Krishca Strapp. — Q2 FY26 earnings call

Call held 28 Nov 2025

Management summary

Krishca Strapping Solutions reported strong H1 FY26 results with significant revenue and EBITDA growth, driven by disciplined operations and strategic capital deployment. The company is progressing with its cold rolling mill and new Vajra Alloys subsidiary, aiming for a shift towards technology-driven packaging solutions and specialty steel. While the order book remains healthy, export performance faced headwinds due to pricing pressure, and the company is focused on improving its working capital cycle.

Highlights

  • Standalone total income for H1 FY26 reached 92.7 crores, marking 45% year-on-year growth.

  • EBITDA expanded almost 58% year-on-year to 15 crores, and PAT improved to 6.18 crores.

  • Current order book is over 180 crore with execution timelines between 1 to 5 years, including a confirmed packing contract order worth 75 crore for the next financial year.

  • The cold rolling complex in Chennai is approaching commissioning, expected to fundamentally expand scale capability and addressable market.

  • Board approval for Vajra Alloys, a new subsidiary focused on Super Alloys and high-performance materials, marking an entry into premium material segments.

Concerns

  • Exports declined in H1 FY26 to 8.8 crores from over 20 crores in the previous year, primarily due to margin pressure and Chinese penetration in the Middle East.

  • The working capital cycle is currently long at 120 days, with a target to reduce it to less than 45 days over the next three years.

  • Shift to shorter-term contracts (1-year vs. 5-year) introduces volatility and is subject to current steel price fluctuations.

Key financials

  1. Total Income ₹92.7 Cr +45%YoY
  2. EBITDA ₹15 Cr +58%YoY
  3. PAT ₹6.18 Cr
  4. EBITDA Margin 16%
  5. PAT Margin 7%

What they filed

Q4 FY26: revenue up 147.4%, net profit down 37.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue48 57 64 86 93 +94%141 +147%
EBITDA8 12 9 13 15 +88%14 +17%
Net profit6 8 5 6 6 +0%5 −37%
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

Share of Revenue
₹175.8 Cr Total
  • Domestic Revenue ₹84 Cr 47.8%
  • Direct Supply (Strapping & Primary Packaging) ₹53 Cr 30.1%
  • Packing Contract Revenue ₹30 Cr 17.1%
  • Export Revenue ₹8.8 Cr 5.0%

Order book

high confidence

Total value

₹180 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹25 Cr

Execution

execution timelines between 1 to 5 years

Composition

Mix 2 client types
  • Vedanta (next FY expectation) ₹35 Cr 63.6%
  • APL & other big packing contracts (individual expectation) ₹20 Cr 36.4%

Share of order book by client type, derived from disclosed amounts

Pipeline

qualified rfp

Orders in participation

The company has a healthy order book with multi-year contracts, and a strong pipeline, with a historical conversion rate of 20-30%.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex Capex disclosed Cold Rolling Mill funded by internal accruals; Vajra Alloys funded by a mix of debt and limited strategy fundraise.
    • Cold Rolling Mill ₹100 Cr
    • Vajra Alloys (new subsidiary) ₹7 Cr
    • Desiccant Manufacturing Plant ₹2 Cr
    we are currently doing here 100 crore plus CapEx to set up a cold rolling mill... We are doing a close to some 7 Cr. investment in this new subsidiary. And this funding will be supported at the subsidiary level with the mix of debt and some very limited strategy fundraise... we are setting up a desiccant manufacturing plant with a 2 crore investment
  • Debt Debt disclosed
    this funding will be supported at the subsidiary level with the mix of debt and some very limited strategy fundraise.
  • Liquidity Liquidity disclosed Positive cash flow is expected from the second half of next year, despite potential negative free cash flow in the peak CapEx period of the first two quarters of next year.
    our internal plan is to maintain a positive cash flow over the next 3 years even though we used in CR Mill on Vajra, see free cash flow maybe in in the peak of CapEx might be negative next year, in the first two quarters. But overall, the you know cash flow should be positive maybe from the second-half of next year.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence minimum 25%
    Ma'am, last year we committed 25% revenue for this financial year. So, we are sticking to that minimum 25% year on year growth will be there.

    — BALAMANIKANDAN

  • Steel Vertical Revenue Growth Revenue · next 5 years · High confidence 40-45%
    it is very possible to have a much higher revenue growth in the steel vertical and we are definitely confident of, you know, overachieving whatever we had done in the past, which is close to 40-45% year on year in the next 5 years.

    — BALAMANIKANDAN

  • Additional Revenue from Cold Rolling Mill Revenue · FY27 · High confidence 150-200 crores
    So certainly we are expecting over minimum 150 crore additional revenue from the CRM in a best-case scenario even we can do 200 crore plus also. But for now, at least 150, we are very positive of crossing.

    — BALAMANIKANDAN

  • Desiccant Sales Revenue · 3rd or 4th year · Medium confidence 20-25 crores
    You know the revenue from the desiccant production line that would be, you know, up to 20-25 CR, maybe in the third year or fourth year.

