Agarwal Fortune India Limited — Q4 FY25 earnings call

Call held 30 May 2025

Management summary

Agarwal Toughened Glass India Limited reported strong H2 FY25 results with a total income of INR 68 crores, an EBITDA margin of 39.65%, and a net profit margin of 26.02%. The company invested INR 24 crores in capacity expansion and is strategically entering the solar glass segment. Management provided guidance for a 35-45% revenue CAGR and 30-35% EBITDA margin over the next three years, while addressing concerns regarding gross margin pressure and working capital intensity.

Highlights

  • Achieved a total income of INR 68 crores in FY25.

  • EBITDA margin expanded to 39.65% in FY25.

  • Net profit margin reached 26.02% in FY25.

  • Invested INR 24 crores in capacity expansion for third manufacturing facilities.

  • Strategic diversification into the high-growth solar glass segment.

  • Targeting robust 35-45% revenue CAGR and 30-35% EBITDA margin over the next three years.

Concerns

  • Gross margin pressure over the last two years due to sluggish raw material prices and falling glass prices.

  • Working capital intensity due to 100% advance payment requirements to suppliers for projects.

  • Dependence on imports for raw materials, leading to price volatility without hedging.

Key financials

  1. Total Income ₹68 Cr
  2. EBITDA Margin 39.6%
  3. Net Profit Margin 26%
  4. Net Profit ₹15 Cr
  5. Operating Cash Flow ₹18 Cr

What they filed

Q4 FY26: revenue up 48.5%, net profit down 18.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue1 22 0 33 2 +88%46 +109%1 +75%49 +48%
EBITDA-0 7 0 13 0 +900%14 +100%0 −29%14 +8%
Net profit0 5 0 11 0 +50%12 +140%0 −75%9 −18%
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

Total value

₹45 Cr

as of 2025-05-30 quantified

Composition

  • North India (geography)
  • South India (geography)
The company's current order book stands at approximately INR 45 crores, with strong demand visibility from both domestic and international markets, and a focus on expanding reach in South India.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex ₹10 Cr
    • Capacity expansion in third manufacturing facilities with tempering technology (FY25) ₹24 Cr
    • Gross block investment (FY26) ₹10 Cr
    This year, we have made significant strides in capacity expansion by investing INR 24 crores in our third manufacturing facilities equipped with state-of-the-art tempering technology.
  • Debt Gross ₹28 Cr
    • New borrowing Bank loans taken to fulfill working capital gap
    शॉर्ट टर्म लोन्स एंड एडवांसेस इसमें अट्ठाईस करोड़ का नंबर है, जो लास्ट, लास्ट ईयर से दो करोड़ था। ये भी आपका वर्किंग कैपिटल से रिलेटेड है? सर ये आपने... वर्किंग कैपिटल से रिलेटेड है, सर। कुछ एडवांses है, मैक्सिमम वर्किंग कैपिटल है।
  • Liquidity Liquidity disclosed IPO funds and cash credit limits are utilized to manage working capital requirements.
    हम लोगों ने एक्चुअली इसके लिए वर्किंग कैपिटल का हम लोग एक जो है IPO फंड पर यूटिलाइज हुए हैं, वर्किंग कैपिटल का गैप है। और कुछ वर्किंग कैपिटल गैप फुलफिल करने के लिए हमने बैंक लोन भी ले रखे हैं। जो कैश क्रेडिट लिमिट है जो उसके नीचे का गैप आता है, वो हम लोगों का बैंक लोन प्लस जो हम लोगों का रिलाइज़ फंड का उससे फुलफिल हुआ है।

Guidance & targets

Revenue

  • Revenue CAGR Revenue · next 3 years · High confidence 35-45%
    Looking ahead, we are confident to achieve 35 to 45% revenue CAGR over the next three years

    — Mahesh Agarwal

Profitability

  • EBITDA Margin Profitability · next 3 years · High confidence 30-35%
    with projected EBITDA margin 30% to 35% supported by our strategic roadmap of operational discipline and innovation-driven culture.

    — Mahesh Agarwal

  • EBITDA Margin Profitability · High confidence 30-35%
    सर, डेफिनेटली, हम लोगों का एक्सपेक्टेशन अभी इसमें 30% से 35% है।

    — Rahul Khandelwal

Capex

  • Gross Block Investment Capex · next year · High confidence INR 10 to 15 crore
    INR 10 to 15 crore.

    — Rahul Khandelwal

What to watch in Q1 FY26

Solar glass segment production start

next quarter / shortly
Current shortly entering
Target Commercial operations start

Why it matters

This is a strategic diversification into a high-growth segment, crucial for future revenue and market positioning.

