Record revenue, margin pressure — Q3 recovery hinges on pricing pass-through

Revenue ₹294.8 Cr delivered, matches management statement ₹294.76 Cr

₹294.76 Cr vs ₹193.26 Cr in Q2 FY26 = 52.5% growth confirmed

Delivered OPM 13.6%; EBITDA margin compression confirmed by cost pressure explanation

Delivered ₹25.0 Cr matches; YoY growth from ₹20.64 Cr = 21.2%

Management explicitly stated pricing adjustments will flow through Q3, corroborated by industry cost pressure narrative

Management confirmed Q2 FY27 volumes 11,252 MT, ~13% growth vs prior year

Announced on 2 October 2026, described as one of largest from pet food/animal nutrition sector globally

₹150 Cr/month, 3-year contract from international pet-food/nutrition corporation (early Oct 2026). Addresses future capacity utilization and revenue visibility.

Now 21% of revenue (vs 17–18% in FY26). Prior guidance targeted 23% mix expansion; tracking ahead on volume contribution.

Added 5,040 MT rented capacity in Aug 2026 to bridge gap until Oct 2027 plant commissioning. Targeting 50% utilization (2,500 MT) in Q3.

No change vs prior call (expected Q3 onwards). Pricing adjustments lagging by 1–2 quarters; management confident but dependent on polymer price stabilization.

Volumes 11,252 MT, ~3% QoQ, ~13% YoY. Plant 90–91% utilized. Raw material +26% in Q2, only ~7% passed to customers; remainder lagging 1–2 quarters.

Currently 21% revenue from pinch-bottom (vs 17–18% in FY26). Pinch-bottom machines now 5 units, ~60–70% utilized post-ramp. Additional capacity targets 24k–25k MT for pinch-bottom by Oct 2027.

50% contractual on pricing revision basis (quarterly/monthly). 45–50% conversion-cost customers; 1–2 quarter lag in price pass-through. Non-contractual 1-month lag. Gross margin per kg down ₹16 per kg Q2 vs Q1 baseline; EBITDA per kg ₹36 vs ₹52 prior year.

Inventory buildup for scale-up (₹26 Cr), receivables increase (₹55 Cr export-linked). Mexico installed 400 MT/month; currently 80–90 MT/month sales; expecting 100–120 MT breakeven in Oct 2026, approaching win-win by Q4 FY27.

Recovery dependent on polymer price stabilization; pricing flow-through already in process. 50% of new capacity ramp-up (2,500 MT) expected by Q3. Q3 historically better for company and rice industry. Confidence high but subject to market conditions.

EBITDA per kg currently INR 46–47 (down from INR 55 prior quarter). Q1 INR 55; year-on-year INR 54 achieved. Target to recover to INR 54 in near term (2 quarters). Yearly target vague: 'almost we can achieve it'; no explicit FY27 PAT/revenue number given.

Volume expected to grow as new 5,040 MT interim capacity + 70k-ton plant (Oct 2027) commissioned. Pinch-bottom mix expansion ongoing. New ₹150 Cr/month order provides visibility.

Pricing adjustments expected to flow through Q3 onwards. Commodity-dependent; management confident but hedged on crude-oil trends. EBITDA per kg target INR 54 in near term (vs INR 46–47 current).

Mexico currently 400 MT installed, 80–90 MT sales (scale-up drag ₹6 Cr PAT in Q2). Win-win scenario by Q4 FY27 as volumes scale to 100–120 MT/month.

Already funded and under construction. Interim 5,040-ton rented capacity added Aug 2026 bridges gap. No revised CapEx guidance issued.

Polymer prices rose >50% in H1; only 7% passed to customers in Q2. Remaining 43% lag 1–2 quarters. Further oil-price swings could extend margin compression or reverse price realization.

₹150 Cr/month order (Oct 2026) from single international customer now represents 6%+ of annualized revenue (₹1.8 Bn). Loss of this contract or order reduction could materially impact FY27–FY28.

Sayem Knack JV in Mexico (400 MT/month installed) currently at 80–90 MT/month sales, dragging consolidated PAT by ₹6.06 Cr in Q2. Breakeven target Q4 FY27 assumes demand ramp to 100–120 MT/month and margin stabilization.

Pinch-bottom bags market (esp. rice industry) is niche. Management targeting 24k–25k MT by Oct 2027; if rice demand softens or customers don't adopt, ramp-up could fall short of targets.

₹380 Cr CapEx (70k-ton plant, Oct 2027) assumes demand growth. If price pressure persists or customer demand softens, plant ramp-up could be slower than expected, pressuring ROE.