Hello Sir,

Hope you are doing well.

You might be aware of Granite counter tops, but not sure if you are aware of Quartz surfaces. Well, Quartz surfaces are an engineered product and can be made to have any kind of design, including Natural Granite designs.

Recently, we were looking at Pokarna as the stock is down around 40% from its peak price of 800 in Jan’22 and the company reported good numbers for the Sep’23 quarter.

Pokarna deals in both Granite and Quartz surfaces; however Quartz is now the major driver of sales and profits of the company.

Below, we have shared interesting insights from the Q2 FY 24 con-call of Pokarna to understand the current situation and the outlook for the company.


Before that, currently we have around 5 stocks in our buy-list.

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Pokarna – Insights from Q2 FY 24 con-call of the company

– Basic details on Q2 FY 24

  • During the quarter, we observed an improvement in margins across various financial parameters. This improvement was primarily driven by a combination of innovative product designs, thickness mix and favorable forex tailwinds
  • Internally, we have multiple initiatives underway to reduce costs, enhance efficiencies, and optimize material utilization
  • In the United States, mortgage rates have soared to their highest levels in more than two decades, thereby suppressing the housing market and limiting home renovation activities
  • We are implementing strategic actions to boost our volumes while prudently managing margins and operating expenses. These actions include launching distinctive and innovative design collections and selectively expanding our presence in various markets
  • We are delighted with the favorable responses we’ve garnered from recently entered markets such as Canada, Russia, and France, among others, over the past year. Furthermore, we identify substantial potential in the Indian market

– Margins improvement in Q2

  • The new design collections which we have launched in the recent past help us to get a better realization over designs which have been our portfolio for a longer time
  • So, largely the improvement in margins is coming because the average realization has gone up with the new designs getting introduced
  • We had about Rs 1.4 crore of Forex gains in this quarter
  • Our focus is definitely margins over the price unlike what our competition does
  • We will keep focusing on 30 + EBITDA margin is what is our focus at the moment

– Capacity Utilization

  • Capacity utilization definitely is not at the optimum level
  • We have good headroom for the capacity utilization to happen once the demand improves


  • We have chosen to invest up to 10 million euros in technological upgrades to our plant, with expectations for implementation by the middle of the next financial year
  • It’s not going to make any additional capacity come up, but it’s going to help us bring more innovative and transformative products to the market
  • We expect that the product should at least give us 20% extra realization over what we currently get

– US demand

  • The channel still has inventory is what is our assessment
  • I believe that next couple of quarters the same reduction of inventory would continue in the channels in the U.S.
  • The products mix what we are talking about, see, as I said in the previous calls and also in certain of my opening remarks, design innovation is the way to go

– Debt

  • We have reduced actually debt by Rs. 47 crore in last 12 months and going forward our actually the obligation is around Rs. 35 crore



Disclaimer: This is not a recommendation to buy/sell Pokarna. The securities quoted are for illustration only and are not recommendatory.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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