Cello World — Q4 FY25 earnings call

Call held 26 May 2025

Management summary

Cello World delivered a strong finish to FY25 with record quarterly revenues, despite a challenging macro environment. The company is successfully pivoting toward in-house manufacturing for glassware and steel bottles to capitalize on regulatory changes (BIS norms). While margins may face a temporary 100bps headwind in FY26 due to the ramp-up of new facilities, the long-term growth trajectory remains robust across its core Consumerware and Writing Instruments segments.

Highlights

  • Revenue for Q4 FY25 reached ₹589 crores, representing a 15% YoY growth.

  • Full-year FY25 revenue stood at ₹2,136 crores, up 7% YoY.

  • Q4 EBITDA margin was reported at 25%, while full-year EBITDA margin remained healthy at 26%.

  • Consumerware segment grew 24% YoY in Q4, driven by strong demand in hydration and glassware.

  • New glassware plant commissioned in February 2025, contributing ₹20 crores in its first two months.

  • Management guided for 12-15% overall revenue growth in FY26.

  • BIS norms for stainless steel bottles have eliminated unorganized Chinese imports, creating a massive domestic opportunity.

  • Net debt-free status achieved as of March 2025, with a net cash position on the balance sheet.

Key financials

  1. Revenue ₹589 Cr +15%YoY
  2. EBITDA Margin 25%
  3. PAT ₹88 Cr
  4. Full Year Revenue ₹2,136 Cr +7%YoY
  5. Full Year PAT ₹339 Cr

What they filed

Q1 FY27: revenue down 0.4%, net profit down 9.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue490 557 589 529 587 +20%554 −1%654 +11%527 −0%
EBITDA119 127 135 109 128 +8%106 −17%129 −4%99 −9%
Net profit87 92 96 81 91 +5%69 −25%90 −6%73 −10%
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.

Segment breakdown

SegmentRevenue ContributionGross MarginQ4 Growth
Consumerware69%53%24%
Writing Instruments13%58%—
Moulded Furniture & Allied18%42%8%

Guidance & targets

Revenue

  • Overall Company Revenue Growth Revenue · FY26 · High confidence 12-15%
    But we still expect about a good 12% to 15% kind of growth in the next coming year... this is for the overall company.

    — Gaurav Rathod, Joint Managing Director

  • Glassware Revenue Revenue · FY26 · High confidence ₹450-475 crores
    So I think for the financial year '26, our aim is to reach about INR450 crores, INR475 crores, around that figure, which will exhaust our glassware capacity by about 65% to 70%.

    — Gaurav Rathod, Joint Managing Director

Margin

  • EBITDA Margin Impact Margin · FY26 · Medium confidence 1 percentage point hit
    I guided that the profitability could take a percentage point hit for the year [due to glassware stabilization].

    — Gaurav Rathod, Joint Managing Director

Capex

  • Planned Capital Expenditure Capex · FY26 · High confidence ₹100 crores
    Going ahead, for financial year 2026, we expect to do a capex of around INR100 crores.

    — Atul Parolia, CFO

Capacity

  • Opalware Revenue Potential Capacity · at full capacity · High confidence ₹400-425 crores
    So at full capacity, we are looking at about INR400 crores, INR425 crores of revenues that can be generated out of this plant.

    — Gaurav Rathod, Joint Managing Director

Risks & concerns

  • Export Demand Slowdown

    medium

    Writing instruments segment revenue from exports fell from ₹87 crores to ₹78 crores YoY.

    Management acknowledged

  • Short-term Stockouts in Steel Bottles

    medium

    BIS implementation and the ban on Chinese imports may cause temporary supply gaps until the in-house facility is ready in 4-5 months.

    Management acknowledged

  • Glassware Plant Efficiency

    low

    Currently operating at 55% efficiency; aiming for 75% in the next 2-3 months.

    Management acknowledged

Areas of evasion (1)

  • Refused to disclose specific FY25 revenue numbers for the Glassware segment separately.

Q&A highlights

3 direct
Glassware Revenue Contribution Direct
So it's a INR20 crores turnover, basically because the plant got commissioned in February... net-net, it's a INR10 crores increase.

Clarifies the immediate impact of the new glassware facility and the extent of import substitution.

Asked by Percy Panthaki

BIS Norms and Stainless Steel Bottles Direct
Top 3 players put together would be about 35%, 40% of the business and the rest was unorganized... there is significant gains in the long term that we can expect.

Highlights a major regulatory tailwind that could lead to significant market share gains from the unorganized sector.

Asked by Ankur Sharma

EBITDA Margin Guidance for FY26 Direct
EBITDA margins... would be subdued because of the glassware itself because glassware in the first year... takes a little time to stabilize.

Sets realistic expectations for near-term profitability as the company ramps up new, lower-efficiency manufacturing capacity.

Asked by Aniruddha Joshi

2 min read 5 chapters

Detailed narrative

Glassware Expansion and Import Substitution

Cello's new glassware facility, commissioned in February 2025, is a central pillar of its growth strategy. In its first two months, it generated ₹20 crores in revenue, with ₹10 crores representing a net increase over previous import-based sales. Management targets ₹450-475 crores in glassware revenue for FY26, aiming to reach 75% efficiency within three months. This shift to in-house manufacturing is expected to maintain margins similar to imports while providing better control over quality and supply.

BIS Regulatory Tailwinds in Steel Bottles

The implementation of BIS norms for stainless steel vacuum flasks has fundamentally altered the competitive landscape by banning unorganized imports from China. Management estimates that the unorganized sector previously held 60-65% of the market. Cello is building its own manufacturing facility in Rajasthan, expected to be operational in 4-5 months, to capture this vacuum. While short-term stockouts are possible, the long-term opportunity for market share consolidation among top brands is significant.

Writing Instruments: Export Drag vs. Domestic Resilience

The Writing Instruments vertical faced headwinds due to a global export slowdown, with segment revenue dipping to ₹78 crores from ₹87 crores YoY. However, domestic demand remains stable, and the company is diversifying its 'Unomax' brand into art-related products and geometry boxes. Management expects the export market to recover in the second half of FY26 and is aggressively adding new countries to its distribution network to mitigate regional demand fluctuations.

Strategic Channel Shift to Quick Commerce

Cello is proactively adapting to a major shift in consumer behavior toward e-commerce and quick commerce. Online sales grew by 2 percentage points as a share of total revenue this year. The company has tied up with most major quick commerce players and is differentiating its product lines between online and offline channels to maintain margin parity. Management expects alternative channels to gain 2 percentage points of share annually over the next few years.

Margin Outlook and Operational Efficiency

While the company maintains a healthy 25-26% EBITDA margin, management cautioned that FY26 margins might see a 100bps compression due to the 'learning curve' of the new glassware plant. Currently operating at 55% efficiency, the facility needs to stabilize before contributing fully to profitability. Despite this, the company remains net debt-free and expects to generate strong cash flows, with a planned capex of ₹100 crores for FY26 focused on the new steel bottle facility.

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