesting question, Resha. I think let me just address it. This will probably benefit a lot of members in this. So, first of all, all these deals happening around the globe and Carysil being more like internationally exposed as far as the exports are concerned. The good thing has happened is that we have always invested in customer relationships. And this whole discount being offered to sustain the U.S. customers, showing your goodwill, showing the gesture, it is only going to pay back to you. I believe or maybe I'm wrong, but there are a lot of companies who have not passed on this, maybe sooner or later, I think this, I don't know if it works. But for us, I got these calls. I would also like to express that the Lowe's senior team was here a few months back. They, we also got a joint supplier, the best award to the Lowe's. I think we have all-time high sales right now at the Lowe's. The Lowe's is planning to double the SKUs at their stores in this 2026. All the customers have been calling across the world. U.S., yes, obviously, this happened recently. Europe is very upbeat. So, I think there's a great mood with India right now. And I think the way we have been seeing the inquiries floating in, I think whatever the deals we promised, I don't think we are buoyant. I think we are still very buoyant on it. Quarter 3, it is up with a 50% tariff. I would like to tell that my team did a great, great job in order to counter the headwinds. It's not easy when you are sitting at your office and factory and you are hitting with a 50% tariff, right? So, I think it is, we are not slowing down. Only thing this can put you up now is on a fast growth track. Nothing can be backtracked. With all this momentum building in the United States with our current customers, new customers and the European customers, I think we only see that there is a definitive, I would not say a small, but I would say there is a high probability of capacity expansion in 2026, further to what we have announced.

Right. And then 15% revenue growth is doable, or we don't still have that visibility for FY '27?

I think we got to do. I think people who kind of know me and my company to be very candid about it. I mean the company was not even doing INR 100 crore turnover, right, 10 years back. So, I think it is good. I think our momentum has been very strong. Carysil, I think we are closing in by the closing to the quarter 4, I think very confident we'll cross the $100 million mark. We are, we have told you that Carysil 2.0, we're looking at adding another $100 million. So, you will see a great lot of excitement if you're going to be there on 4th of March, 4th of April.

Sure, sure. And the last question is on the U.K. business. While you did answer about Carysil surfaces. But on Carysil products, right, is there any firepower or any internal initiatives that we can look at just to get on to the growth trajectory, because we understand that the U.K. economy is not doing well. But still, are there any levers left for, in terms of internal initiatives to guide growth?

Right. See, the diversification and product expansion is the fastest way by adding new customers. We have a great English team. We recruited some new senior and experienced people to put the appliances and the faucets on a fast growth track in the U.K. We recruited business development managers to further expand. If the companies which people have left or some companies that got closed, we got experienced people from there to maximize our market share. Third, we have did, I announced that Carysil is putting its first huge show. It is in Manchester, right on the design district. So, I think kind of launching your brand, building momentum on your brand, increasing your market presence is the way to go. So, there's a lot of fire around my U.K. team right now to build the Carysil there. I think you see it in the UAE. I think they got very excited seeing the UAE project, how we turn out to be literally like it's going to be INR 0 to INR 30 crores in 3 years' time with Carysil brand. So, I think, so my team is all fired up. I was in U.K. last week. I just try to assess the situation and what new opportunities we have.

So basically, what you're trying to say is Carysil products can probably arrest degrowth or get on to the growth path because we have rejuvenated the team with new hiring and also with new customer addition largely, right?

We are not going to leave any stone unturned to fire up growth there. That's all I can say.

Fair enough. Thank you so much and all the best.

Thanks.

Thank you. Our next question is from the line of Sanjay Ladha from Bastion Research. Please go ahead.

Hi, sir. Thank you for the opportunity and congratulations on a good set of numbers. Sir, my question would be what will be the benefit from EU bilateral trade, which previously when we export to EU, how much percentage of increase in our product price? And now what will be the benefit from this since the trade deal has been done on that side?

See, as far as our current business is concerned, to be very honest, it's not going to be like this launch like the U.S., right? But what has happened, like I said, this customer, this whole feeling good factor now with India and Europe, we see more inquiries would be coming into us. So that's one. And also, number two, you're able to see a lot of synergies and collaborations now happening with Europe. So I see a big upside from that point of view. It could be from the point of brand, it could be point of technology distribution across. Since we are actively present in the European market, people are with this, they feel very good about this India relationship. And I think both from our side and my European customers, we have been seeing that they want to invest in us more and more. So I think that's going to turn on quite positive for us.

Secondly, sir, since you already mentioned that in the Q3, there is a discount factor attached to that. I'm assuming because of 18% tariff in the U.S. market, in Q4, the discount will be gone up largely, and therefore, we will see momentum building up going forward. Is that the right understanding?

