Chaman Lal Setia Exports Limited — Q4 FY26 earnings call

Call held 2 Jun 2026

Management summary

Chamanlal Setia reported a strong FY26 performance, declaring a dividend of INR 3 per share and achieving an increase in annual export volumes. The company capitalized on a 30% rise in rice prices by holding low-cost inventory. However, Q4 export volumes saw a 9% decline due to geopolitical disruptions affecting shipments, with some containers expected to be executed in Q1 FY27. Management expressed optimism for future growth through new customer acquisitions and e-commerce expansion.

Highlights

  • Dividend of INR 3 per share declared, reflecting strong performance for FY26.

  • Overall export volume increased from 1.73 lakh metric tons in FY25 to 1.77 lakh metric tons in FY26.

  • Company benefited from a 30% increase in rice prices from November to March, having procured inventory at lower prices.

  • New Saudi customer with significant buying capacity (2-2.5 lakh tons annually) is visiting, with potential to add 30,000-40,000 tons to business.

  • E-commerce sales are growing and the company is expanding its territories beyond Gurgaon/NCR.

Concerns

  • Q4 export volume decreased by 9% to 44,500 metric tons from 48,900 metric tons in the previous quarter, attributed to shipments stuck due to Iran/Red Sea issues.

  • Higher ocean freight and insurance costs due to Red Sea disruptions, though mostly passed through to buyers.

  • Potential impact of El Nino on future paddy crop size and prices, though it's premature to comment.

Key financials

3 periods

Headline

  • Dividend Per Share
    ₹3

Q4 FY26

  • Export Volume
    44,500 metric tons
    QoQ -9%

FY26

  • Export Volume
    1,77,000 metric tons
    YoY +2.3%

What they filed

Q1 FY27: revenue up 12.7%, net profit up 45.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue369 395 368 307 273 −26%431 +9%428 +16%346 +13%
EBITDA36 40 33 29 24 −33%51 +28%52 +58%44 +52%
Net profit27 29 25 22 19 −30%36 +24%38 +52%32 +45%
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.

Capital allocation

medium confidence
  • Dividend ₹3/share (final)
    The company has announced the dividend of INR 3 per share.
  • Liquidity Liquidity disclosed Management stated the company has 'large cash reserves' and 'funds' with 'no problem'.
    Gunit Singh: And please, please consider share buyback because we have large cash reserves... Rajeev Setia: Because company has funds. Company has no problem in we are going...

Guidance & targets

Market Expansion

  • Geographic Focus Market Expansion · going forward · High confidence USA and Europe
    In terms of increase, I think we will be focusing on USA and Europe going forward.

    — Ankit Setia

New Customer Volume

  • Potential Monthly/Quarterly Volume from Saudi Customer New Customer Volume · monthly, quarterly basis · Medium confidence 30,000-40,000 tons
    Okay. So, 30,000 - 40,000 tons on a monthly, quarterly basis.

    — Aman Soni

  • Share of Saudi Customer's Total Buying New Customer Volume · to begin with · Low confidence some part
    This company buys to about 2 lakhs Tons - 2.5 lakh Tons, already they are buying from India. So, they will share some part to begin with. The rest, it depends.

    — Rajeev Setia

New Units Capacity Utilization

  • Efficiency of New Units New Units Capacity Utilization · High confidence around 50%
    Regarding the efficiency, what you asked, they would be working at around 50% of their efficiency, normal efficiency.

    — Ankit Setia

New Units Sales Contribution

  • Sales per New Unit New Units Sales Contribution · a month · Medium confidence INR 15 crores to INR 20 crores
    One unit can give a sale of around; it should be around INR 15 crores to INR 20 crores a month.

    — Ankit Setia

Profitability Outlook

  • Future Quarter Performance Profitability Outlook · next quarters · Low confidence absolutely bright
    So, if during the war we can get such an export then why not, the next quarters also will be absolutely bright.

    — Ankit Setia

E-commerce Expansion

  • Territory Expansion E-commerce Expansion · High confidence expanding our territories
    Yes, Manish, we are expanding our territories, absolutely yes.

    — Ankit Setia

What to watch in Q1 FY27

New Saudi Customer Deal Finalization and Volume

next quarter
Current Customer visiting factory, potential 30,000-40,000 tons/month
Target Confirmation of deal and initial volume contribution in Q1/Q2 FY27

Why it matters

This new customer represents a significant growth opportunity and could materially impact future revenues and volumes.

Rajeev Setia: They are coming to visit our factory in Karnal and they are also going to our Gujarat unit. And I am confident now what they expect, they will get the quality and they will get our margins. And the turnover can come, the business of 30,000 - 40,000 tons can increase, in house.

Risks & concerns

  • Geopolitical disruptions (Iran war, Red Sea)

    medium

    War has affected export community, caused higher ocean freight/insurance, and led to some Q4 shipments being stuck, but extra charges are reimbursable by ECGC and Red Sea is open for some routes.

    Both acknowledged

  • Paddy price volatility / El Nino impact

    medium

    El Nino could affect crop size, but it's too early (May) to comment on the impact on paddy prices for the upcoming season (Oct-Nov).

    Both acknowledged

  • Export realization drop while paddy prices remain elevated

    medium

    Analyst raised concern about margin squeeze if export realizations fall while paddy prices stay high; management noted they benefited from low paddy prices in the past but did not directly address the future hypothetical.

    Analyst partial

Q&A highlights

3 direct, 1 evasive
Impact of Iran war/Red Sea disruption on volumes and realizations Partial
Yes, this effect is there, but you see the whole handling has come from the government also. Whatever the shipments we made prior to war, and we had to pay extra charges by ocean freight or war charges and so on and so forth. And ECGC has been mandated by the Government of India to help the exporters and whatever are our extra charges, we have filed the claim with ECGC. We will get that. That will be reimbursed to us.

