Financial Performance Summary

Q2 FY27 Performance (Quarter Ended September 30, 2026)

  • Revenue from operations: ₹60 crores, representing 10.7% year-on-year growth but 8.4% sequential decline from Q1 FY27
  • EBITDA: ₹1.3 crores compared to EBITDA loss of ₹3.6 crores in Q2 FY26
  • EBITDA margin: 2.17% compared to negative 6.65% in Q2 FY26 and 12.69% in Q1 FY27
  • Profit after tax: Loss of ₹5.4 crores compared to loss of ₹4.6 crores in Q2 FY26 and near breakeven in Q1 FY27

H1 FY27 Performance (Half-Year Ended September 30, 2026)

  • Revenue from operations: ₹125 crores, marginally lower by 2.6% year-on-year
  • EBITDA: ₹9.6 crores, more than doubled from ₹4.4 crores in H1 FY26
  • EBITDA margin: 7.66%, improved by 424 basis points from 3.42% in H1 FY26
  • Other income: Declined to ₹1.8 crores from ₹9.4 crores in H1 FY26 (attributed to lower unrealized foreign exchange income)
  • Finance costs: Lower at ₹7.1 crores compared to ₹7.3 crores in H1 FY26
  • Loss before tax: ₹4.9 crores against ₹2.6 crores in corresponding half-year
  • Loss after tax: ₹5.3 crores compared with ₹5.1 crores in H1 FY26

Operational and Strategic Developments

Business Overview

Global Surfaces manufactures and exports engineered surfaces for residential, commercial and architectural applications. Product portfolio includes six engineered quartz series: Aurora, Kalmasa, Prismatic, Stratum, Quartzite and Marquartz. Applications include countertops, flooring, wall cladding, vanities, reception desks and interior surfaces.

Manufacturing Facilities

  • Two state-of-the-art engineered stone manufacturing facilities
  • One in Mahindra World City SEZ, Jaipur with annual production capacity of approximately 1.14 million square meters
  • One through wholly owned subsidiary Global Surfaces FZE at Jebel Ali Free Zone, Dubai
  • Natural stone unit in Bagru discontinued effective March 31, 2026
  • Engineered stone now contributes approximately 98% of revenue

Market Presence

  • International distribution supported by Global Surfaces Inc. and Superior Surfaces Inc. in United States
  • Revenue mix: 96% export-oriented, 4% domestic market
  • Key markets: North America, Middle East, Europe and other export markets

U.S. Trade Measures Impact

  • U.S. Safeguard Section 201 measure on quartz surface products implemented effective August 15, 2026
  • Measure remains in place for 4 years through tariff quota system
  • First year: Approximately 13 million square meters import at 25% additional duty, volumes above quota at 50% tariff
  • Quota scheduled to increase over period with rates tapering to 19-47% by fourth year
  • Duties are over and above normal duties and applicable anti-dumping/countervailing duties
  • Single global quota rather than country-specific allocation
  • India and UAE did not receive exemptions
  • Quartz surface products to U.S. were approximately 223 million in 2026, representing around 72% of India's total quartz exports
  • Government of India has requested consultations with World Trade Organization

Other Trade Environment

  • Earlier 50% tariff imposed in 2025 no longer in force
  • Temporary 10% global tariff expired in July 2026 following Supreme Court February 2026 ruling
  • 10% Section 301 tariff applied on Indian goods in July 2024
  • Interim India-U.S. trade agreement framework announced in February 2026 remains unsigned

Product Strategy

  • Focus on customized and high-value engineered surface products
  • Marquartz technology enables premium engineered quartz surfaces replicating natural veining of marble and granite
  • Marquartz offers 20-30% higher selling prices compared to regular products
  • Technology incorporates proprietary vein patenting process for differentiated higher-value applications

Subsidiary Loan Conversion

  • Board approved conversion of unsecured loan to Global Surfaces FZE on August 10, 2026
  • Conversion amount: AED 3 million (USD 10.86 million) aggregating approximately ₹110.44 crores
  • Conversion based on value determined by independent valuer as of reference date June 30, 2026
  • Pending completion of ODI filings under FEMA and regulatory formalities with Jebel Ali Free Zone Authority, Dubai
  • ₹111 crores reclassified as advanced towards equity share subscription under non-current financial assets
  • Transaction involves no cash outflow, represents reclassification of existing financial exposure into equity investment

Cost Pressures

  • Raw material prices increased by 25% to 50%, translating to estimated average impact of around 10% on selling prices
  • Freight costs on imported raw materials increased nearly 5 times
  • Petroleum prices cited as major cost component with regional pricing over $110
  • Company absorbing most cost increases, limited ability to pass on to customers due to industry disruptions

Domestic Market Expansion

  • Strengthened domestic market presence through expanded marketing team
  • Commencement of domestic dispatches from November 2026
  • Domestic product mix: 70% produced from India factory, 30-35% from UAE facility
  • Expected to improve India capacity utilization and reduce overhead costs

Operational Challenges

  • Geopolitical developments impacting operations
  • Higher input costs and logistic costs
  • Raw material disruptions leading to production breakdowns in H1 FY27
  • Receivables increased by ₹17 crores since March 2026 due to geopolitical disruptions in March and May
  • Receivables turnaround time: 90-150 days, expected to normalize by end of Q3 FY27
  • UAE business reported loss of ₹57 million INR in Q2 vs ₹31 million INR in Q1, but making cash profit despite challenges

Management Outlook and Guidance

  • Near-term operating environment expected to remain challenging
  • Uncertainty around U.S. trade measures and regional geopolitical situations
  • Continued inflated input and trade costs
  • Priorities: strengthening engineered quartz business, geographic expansion, domestic market building, differentiated products, cost discipline
  • Targeting revenue run rate of 70-80 crores quarterly for operating leverage
  • Realistic timeline for improvement: Q4 FY27, dependent on geopolitical stability
  • Company currently at cash break-even point

Q&A Session Highlights

  • Q2 EBITDA margin drop attributed to inventory spillover from Q1 and increased costs
  • Limited price pass-through to customers due to market adjustment to new tariff environment
  • Domestic sales expected to improve financial results through better capacity utilization
  • Section 201 tariffs being paid by customers, not company
  • Majority of subsidiary loan converted to equity, approval process expected 2-3 months
  • 70-75% of H1 revenue came from higher payables (approximate estimate)
  • Forex gains declined due to rupee stability around 96 level vs dollar
  • H1 tax payment due to other income accumulation on standalone basis