But definitely, shortly we are entering in this.

Risks & concerns

  • Gross margin pressure

    medium

    Gross margins declined over the last two years due to sluggish raw material prices and falling glass prices.

    Analyst acknowledged

  • Raw material price volatility and import dependence

    medium

    The company is dependent on imports for raw materials and does not hedge against price fluctuations, relying on high margins to absorb.

    Analyst acknowledged

  • Working capital intensity

    medium

    The capital goods sector is cash-flow hungry, requiring 100% advance payments to suppliers, impacting the working capital cycle.

    Management acknowledged

Q&A highlights

2 direct, 2 evasive
Gross margin decline and future outlook, especially with solar glass Partial
हम लोग अभी ट्राई कर रहे हैं अपने मार्केट को कैप्चर करने के लिए फ्रॉम लास्ट टू यर्स और हम लोगों का जो प्रोडक्ट मिक्स होता है उसमें हम तीन तरह के ग्लासेस में--, मतलब बैटरी हम लोग सेल करते हैं।, DGU, laminated and toughened glass.

Analyst questioned the decline in gross margins over the past two years and sought clarity on future margin trends, particularly with the new solar glass venture. Management explained product mix and working capital impact on margins.

Asked by Agastya Dave

Quality control for high-performance safety-critical glass products Direct
सर क्वालिटी कंट्रोल के लिए ऑलरेडी BIS में कुछ मेजरमेंट और कुछ स्ट्रिक्ट गाइडलाइंस इसमें है, जो कंपलसरी है। विदाउट फॉलोइंग दीस गाइडलाइन्स आप सप्लाई नहीं कर सकते हैं ग्लास। तो ऑलरेडी जो फ्लोट ग्लास मैन्युफैक्चरर्स होते हैं, मतलब बहुत कम है, तीन या चार सौ ग्लास के मेन मैन्युफैक्चरर्स हैं, तो वहां से ऑलरेडी ये BIS से कंप्लायड होकर ग्लास हम लोगों के पास आता है और हम लोग की खुद की कंपनी भी बीआईएस कंप्लायड है।

Addressed concerns about maintaining quality standards for specialized glass products, highlighting BIS compliance and third-party audits and supplier support.

Asked by Rajesh Shah

Hedging against raw material price volatility and import dependence Evasive
No, sir. It's not possible. In this current market scenario, it's not possible. We cannot hedge that because it's a मतलब वर्किंग स्टाइल अगर आप देखते हैं तो हम लोगों के पास पहले ऑर्डर आता है, ऑर्डर प्लेस होता है, देन हम उसे फुलफिल करते हैं। तो इसे हेज करने का कोई पॉसिबिलिटी नहीं है और उसका कोई पॉसिबल रीजन भी नहीं होता है।

Revealed that the company does not hedge against raw material price volatility, relying instead on high margins to absorb fluctuations, which could be a risk.

Asked by Yashovardhan Banka

Capital allocation strategy for expansion, R&D, debt reduction, and shareholder returns Partial
बहुत फ्यूचर प्रोजेक्शंस तो मैं आपको एक्सप्लेन नहीं कर पाऊंगा because its a recorded call and also its the regulatory compliance की मैं फ्यूचरिस्टिक प्रोजेक्शन आपको शेयर नहीं कर सकता हूं, सर। But definitely we are trying to expand all our facility, लाइक हम लोग R&D और पूरा कंप्लीट अपना जितना भी मैन्युफैक्चरिंग, या कैपेसिटी डेवलपमेंट का हमारा फेज है, हम लोग सभी पे इन्वेस्ट कर रहे हैं।

Management declined to provide specific future capital allocation details due to compliance, but confirmed ongoing investments in R&D, manufacturing, and capacity development.

Asked by Yashovardhan Banka

Retaining skilled talent and employee turnover Direct
सर हमारा एम्प्लोयी टर्नओवर रेश्यो इंडस्ट्री वाइज भी अगर हम मेन्टेन करते है तो एम्प्लोयी टर्नओवर रेश्यो बहुत कम है हमार। और जो हमारे स्किल्ड एम्प्लोयी है क्यों की इसमें आपका जो फ्लोर वर्कर होते है वह भी स्किल्ड ही होते है।

Management stated that employee turnover is low and they focus on training and growth opportunities to retain skilled workers, which is crucial for a manufacturing business.

