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Ganesh Consumer Products Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Ganesh Consumer Products Limited delivered a strong Q2 FY26, achieving significant growth in revenue, EBITDA, and PAT, alongside substantial margin expansion. The company strategically reduced debt and declared an interim dividend, while also outlining plans for geographical expansion and long-term margin improvement. Despite softer Sattu sales, other categories and e-commerce showed robust growth, and management expressed confidence in maintaining profitability through strategic inventory management and operational efficiencies.

Highlights

Revenue from operations grew 7.2% YoY to INR238.7 crores in Q2 FY26, and 17.6% sequentially.
EBITDA increased 24.7% YoY to INR23.9 crores, with margins improving 140 bps to 10%.
PAT for Q2 FY26 grew 17.3% YoY to INR11 crores, and H1 PAT reached INR20.7 crores.
Gross margin expanded 350 bps to 26% in Q2 FY26, driven by improved realizations and strategic sourcing.
Debt of INR97 crores was repaid, reducing current gross debt to approximately INR70 crores, with a target of zero debt by FY26 end.

Concerns

Sattu experienced softer growth in Q2 FY26 due to a shorter summer season.
H1 FY26 revenue growth of 7.1% YoY was below the historical CAGR of over 18% (FY22-FY25).
Inventory increased approximately three times compared to March numbers, leading to higher interest costs of INR10-11 crores in H1 FY26 compared to INR5-7 crores last year.

Key financials

2 periods

Headline

Revenue
₹238.7 Cr
YoY +7.2% QoQ +17.6%
Gross Margin
26%
EBITDA
₹23.9 Cr
YoY +24.7%
EBITDA Margin
10%
PAT
₹11 Cr
YoY +17.3%

H1

Revenue
₹441.6 Cr
YoY +7.1%
PAT
₹20.7 Cr

What they filed

Q1 FY27: revenue down 6.9%, net profit up 30.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	223	218	220	203	239 +7%	212 −3%	218 −1%	189 −7%
Expenses	204	201	207	182	215	189	201	168
EBITDA	19	17	13	21	24 +26%	23 +35%	18 +38%	21 +0%
Margin	9%	8%	6%	10%	10%	11%	8%	11%
Other income	1	1	1	1	1	1	2	2
Interest	2	1	2	4	4	2	1	1
Depreciation	6	6	6	6	6	6	6	5
Profit before tax	13	11	6	13	15 +15%	16 +45%	13 +117%	17 +31%
Tax rate	26%	27%	26%	26%	25%	25%	26%	25%
Net profit	9	8	5	10	11 +22%	12 +50%	10 +100%	13 +30%
EPS	2.61	2.15	1.26	2.62	2.75	3.02	2.36	3.10

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

Atta (Wheat Flour)
33% Revenue Share35% Revenue Share17% H1 Volume Growth₹117 Cr H1 Revenue
Value-Added Products (Maida, Sooji, Dalia, Besan, Sattu)
60% Revenue Share₹200 Cr H1 Revenue
Emerging Products (Spices, Ethnic Flour)
5% Revenue Share7% Revenue Share
Spices
23% Q2 YoY Growth₹16 Cr H1 Revenue₹17 Cr H1 Revenue20% Gross Margin (Current)
B2C
29% Q2 Gross Margin78% H1 Revenue Share10.1% H1 Volume Growth (excl. Sattu)
B2B
3% Q2 Gross Margin22% H1 Revenue Share₹97 Cr H1 Revenue
B2C Staples (excl. Sattu)
15.4% Value Growth6.4% Volume Growth
E-commerce and Quick-commerce
97% YoY Growth
Overall (incl. Sattu)
7% H1 Volume Growth7.5% H1 Volume Growth

Capital allocation

high confidence

Capex Capex disclosed
- Strengthen working capital, optimize production capacities, expand distribution reach, and invest in brand-building initiatives ₹130 Cr
- Backward integration of Besan and Sattu manufacturing
- Agra manufacturing facility for Atta
The fresh issue of INR130 crores raised through the IPO is being strategically utilized to strengthen working capital, optimize production capacities, expand distribution reach, and invest in brand-building initiatives.
Debt Gross ₹70 Cr
- Repayment INR60 crores from IPO proceeds and INR37 crores via promoter Group Holdings repayment (inter-corporate loans). ₹97 Cr
So, currently, if you ask me, the loan amount is close to INR58 crores in the book as of now, as of today. And going forward, we feel by the end of this financial year, the debt levels will be zero and the interest in line with -- as we have repaid the loan, the interest will also go down in the coming quarters.
Dividend ₹2.5/share (interim) Payout ratio 25%

Further, as a part of our commitment to rewarding shareholders, the Board has declared an interim dividend of INR2.5 per share and approved a revised dividend policy with a payout ratio of 25%-50% aligning with our strong cash generation and prudent capital allocation.

