ECOLINE

Ecoline Exim Limited reported a stable H1 FY26 with a revenue of INR 143.84 crores, an EBITDA of INR 19.66 crores (14.12% margin), and a PAT of INR 12.91 crores (9.27% margin). The company achieved an 8-9% YoY revenue growth in H1. Notably, operating cash flow turned positive at INR 56.17 lakh, a significant improvement from a negative position in the prior period, reflecting better working capital management.

The company is executing a multi-layer capacity expansion plan. Factory 4 in Badu, West Bengal, adding 12 million units annually, is expected to be operational in Q4 FY26. A new workshop in Calcutta, adding 8 million units, will be operational by December 2025. Construction for Factory 5 in Ahmedabad, which will add 40 million units and in-house weaving capacity, will begin in December 2025 with trial production by January 2027. These expansions aim to increase total capacity from 45 million units in FY25 to 65.5 million units in FY26 and 105 million units by FY28.

Ecoline's current confirmed order book stands at INR 101.89 crores, with order inflow growing by 20% compared to the last financial year. The company is experiencing strong market traction, with orders from the USA jumping by 25% and Japan by over 55%. Additionally, Ecoline has secured first-time orders from Latin American countries, indicating successful geographic diversification. The order book provides visibility for approximately three to three and a half months of execution.

For FY26, Ecoline projects a turnover of approximately INR 320 crores and a PAT of INR 22-24 crores, with a PAT margin of 9.7-10% and an EBITDA margin of 14-15%. Looking further ahead, the company targets a PAT margin of 11-12% in FY27-28, with revenue expected to reach INR 380-390 crores in FY27 and INR 600+ crores by FY29, driven by expanded manufacturing scale and entry into high-value product categories.

Ecoline Exim Limited maintains an effectively debt-free status, relying on internal accruals and IPO proceeds to fund its significant capex plans. The estimated capex for Factory 5 in Ahmedabad is INR 65-70 crores, and for the Calcutta workshop, it is around INR 10 crores. Management explicitly stated no plans to take on new debt for these expansions, leveraging existing fixed deposits and reserves for capital expenditure.

Raw material costs constitute about 54% of revenue. The company manages raw material price volatility through long-term agreements with 10-15 key suppliers, who account for 80% of purchases. Approximately 96-97% of raw materials are sourced from India, reducing dependence on international markets. The working capital cycle has extended to 60 days due to shipping delays, which the company is actively working to optimize through better payment terms, supplier credit, and reduced production lead times.