Asked by Yashovardhan Banka

Gap between net profit and operating cash flow Partial
हम लोगों ने एक्चुअली इसके लिए वर्किंग कैपिटल का हम लोग एक जो है IPO फंड पर यूटिलाइज हुए हैं, वर्किंग कैपिटल का गैप है। और कुछ वर्किंग कैपिटल गैप फुलफिल करने के लिए हमने बैंक लोन भी ले रखे हैं।

Analyst questioned the significant gap between net profit (INR 15 crores) and operating cash flow (INR 18 crores), which management attributed to working capital requirements funded by IPO proceeds and bank loans.

Asked by Bavesh Rathod

Production start and planning for the new solar glass segment Evasive
I cannot share you the exact date and time and anything else because it's a regulatory compliance issue. But definitely, shortly we are entering in this.

Management confirmed entry into solar glass but refused to provide specific timelines for production or planning due to regulatory compliance, indicating it's a sensitive strategic initiative.

Asked by Bavesh Rathod

Inventory levels due to imports and handling raw material price fluctuations Partial
सर इसमें जो भी हम लोगों का प्रोजेक्ट फाइनल एज में होता है, अकॉर्डिंगली हम लोग, क्योंकि एक ग्लास सप्लायर जो होता है वो किसी भी तरह का ग्लास को मैन्युफैक्चर करता है। तो बहुत सारे तरह के क्वालिटी ग्लास, अलग-अलग क्वालिटी के ग्लासेस होते हैं। तो एक जो ग्लास के सप्लायर, क्योंकि इस साइड में बहुत लिमिटेड है। तो एक सप्लायर अगर एक क्वालिटी का ग्लास मैन्युफैक्चर कर रहा है, तो वो पूरे 365 days नहीं करता है। उसका एक प्रोडक्शन साइकिल होता है। अकॉर्डिंग टू प्रोडक्शन साइकिल हम लोग को ग्लास प्रोडक्ष, अअअ जो उसका प्रोडक्शन साइकिल सप्लायर का होता है, उसके अकॉर्डिंग हम लोगो को सिक्योर करना होता है ग्लास।

Analyst probed about inventory management given import focus and raw material price volatility. Management explained their strategy of securing glass based on supplier production cycles rather than maintaining large inventories.

Asked by Agastya Dave

2 min read 6 chapters

Detailed narrative

Strong H2 FY25 Performance and Strategic Growth Initiatives

Agarwal Toughened Glass India Limited reported a total income of INR 68 crores for FY25, demonstrating robust growth and market presence. The company achieved an impressive EBITDA margin of 39.65% and a net profit margin of 26.02%, reflecting strong profitability and operational efficiency. This performance is a testament to the company's focus on innovation and execution, building on its over 35 years of industry expertise.

Capacity Expansion and Entry into Solar Glass

The company invested INR 24 crores in its third manufacturing facilities during FY25, enhancing production capacity with state-of-the-art tempering technology. This expansion is crucial for optimizing working capital and strengthening the balance sheet. Furthermore, Agarwal Toughened Glass is strategically diversifying into the solar glass segment, aligning with global sustainability trends and targeting high-growth export markets, aiming to become a key contributor to clean energy infrastructure.

Future Growth Outlook and Margin Targets

Management expressed confidence in achieving a 35-45% revenue CAGR over the next three years, supported by a projected EBITDA margin of 30-35%. This growth is expected to be driven by a strategic roadmap focused on operational discipline and innovation. The company plans to launch 15 new marketing offices across India to deepen market penetration and improve customer response, with a focus on untapped markets.

Working Capital Management and Raw Material Strategy

The company's working capital cycle is significantly impacted by the requirement for 100% advance payments to suppliers in the glass industry. To address this, IPO funds and bank loans have been utilized to fulfill working capital gaps, with short-term loans and advances increasing to INR 28 crores from INR 2 crores last year. Management indicated that they do not hedge against raw material price volatility, instead relying on high margins to absorb fluctuations. The strategy involves securing glass based on supplier production cycles rather than maintaining large inventories, especially for large projects.

Quality Control and Market Positioning

Agarwal Toughened Glass emphasizes stringent quality control, adhering to BIS guidelines and undergoing regular audits by major glass manufacturers like Saint-Gobain. This commitment ensures compliance and high product standards, particularly for high-performance safety glass. The company aims to expand its market share, currently strong in North India, with plans to penetrate South India and focus on value-added products like toughened glass, which is compulsory for high-rise buildings.

Employee Retention and Operational Automation

The company maintains a low employee turnover ratio, particularly for its skilled workforce, through continuous training and providing growth opportunities. In terms of operations, the existing plants are largely automated, including jumbo-sized facilities. The company is also exploring robotic and AI technologies to further enhance manufacturing facilities, aiming for improved efficiency and quality.

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