We roll back the prices based on the pro rata 50 to 80. 100%. We announced with our customers, and we are going to do that.

And sir, since in the past, you have said that you are building up, so we are largely right now U.S., U.K. and the India focus, and you said that you are developing new market as well. Any color on that side, which market we are focusing more, which market we see more attraction on that side? Any color on that side?

Yes, sure. I mean I did say that we've been focusing on a lot of new markets. We've been focusing, I said on the Gulf, which is very, very huge. We are doing across MENA, Middle East, North Africa. We are expanding into the European belt. I gave 4, 5 countries from Morocco, Croatia and all that part. We are also strengthening our presence in Europe now with Spain, in Italy, for example, we just got a new OEM customer, which is probably the #1 luxury brand in the appliances is called SMEG. You would have heard about the brand, appliances. We got our first orders from there. So, we have a lot of traction now from Europe inside the European countries, which is again of 58 nations, we are hardly at 20% in that. So, we are seeing overall IKEA business across Europe happening, right, with their presence, more countries than it is associated. We are developing our brand in South Africa, Australia. And so, the emerging markets, right, is going to show, I'm pretty sure, if you just minus America because that's a huge pie and so if you want to compare. But I think the significant growth will come from the emerging markets in 2026.

Right. And sir, my last question would be, in the past, we have alluded that Indian market and, in the commentary, also, you said that you are looking at Indian market at a INR 500 crore mark in a 5-year time frame. So, in the past, you have said that you will share some strategy, how are you going to achieve that? And what are your vision on that side? Any color on that side? Or we will see that in Q4 the time or something on that?

No, we are going to do this budgeting in our next budget meeting, and we would be rolling out this plan on 4th of April in Bombay, 100% and it is just not talking, I want like seeing is believing. So, feel on a display, all the products, what we're planning to roll out in India within the next 5 years' time, how are we going to build, what's our strategy going to be, everything.

Looking forward, sir. Thank you so much.

So please fasten your seat belt for some time. And I think 4th April, you should get in touch with our team, and they will let you know the slot where the investors can meet me and my team. There will be my global team also. There will be my key core team of India also, which will be presenting you with the global and the India plan. So, we will walk through the 5 years of India.

[Operator Instructions] Our next question is from the line of from Naitik from NV Alpha Fund.

So, my first question is, I just wanted to know what sort of realizations both in our quartz and steel sinks are sustainable on an annual basis?

What sales price?

Realization. Realization per unit in both quartz and steel sinks, what levels are sustainable?

Yes. So right now, as you see our past track, we see our average realization piece is growing about, I think, anywhere 5% to 10%, right, year-on-year, our average sales price. So I think we see, what is sustainable is not that's a very, very finance question, but I'll tell you an answer what. The company is constantly focusing on high value-added products. So I do remember when I joined Carysil back in 90s, late '90s, the average price of a sink was INR 2,400. I think now it's about INR 6,000, right? Just to give you an idea. When we launched faucets, I think it was about INR 3,000, INR 4,000 of faucet, now it's about maybe INR 8,000, INR 9,000 a faucet. So I think we have a constant endeavor to maximize our offerings on more value-added products. So, I think with that thing in mind, and obviously, we are a very margin-conscious company. We believe in high margin model. So I think looking at that, I would not be able to tell you exactly, but yes, it is sustainable with the strategy what company has, on developing and with high technology products, high design products and the value addition year-on-year. Unless if there is some kind of a tariff and we have to discount the price, then that's a different story.

Got it. So INR 6,000 for a sink can increase depending on how much value added or product mix?

I think it's about 5.5 to 6.

Got it. Sir, my second question is given that majority of our degrowth has come from surfaces this quarter and the U.S. subsidiary seems to have degrown the most. So I just wanted to understand what is leading to this degrowth? Is it just a change in product mix that we are doing, one? And two, is that subsidiary profitable or we are not making profits there?

Okay. So I don't maybe I kind of lost you in there because you're speaking to fast.

I was talking the U.S. I think the U.S. subsidiary growth.

U.S. will show growth. U.S. profits considerably rose. Now and for the year. U.K., like I said, it's going to be a challenging situation in U.K., but still our profits are quite good, not in terms of actual like last year, but yes, it's quite good. Our subsidiaries in UAE, I think, did exceptionally well. We were targeting, I think, about INR 10 crores. I think we'll be ending this year more than INR 20 crores. So I think rest of the subsidiaries are good. I think we just have to kind of sail through this a bit of rough time in U.K.

And sir, the U.S. subsidiary currently is profit.

Kindly join back the queue.

Just a follow-up on the same.

Our next question is from the line of Chintan Shah from JM Financial Family Office.

