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Kaka Industries — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Kaka Industries reported a strong H1 FY26 with a 30% YoY revenue growth to ₹124.89 crores and a 31% YoY EBITDA increase to ₹16.75 crores, driven by volume traction and customer network expansion. Net profit grew 35.9% to ₹8.85 crores, with improved cash flow from operations. However, gross margins saw a slight dip from 35.8% to 32.6% due to product mix and aggressive sales in new markets, and the captive solar plant commissioning was delayed.

Highlights

Revenue of ₹124.89 crores, reflecting a 30% year-on-year increase.
EBITDA stood at ₹16.75 crores, up 31% YoY, with EBITDA margin improving to 13.4%.
Net profit rose by 35.9% YoY to ₹8.85 crores, maintaining a healthy net margin of 7.1%.
Customer network expanded from 300 plus to over 450 partners.
Cash flow from operations increased from ₹3.8 crores last year to ₹15.7 crores.

Concerns

Gross margins are down from 35.8% to 32.6% YoY, attributed to low-cost product mix and aggressive sales discounts.
Commissioning of the 7.5 MW captive solar plant was delayed due to prolonged monsoon conditions.

Key financials

2 periods

Headline

Revenue
₹124.89 Cr
YoY +30%
EBITDA
₹16.75 Cr
YoY +31%
EBITDA Margin
13.4%
Net Profit
₹8.85 Cr
YoY +35.9%
Net Margin
7.1%
Gross Margin
32.6%

H1

Cash Flow from Operations
₹15.7 Cr

What they filed

Q4 FY26: revenue up 66.3%, net profit up 66.7% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY23	Q4 FY23	Q2 FY24	Q4 FY24	Q2 FY25	Q4 FY25	Q2 FY26	Q4 FY26
Revenue	75	79	88	83	95 +27%	102 +29%	125 +42%	138 +66%
Expenses	72	69	78	71	83	89	108	120
EBITDA	3	11	9	12	13 +333%	13 +18%	17 +89%	19 +58%
Margin	4%	13%	11%	14%	13%	13%	13%	13%
Other income	0	0	0	0	0	0	0	0
Interest	1	1	1	1	2	3	3	3
Depreciation	1	1	1	1	2	2	2	2
Profit before tax	1	9	8	10	9 +800%	9 +0%	12 +50%	13 +30%
Tax rate	40%	26%	16%	32%	27%	26%	25%	24%
Net profit	1	6	6	6	7 +600%	6 +0%	9 +50%	10 +67%
EPS	2.92	6.48	4.75	4.76	4.77	4.65	6.48	7.26

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Management noted receiving multiple small orders, but no significant order book from government entities was disclosed. They plan to focus more on government orders going forward.

Source: Q&A

Capital allocation

high confidence

Capex Capex disclosed entirely through internal accruals
- Establishing a 7.5-megawatt captive solar plant in Kheda district
- Adding lines in current facility for PVC and WPC profiles
So, there is no specific major, funding we will need. It is out of, I mean, internal accruals only. It is in a gradual basis. ... For the civil front side, we have pending, I mean, we have open space, and we can definitely add lines in the current facility only. So, there is no need to add any land CapEx.

Guidance & targets

Revenue

Year-on-year revenue growth Revenue · H2 FY26 · High confidence 30%

Yeah, yeah. It is, sustainable. I mean, we are confident that we can achieve I mean, 30% year-on-year growth for the rest of the year also.

— Chintan Bodar
Organic growth Revenue · FY27 · Medium confidence 25%-30% year-on-year

So, based on the operational capacities, organically, we can grow 25%-30% year-on-year.

— Chintan Bodar

Capacity

Total available capacity utilization Capacity · H2 FY26 · High confidence 80%

if you see from the month of August and September, we have achieved almost 80% of the total available capacity. So, I think, for the rest of the financial year, we are confident that we can maintain that.

— Chintan Bodar

Profitability

EBITDA improvement from solar plant Profitability · after commissioning in Q4 FY26 · High confidence ₹40-45 lakhs per month

So, once it will come, then EBITDA will definitely improve. And monthly month-on-month basis, we will see in rupee terms ₹40 lakhs to 45 lakhs, EBITDA will improve.

— Chintan Bodar

What to watch in Q3 FY26

7.5 MW captive solar plant operational status

Q4 FY26

Current Delayed due to monsoon, expected completion in later part of final quarter.

Target Commercial operations commenced.

Why it matters

Will reduce power costs by ₹40-45 lakhs per month and improve EBITDA.

Although commissioning was delayed due to prolonged monsoon conditions, we are confident that the project will be completed in the later part of the final quarter.

Risks & concerns

Gross Margin Pressure
medium

Gross margins declined from 35.8% to 32.6% YoY, attributed to low-cost product mix and strategic discounts for new geographies, though EBITDA per ton was maintained.

Analyst acknowledged
Solar Plant Commissioning Delay
low

Commissioning of the 7.5 MW captive solar plant was delayed due to prolonged monsoon conditions, but is expected to be completed in the later part of the final quarter.

Management acknowledged

Q&A highlights

8 direct

Capacity Utilization and Ramp-up Direct

for the first half, we have achieved around 44% - 45% of the capacity on the general I mean, overall basis. And out of the available capacity, for the first half on an average, it was around 60% to 65%. ... for the rest of the financial year, we are confident that we can maintain that [80%].

Clarifies current capacity utilization and future ramp-up targets, crucial for understanding growth potential.

