Financial Performance - Q4 FY26

  • Revenue from operations stood at INR322.9 crores, an increase of 8.4% year-on-year
  • Gross profit was INR165.3 crores, increasing by 14.1% year-on-year
  • Gross profit margin improved by 258 bps year-on-year to 51.2%
  • EBITDA was INR57.7 crores, registering growth of 23.3% year-on-year
  • EBITDA margin stood at 17.9%, an increase of 217 bps year-on-year
  • Profit after tax was INR36.5 crores, increasing by 18.4% year-on-year
  • PAT margin for the quarter stood at 11.3%, expanding by 96 bps year-on-year

Financial Performance - Full Year FY26

  • Revenue from operations was INR1,250.1 crores, an increase of 15.8% year-on-year
  • Gross profit was INR637.8 crores, which increased by 16.4% year-on-year
  • Gross profit margin came in at 51.0% with 30 bps expansion
  • EBITDA was INR224.5 crores, increasing by 21.5% year-on-year
  • EBITDA margin improved by 85 bps to 18.0%
  • Profit after tax was INR141.3 crores, an increase of 18.7% year-on-year
  • PAT margin for the year was at 11.3%, increasing by 28 bps

Working Capital Metrics

  • Inventory days stood at 97 days in Q4 FY26
  • Debtor days stood at 78 days, reduced by 4 days quarter-on-quarter
  • Creditor days stood at 37 days, a decrease of 3 days quarter-on-quarter
  • Working capital cycle stood at 139 days for Q4 FY26 and full year

Business Segment Performance

Own Brand Sales
  • Domestic own brand sales grew by 17% year-on-year to INR264 crores in Q4
  • Full year domestic own brand sales stood at INR1,017 crores, registering 20% growth
  • Own brand exports contributed INR34 crores in Q4, an increase of 31% year-on-year
  • Full year own brand exports were INR122 crores, an increase of 29%
  • Own brand sales now account for approximately 91% of total revenue in FY26 (up from 87% in FY25, 86% in FY24, and 80% in FY23)
OEM Sales
  • Domestic OEM declined from INR15 crores in Q4 FY25 to INR9 crores in Q4 FY26
  • Domestic OEM business has been fully phased out with legacy relationships reduced to 0
  • Export OEM business declined from INR32 crores in Q4 FY25 to INR17 crores in Q4 FY26
  • New customer engagements through Flomaxe subsidiary created incremental revenue stream

Product Segment Results

Creative Segment
  • Achieved 80% year-on-year growth for Q4 FY26
  • 74% year-on-year growth for full FY26
  • Revenue contribution: INR86 crores for Q4, INR298 crores for full year
  • Expanded product portfolio with 6 new offerings during Q4 and 29 new products during FY26
  • Capex of INR20 crores in FY26 for Flomaxe facility in Surat
  • Recently operationalized wooden pencil manufacturing at Surat facility
Steel Bottles and Houseware Segment
  • Revenue increased by 76% year-on-year in Q4 FY26 to INR22 crores
  • Full year sales worth INR85 crores, representing 95% year-on-year growth
  • Company sells 24 products in this segment with multiple SKUs
Pens Segment
  • Total revenue declined 4% year-on-year from INR221.66 crores to INR213.44 crores
  • Decline entirely attributable to Pen OEM segment which contracted 65%
  • Own brand business in Pens grew 9%
  • Own brand sales now represent 95% of Pens revenue versus 80% a year ago

Strategic Updates and Guidance

  • New Valsad facility operations scheduled to commence from Q1 FY27 with capacity ramp-up expected by Q3 FY27
  • Board approved final dividend of INR0.50 per share, representing 10% of face value, aggregating 20% of FY26
  • Maintained revenue guidance of 15% growth for FY27 despite West Asian crisis
  • Targeting 5% growth in Pens, 50% growth in Creative, and 40% growth in Steel Bottles for FY27

Raw Material Impact and Mitigation Strategies

  • Crude-linked derivatives constitute approximately 35% of raw materials
  • Raw material costs have increased from 10% to 50% on average due to West Asia crisis
  • Expected 13% increase in consumption ratio due to higher raw material costs
  • Q4 margins insulated due to pre-stock inventory, but margin impact expected in Q1 FY27
  • Mitigation strategies include rationalization of schemes and discounts, price increases for Steel Bottles and Houseware products
  • Expect margin impact of approximately 4% in Q1 FY27, normalizing over subsequent quarters
  • Full year FY27 EBITDA margin guidance of 17-19% range

Capital Expenditure

  • Capex spend of INR104 crores in FY26, with INR40 crores in Q4 alone
  • Planned capex of INR80-90 crores for FY27, including INR60-70 crores for Valsad facility
  • Peak revenue capacity from existing infrastructure estimated at INR1,750 crores
  • Capital expenditure generates revenue multiple of more than 3x

Geographic and Market Updates

  • Export to Middle Eastern countries represents approximately 25% of total exports
  • Export routes to Middle East temporarily closed due to geopolitical situation
  • Company operates in 100-plus countries with recent expansion to four new countries
  • Back-to-school season demand remains extremely positive despite price increases

Working Capital Outlook

  • Inventory days increased from 87 in previous year to 94 in FY26 due to strategic restocking
  • Expect 5-7 days improvement in inventory days over next two quarters
  • Receivables expected to continue improving as high-growth segments expand

Competitive Landscape and Growth Strategy

  • Creative segment growth driven by market share capture through innovative products
  • Growth strategy focused on product portfolio expansion and distribution reach deepening
  • Marketing strategy includes social media promotion, school promotions, BTL activities, and POP displays
  • No change in marketing strategy planned

Subsidiary Performance

  • Subsidiary performance stronger due to tax benefits and expansion activities
  • Manufacturing spread across multiple legal entities (Daman, Valsad, Dehradun, Surat) based on product mix
  • Consolidated financials provide accurate picture of overall business performance