2 questions. So one is again on the surfaces segment. So if I see our PPP, it is one of the largest segments among all the product lines we have and is also growing at the fastest pace. So I mean, just to get a better sense from the next at least 4, 5-year perspective, what are we doing to sort of gain more market share here because potentially, this could be a very, very large segment for us. Just wanted to know your thoughts on that.

So I think you're absolutely right. We call it the KBS strategy, Kitchen Bathroom & Surfaces strategy. The idea is to bring this surfaces because we see a very, very high potential. So, fabrication is we wanted to expand our fabrication business globally, especially right now in just U.S. and U.K., but India, we are bringing in. The idea is to build your fabrication competency of such a level and purchase those quartz and the granite business, which can be integrated seamlessly with your kitchen sink to add value to it, right? And then we want to kind of make that a branded product that Carysil technology, fabrication, we have seamless integration of a kitchen sink, which again, we will show to you on the April 4 at the Expo. I don't think so we are going to give up. I think we completely believe that every sink like needs a faucet. It also needs a worktop. So you are absolutely right. I think that scale could be the, I think it could be really different. As you know that we acquired these companies, and we are learning this process how to grow. Just as the quartz sinks, we launched decades back and took time. The same way, I think the surface may not take so much time, but we are kind of now getting the grip on it. Once we get the grip on it, I think we will be ready to scale across the world.

Got it. Understood. So just trying to understand the guidance better that you've given of around 15% to 20% sort of run rate, revenue growth rate over the next 3 years. So if I see, I mean, surface is one segment which will grow fast, then India is where we're looking to almost 5x revenues and plus we are expanding a lot in other geographies as well. So keeping all this in perspective, I mean, this revenue guidance sort of seems conservative. I mean what are your thoughts? I mean any particular reason why you sort of expect it to be 15%, 20%?

Growth and speed is anybody knows our company, and we know that we don't leave any stone unturned, right? So I think that is what the least I think anybody would expect from us to grow at a 15%, 20%. I think company will not leave any stone unturned to achieve this. As we say that global markets are volatile. You know what are the geopolitical situations. So it's very, very tough. But if you know us and our company, I think we will leave no stone unturned to grow this company to Carysil 2.0, which we want to, we will launch it in 4th April and try to see how do we now, how fast can we bring another $100 million sales.

Understood. And just last bookkeeping question for Mr. Anand. So on the quartz sink side as well as stainless steel side, basically from the 3 customers basically Karran, Grohe as well as IKEA. Just wanted to get a sense from the current capacity, what sort of volumes are contracted with those guys? I mean just on a total basis, I mean, what is separate for each of them?

So, I think customer-wise, not able to give you the numbers because we have a confidency agreement with the customers.

[Foreign Language] He just wants an idea.

Share of business.

Yes, that's right. I mean in terms of volume, if you can share from all 3 customers. Macro.

All 3 putting together could be around 40% of business.

For both quartz and stainless as well?

Quartz, I'm talking about.

I know, I can tell you this.Roughly, if you ask in the U.S., IKEA and all put together would be about more than 60% of the business.

[Operator Instructions]. Our next question is from the line of Mehul Panjwani from 40 Cents.

I have some questions on your branding. So first is the Sternhagen brand and SMEG Italy and also whether we, are we selling, our products are being sold in IKEA India as well. So these 3 questions. Can you tell us elaborate a bit on Sternhagen?

The Sternhagen brand is now being launched in the UAE, will be launched in the U.K. and it's launched in Germany. SMEG is, we are not going with SMEG. We are OEM suppliers to SMEG, right? And your third was, what was that? Sorry, I missed it.

Are we selling in IKEA India?

Yes, we are selling IKEA India.

And Sternhagen is our own brand, is it?

Yes.

Our next question is from the line of Naman Parmar from Niveshaay Investments.

So just wanted to know any import duty is there on the kitchen sinks and bathroom fittings in the U.K. or the European markets?

No, it's only about 1.5% to 2% very low.

Okay. And secondly, on the surfaces business in the U.S. market. So what is the margin on that particular business, if you can elaborate?

So I can tell you on the gross margins, the gross margins, we have expanded from 35% to approximately 50%.

So overall, you're seeing a very good demand scenario on the U.S. perspective compared to the U.K. market, right?

Yes. I mean for the time being, I would not say the long term, let's see. But I mean, obviously, United States is a much bigger market.

Ladies and gentlemen, due to time constraint, we take that as the last question for today. I would now like to hand the conference over to Mr. Chirag for closing comments.

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 our company, please get in touch with our GIA team, our Investor Relations advisers.Thank you, and have a great day.

Thank you. On behalf of Carysil Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.