Asked by Raghav Maheshwari

Raw Material Sourcing and Cost Stability Direct

PVC resin is the major material. Yes. ... It is 100% from domestic market. ... For the raw material, I mean, input cost is almost in parallel level, I mean there is no major spike on either base. ... if there is any major change like, at overall level, I mean, more than 5%, then we will pass it on to the customers.

Addresses raw material price volatility and sourcing strategy, indicating cost stability and ability to pass on significant increases.

Asked by Divyam Joshi

Competition and Growth Strategy Direct

Obviously, this competition are there. And we are confident that we can achieve because we have confidence with our dealer and distribution network and the marketing strategies we are opting for. We are collaborating with the influencer and we are being registered with the government agencies also.

Explains how the company plans to sustain 30% growth despite increasing competition.

Asked by Raghav Maheshwari

Gross Margin Dip Explanation Direct

So, in rupee terms, if you can say per kilo, it is reduced by 2.5 or around 3. And by margin, it is less than 2% compared to previous year, right? So that is, basically because of low-cost product mix, and the discounts may be offered because of aggressive sale. So, it is not on a major side because, ultimately, on EBITDA side, we are maintaining per ton and the percentage wise.

Clarifies the reason for the gross margin decline, attributing it to product mix and strategic discounts for new geographies, while reassuring on EBITDA per ton.

Asked by Manan Madlani

Working Capital Management Direct

Debtors side, I mean, it is almost same 51% was there for the last half, and that is 55% as of now. So, inventory level it was more than 115 days it is now around 90 days. So, I think it is in control, and always we are keen to keep the working capital in control.

Addresses concerns about increasing working capital as a percentage of sales, providing specific metrics for debtors and inventory days.

Asked by Manan Madlani

Achievability of 30% Growth Guidance Direct

So last year, we were facing the electricity disruption. So that was the main reason, last year, it was not achieved. And the dedicated line will come in by end of January. So, from that point, there is no issue with the production, and that's why we have achieved 30% in the first half. And we will continue to on the same side or for the second half also.

Explains past misses on growth guidance and provides confidence for achieving it this year, linking it to resolved operational issues.

Asked by Tanvi Bandari

Future CapEx Plans and Funding Direct

So, there is no specific major, funding we will need. It is out of, I mean, internal accruals only. It is in a gradual basis. ... For the civil front side, we have pending, I mean, we have open space, and we can definitely add lines in the current facility only. So, there is no need to add any land CapEx.

Reassures that future capacity expansion will be funded internally and does not require land acquisition, indicating efficient capital deployment.

Asked by Ashish Kumar

Government Orders and Pipeline Direct

So, there are multiple orders we have received, but it is a very small in amount. So that is not the major order book we have from government entities. But going forward, we will have a major focus on that, and we are creating a team for that also.

Clarifies the current minimal contribution from government orders but signals a strategic focus and team formation for future growth in this segment.

Asked by Divyam Doshi

2 min read 6 chapters

Detailed narrative

Strong H1 FY26 Financial Performance

Kaka Industries delivered robust financial results for H1 FY26, with revenue growing 30% year-on-year to ₹124.89 crores. EBITDA increased by 31% YoY to ₹16.75 crores, leading to an improved EBITDA margin of 13.4%. Net profit also saw a significant rise of 35.9% YoY, reaching ₹8.85 crores, with a healthy net margin of 7.1%.

Operational Expansion and Market Penetration

The company expanded its customer network from over 300 to more than 450 partners, supported by three depots in Hyderabad, Noida, and Ahmedabad. Production was enhanced across WPC profile, uPVC sheet panels, and uPVC profiles, with PEB and HVLS fans segments growing approximately 132% year-on-year. Capacity utilization reached 80% of total available capacity in August and September, with a target to maintain this for the rest of FY26.

Strategic Initiatives and Sustainability Focus

Kaka Industries plans to file for migration to the main board by November 26 for parallel listing on NSE and BSE, aiming to enhance visibility and strengthen corporate credibility. As part of its sustainability efforts, a 7.5-megawatt captive solar plant is being established in Kheda district, expected to reduce power costs by ₹40-45 lakhs per month upon commissioning in the later part of the final quarter.

Raw Material and Margin Dynamics

The company sources 100% of its major raw material, PVC resin, domestically, with stable input costs over the last year. While gross margins dipped from 35.8% to 32.6% YoY, management attributed this to a low-cost product mix and aggressive sales discounts in new geographies, emphasizing that EBITDA per ton was maintained. Significant raw material price changes (over 5%) will be passed on to customers.

Capital Efficiency and Future Growth Outlook

Cash flow from operations significantly improved from ₹3.8 crores last year to ₹15.7 crores in H1 FY26, reflecting better working capital management. The company plans to fund future capacity additions, including new lines for PVC and WPC profiles, through internal accruals, leveraging existing open space at its Kheda facility without requiring new land CapEx. Management guided for a sustainable 30% year-on-year revenue growth for the remainder of FY26 and 25-30% organic growth for FY27.

Market Expansion and Product Strategy

Kaka Industries is actively expanding its presence beyond Gujarat into states like Telangana, Maharashtra, Karnataka, Hyderabad, Rajasthan, UP, and MP, focusing on broadening its distribution network. The company confirmed that WPC and PVC profiles are effective replacements for traditional particle board furniture, with doors and windows constituting 15% of total sales, primarily used in furniture applications.

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