Analyst questioned the impact of geopolitical events on the company's core business, and management clarified that extra charges are reimbursable and Red Sea routes are open for some destinations.

Asked by Gunit Singh

Sustainability of Q4 EBITDA margins given higher freight costs Evasive
Let's wait for the time. It's premature to say anything right now. Because the ocean freights are high, but business is happening. There is no stoppage of business. And always remember, whenever there is any war or any kind of disturbance, people don't go for luxuries, they go for essentials and particularly food. So, there is no problem.

Analyst sought forward-looking guidance on margin sustainability, but management deferred, citing market volatility and the essential nature of their product.

Asked by Gunit Singh

Impact of falling export realizations with elevated paddy prices on EBITDA margins Partial
Yes, this year, you know what happened? The prices of paddy were low. Farmer earns and sells in first two months. Till December, almost 80%, 90% of the paddy is sold out by the farmer and the prices were low. Consequently, the prices of rice were also low and truly speaking, as a businessman earn more, farmer didn't this time.

Analyst probed a critical margin risk scenario, and management explained the historical context of low paddy prices benefiting them, but did not directly address the hypothetical future scenario.

Asked by Tanya Kalra

Management's target working capital cycle vs current 190 days Partial
I think it is maximum 40 - 45 days. ... No, we will maintain. Why not? We can maintain it. Better, it will be better in the time to come.

Analyst highlighted a significant discrepancy between management's stated target and the current working capital cycle, with management indicating an intention to improve.

Asked by Tanya Kalra

Focus on adjacent categories/value-added exports vs. scaling branding business Direct
Well, as regard branding is concerned, we are right now branding outside India. We have our brand in around 40 - 45 countries and in some places, it's selling great and the name is also famous. Yes, Indian market is still we are through online sale through various portal is going on. But visibility is relatively less in India and that is our next target because company has funds.

Analyst inquired about strategic growth areas, and management confirmed a focus on expanding domestic branding and e-commerce, while also exploring new product categories like spices and rice puffs.

Asked by Tanya Kalra

Q4 export volume drop of 9% and its reasons Direct
This 9% drop, this is due to some of the shipments that were struck, in between, due to Iran or whatever this chapter was, that is why. ... if you see the press release, they have mentioned that a few containers were struck, which will get executed in Q1.

Analyst identified a specific decline in Q4 export volumes, and management attributed it directly to geopolitical disruptions, clarifying that these stuck shipments would contribute to Q1 FY27.

Asked by Pawan Kumar

Progress on quick commerce or e-commerce sales and profitability Direct
We have one unit in our Gurgaon office, only looking after e-commerce. So, I have met them personally, they are going very strong with all e-commerces. So yes, Maharani is coming up with e-commerce. If you look up for Maharani on Blinkit or Amazon in Gurgaon or nearby NCR, you will get it. ... Yes, Manish, we are expanding our territories, absolutely yes.

Analyst followed up on a prior discussion regarding e-commerce, and management confirmed strong growth and territorial expansion, indicating a positive shift in this channel.

Asked by Manish Kela

2 min read 6 chapters

Detailed narrative

FY26 Performance and Dividend Declaration

Chamanlal Setia reported a strong overall performance for the fiscal year ended March 31, 2026, leading to the announcement of a dividend of INR 3 per share. The company's annual export volume increased from 1.73 lakh metric tons in FY25 to 1.77 lakh metric tons in FY26, demonstrating consistent growth. Management expressed satisfaction with the year's results, attributing success to strategic inventory management.

Strategic Inventory and Pricing Gains

The company strategically procured paddy at low prices earlier in the season, which proved beneficial as rice prices subsequently increased by 30% from November to March. This foresight allowed Chamanlal Setia to achieve good gains. Management emphasized their deep industry experience and the Chairman's wisdom in building up significant inventory when prices were attractive, contributing to the strong profitability.

Geopolitical Impact and Mitigation

The Iran war and Red Sea disruptions had an impact on the export community, including Chamanlal Setia. While ocean freight and war-related charges increased, the company has filed claims with ECGC for reimbursement of extra costs. Q4 FY26 export volumes saw a 9% decline, from 48,900 metric tons in the previous quarter to 44,500 metric tons, primarily due to some shipments being stuck. These stuck containers are expected to be executed in Q1 FY27.

New Customer Acquisition and Market Expansion

Chamanlal Setia is actively pursuing new customer opportunities, including a significant Saudi Arabian importer that typically buys 2-2.5 lakh tons annually. This new customer is visiting the company's factories, with a potential to add 30,000-40,000 tons of business. The company is also focusing on expanding its market presence in USA and Europe and growing its e-commerce sales, which are currently strong in Gurgaon/NCR and are being expanded to new territories.

Operational Efficiency and Working Capital

The company has installed three new units, which are currently operating at approximately 50% efficiency. Each new unit is expected to contribute INR 15-20 crores in sales per month. While the current working capital cycle is around 190 days (60 days debtors, 140 days inventory), management aims to reduce this to a maximum of 40-45 days, indicating a focus on improving operational cash flow efficiency.

Future Outlook and Risks

Management expressed optimism for the upcoming quarters, expecting them to be 'absolutely bright' given current market conditions. However, they acknowledged the potential impact of El Nino on the future paddy crop size, though it is too early to provide specific forecasts. The company continues to adapt to market dynamics, including passing on higher freight costs to buyers, ensuring business continuity despite external challenges.

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