Guidance & targets

Revenue

Annual Revenue Growth Rate Revenue · FY26 · High confidence 12-15%

So we feel that we'll be able to have an annual growth rate of 12% to 15% this year.

— Amit Tapadia
Revenue Growth Rate Revenue · beyond FY26 · High confidence 15-20%

going forward, we will maintain a growth rate of around 15% to 20% on the revenue side.

— Amit Tapadia

Margin

EBITDA Margin Margin · beyond FY26 · High confidence 9.5-11%

And on the EBITDA side, we feel that anywhere between 9.5% to 11% we'll be able to deliver.

— Amit Tapadia
B2C Gross Margin Margin · FY26 · High confidence 28-29%

So, the focus is on the B2C category and we are hopeful that we'll be able to drive home a gross margin of close to 28% to 29% in the complete financial year FY '26.

— Amit Tapadia

Profitability

PAT Margin Profitability · H2 FY26 · High confidence 4.5-5%

we look forward to have the same margins in the range of 4.5% to 5% in the coming two quarters.

— Manish Mimani

Debt

Debt Levels Debt · end of FY26 · High confidence Zero

by the end of this financial year, the debt levels will be zero

— Amit Tapadia

Shareholder Returns

Dividend Payout Ratio Shareholder Returns · Ongoing · High confidence 25-50%

the Board has declared an interim dividend of INR2.5 per share and approved a revised dividend policy with a payout ratio of 25%-50% aligning with our strong cash generation and prudent capital allocation.

— Amit Tapadia

Spices Category

Spices Revenue Spices Category · couple of years · High confidence INR100 crores

we feel we will be able to have a revenue of close to INR 100 crores on the spices category at a gross margin of close to 30% and 35%.

— Amit Tapadia
Spices Gross Margin Spices Category · couple of years · High confidence 30-35%

— Amit Tapadia

Operating Margins

Operating Margins Operating Margins · by FY28 · High confidence 10-11%

So, in the journey, in another couple of years, we look forward to have a data margin of 10% to 11%, the band of 10% to 11%.

— Manish Mimani

Sustainability

Power Cost Reduction Sustainability · from FY27 · High confidence INR0.65 million annually

This initiative will not only reduce our carbon footprint, but also lower power costs by approximately 0.65 million annually from financial year 2027.

— Manish Mimani

What to watch in Q3 FY26

Agra Facility Commissioning

Q3 FY26

Current Under construction, due to be done in November

Target Commercial operations and catering to Bihar/Northeast

Why it matters

Key for geographical expansion and improving logistics/supply chain efficiency in new markets.

Agra manufacturing facility on Atta site, which is due to be done in this November itself.

Risks & concerns

Raw Material Price Volatility
medium

Sharp increases in wheat and gram prices (>20-25%) in H2 FY25 led to lower margins. Current bulk procurement strategy aims to mitigate this for FY26.

Management acknowledged
Competitive Intensity
medium

New entrants like Emami, Patanjali, Fortune, and Parle-G have launched similar products. Company is using marketing initiatives and schemes to maintain market share.

Management acknowledged
Sattu Sales Seasonality
low

Shorter summer season impacted Sattu sales in Q2 FY26. Management expects recovery as seasonal patterns normalize and it's not a winter product.

Management acknowledged

Q&A highlights

7 direct

Inventory Increase and Interest Cost Direct

So, our inventory level increased as compared to the March numbers, because the inventory of raw materials, which includes wheat, gram and spices were increased. We have to consider a couple of things here. In the previous year, the prices of wheat and gram had increased close to 25%. Now, considering the sharp price increase in the previous year, we as a strategy, we decided that we will buy bulk of the overall annual requirement in the first half of the financial year, which resulted in increase in the inventories of raw materials.

Analyst questioned the significant inventory build-up and its impact on interest costs, to which management explained it as a strategic move to hedge against price volatility and ensure supply.

Asked by Tanmay Jhaveri

Spices Category Growth and Profitability Direct

So, in spices category, in quarter one, we have grown at close to 70%, 68%-70% because of the lower base in the previous financial year. And in this quarter, which is Q2 of this financial year, we have grown at close to 23%. Yes. ... we feel we will be able to have a revenue of close to INR 100 crores on the spices category at a gross margin of close to 30% and 35%.

Analyst sought clarity on the performance and long-term margin potential of the new spices category, which management outlined with specific revenue and gross margin targets.

Asked by Bhargav

H2 FY26 Margin Outlook Direct

So the operating margin, as we said, the gross margin has improved for us in the first half of this financial year. And we feel that we will be able to maintain a similar gross margin in the next two quarters. ... So, going forward, we feel that our operational margin will be in line with our Q1 and Q2 numbers of this financial year.

Analyst questioned if H2 margins would align with H1, given last year's H2 compression, and management confirmed expectations of similar margins due to strategic inventory and operational benefits.

Asked by Pritesh Chheda

Long-term Operating Margin Drivers Direct

So, in the journey, in another couple of years, we look forward to have a data margin of 10% to 11%, the band of 10% to 11%. And I think it will be a mix of three, four factors. Primarily, number one, with the advantage of factories near to farm... Second, of course, on the pricing discipline... And the third, as the revenue grows, and the penetration of the geography grows... And last but not the least, more the revenue grow on the spices in the coming years.

Analyst probed the key drivers for achieving the 10-11% operating margin target by FY28, leading management to detail strategic advantages and growth levers.

Asked by Ankit

Geographical Diversification Strategy Direct

So, we are targeting to complete and to start manufacturing Atta from Agra from the month of November, wherein which will help us to cater to the market of Bihar and Northeast. Our sales team are already working on ground in Bihar and Northeast to onboard new distributors and CNF agents.

Analyst highlighted the high revenue concentration in West Bengal and management provided a clear strategy for expansion into Bihar, Northeast, Jharkhand, and Odisha, leveraging new facilities.

Asked by Naman Maheshwari

B2C vs B2B Margins Direct

So, the continued focus of the organization is on the package class segment, which we call it as B2C segment. Now, B2B includes sale of by-products and co-products... So, the B2C gross margin for this quarter is close to 29% and the B2B margin is close to 3%.

Analyst sought a breakdown of margins between B2C and B2B segments, revealing the company's focus on the significantly higher-margin B2C business.

Asked by Vijay Jangir

Sattu Performance and Seasonality Direct

While Sattu saw softer growth due to a shorter summer season, we remain confident of recovery as seasonal patterns normalize.

Analyst inquired about the softer growth in Sattu, and management attributed it to seasonal factors, expressing confidence in its recovery.

Asked by Manish Mimani

3 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance and H1 Overview

Ganesh Consumer Products Limited delivered a robust Q2 FY26, marking one of its highest quarterly performances. Revenue from operations stood at INR238.7 crores, reflecting a 7.2% year-on-year and 17.6% sequential growth. For the first half of FY26, revenue grew 7.1% year-on-year to INR441.6 crores. Profitability also saw significant improvement, with EBITDA growing 24.7% year-on-year to INR23.9 crores, and PAT increasing 17.3% to INR11 crores for the quarter.

Margin Expansion and Strategic Sourcing

The company achieved a notable gross margin expansion of 350 basis points, reaching 26% in Q2 FY26, with a value of INR62.1 crores. EBITDA margins also improved by 140 basis points to 10%. This margin improvement was primarily driven by better realizations across product categories and a strategic decision to procure raw materials in bulk during H1 FY26. This bulk procurement strategy was adopted to mitigate the impact of sharp raw material price increases observed in the previous year and ensure consistent supply and healthy margins for the upcoming quarters.

Debt Reduction and Capital Allocation

Post its successful IPO, Ganesh Consumer Products Limited took decisive steps to strengthen its balance sheet by repaying INR97 crores of debt, comprising INR60 crores from IPO proceeds and INR37 crores from promoter group repayment. This reduced the current gross debt to approximately INR70 crores (INR58 crores short-term, INR12 crores long-term), with a target to achieve zero debt by the end of FY26. The board also approved a new dividend policy with a payout ratio of 25%-50%, and an interim dividend of INR2.5 per share was declared.

Geographical Expansion & New Facilities

To reduce its reliance on West Bengal (which currently accounts for ~93% of revenue) and expand its market reach, the company is focusing on deeper penetration in Eastern India. The new Agra manufacturing facility, set to become active in November, will specifically cater to the Bihar and Northeast markets. Sales teams are already on the ground in these regions to onboard new distributors, with increased penetration expected from Q3 FY26. The company is also actively marketing in Jharkhand and Odisha, its second and third largest markets after West Bengal.

Category Performance and Growth Drivers

The company's performance was broad-based across categories. B2C staples (excluding Sattu) grew 15.4% in value and 6.4% in volume, while the spices category, an emerging segment, registered a 23% year-on-year growth. E-commerce and quick-commerce channels showed exceptional growth of 97% year-on-year. While Sattu experienced softer growth in Q2 due to a shorter summer season, management expects recovery as seasonal patterns normalize, and other categories are expected to maintain their strong growth trajectory.

Long-term Vision and Margin Targets

Ganesh Consumer Products aims for a 15-20% revenue growth rate beyond FY26 and targets a sustainable EBITDA margin of 9.5-11%. For the emerging spices category, the company projects achieving INR100 crores in revenue within a couple of years with a gross margin of 30-35%. Key drivers for long-term operating margin expansion include strategic plant locations near raw material sources, disciplined pricing, continued revenue growth, and deeper geographical penetration.

This is an AI-generated summary of a publicly available earnings call transcript.

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