    — BALAMANIKANDAN

Capacity

  • Cold Rolling Mill Capacity Utilization Capacity · FY27 · High confidence 20%
    in the first year we are expecting at least 20% appreciation overall because only 9 months we'll be running by, and average 20%

    — BALAMANIKANDAN

  • Cold Rolling Mill Capacity Utilization Capacity · FY28 · High confidence 50%
    and in the second year at least we want to do 50% capacity utilization.

    — BALAMANIKANDAN

Profitability

  • Sustainable EBITDA Margin Profitability · long-term · High confidence 13-15%

    Previously 13-17% → 13-15%

    H2 see like we always committed it will be in the range of 13 to 15%. That is our long-term sustainable EBITDA. So 13 - 14% it will be in that range.

    — BALAMANIKANDAN

  • Export EBITDA Margin Profitability · High confidence 10-12%
    The EBITDA will be in the range of 10 to 12% only in the exports.

    — BALAMANIKANDAN

Working Capital

  • Receivable Days Working Capital · next 3 years · High confidence <45 days

    From 120 days today

    I wanted to reduce it less than 45 days in the future. The over next three years that is our internal target to. Currently it is 120 days, right?

    — BALAMANIKANDAN

What to watch in Q3 FY26

Cold Rolling Mill Production Start and Revenue Contribution

next quarter
Current Approaching commissioning, production starting end of May
Target Confirmation of production start and initial revenue contribution

Why it matters

The CRM is a key growth driver, and its operationalization and revenue generation are crucial for achieving FY27 targets.

We are starting the production maybe from end of May based on the current timelines. So certainly we are expecting over minimum 150 crore additional revenue from the CRM in a best-case scenario even we can do 200 crore plus also.

Risks & concerns

  • Export Market Competition and Pricing Pressure

    high

    Exports declined in H1 due to margin pressure from Chinese penetration and higher Indian steel prices compared to international markets, making it difficult to compete on volume.

    margin pressure in the Middle East a lot of Chinese penetration is there in the last two years, that's why we also slowed down our exports... our Indian steel pricing, there's a medium carbon steel price is always higher compared to the international market that is restricting us to do more volume.

    Management acknowledged

  • Volatility of Short-Term Contracts

    medium

    Management acknowledged that short-term orders are volatile and subject to current steel price fluctuations, unlike more stable long-term contracts.

    So short term orders are always volatile subject to the you know current steel price fluctuation.

    Analyst acknowledged

  • Long Working Capital Cycle

    medium

    Current receivable days are 120, which management aims to reduce to less than 45 days over the next three years.

    Currently it is 120 days, right? So we wanted to bring it less than 45 days.

    Management acknowledged

  • Equity Dilution

    low

    Analyst raised concern about potential equity dilution for capex, but management stated no further significant dilution is expected, and internal accruals will fund future capex.

    I understand your concern. We don't expect or foresee any further equity dilution in the near future and we are very confident that the revenue what we're expecting from the new cold rolling mill and the internal accurals from the project will be enough to, you know, provide enough capital for our upcoming Capex plan

    Analyst downplayed

Q&A highlights

7 direct
Equity Dilution for Capex Direct
I understand your concern. We don't expect or foresee any further equity dilution in the near future and we are very confident that the revenue what we're expecting from the new cold rolling mill and the internal accurals from the project will be enough to, you know, provide enough capital for our upcoming Capex plan and we wanted to avoid any further dilution and at the same time, we're open to you know if any good opportunity comes up.

Addresses investor concern about potential equity dilution to fund significant capex, with management assuring no further dilution and self-funding through internal accruals and CRM revenue.

Asked by Rishabh Tripathi

Vajra Alloys Strategy and Market Positioning Direct
Our plan is to 1st focus on the industrial and commercial application where the criticality is very less. So, we identified a close to 1000 Cr. plus market and grades and the product mix. We also approached various customers over the past six months. So, based on their, you know confidence we got from the market only we are resetting up the facilities.

Clarifies the strategic entry into the Super Alloys segment, detailing the initial focus on less critical commercial applications and the identified market size, rather than immediate entry into defense/aerospace.

Asked by Rishabh Tripathi

Bid Pipeline Reduction from 750 Cr to 150 Cr Direct
The thing is there is a big order from Vedanta, it's 107 CR, but they're given the PO for only the first year. They're not given the entire five-year PO, they're telling every year PO will be given. So we, but we have taken only the 25 Cr. worth of orders in the you know confirmed order book we are you know disclosing in the public space. So that's why I'm saying that 180 Cr. plus orders already we have over the next 5 years.

Resolves a perceived discrepancy in the bid pipeline, explaining that large multi-year orders are recognized annually, and the 150 Cr refers to new orders in the pipeline, not a reduction in the overall opportunity.

Asked by Amitabh Vatsya

Shift from Long-Term to Short-Term Contracts Direct
In the long-term perspective, it is always better to have a more packing contracts with the you know, 2 to 3 years or 5 years timeline. It uses stability, you know to plan the different grades of products or other product items... So short term orders are always volatile subject to the you know current steel price fluctuation.

Highlights the trade-off between stability of long-term contracts and the volatility of short-term orders, particularly concerning raw material price fluctuations.

Asked by Amitabh Vatsya

Confidence in Specialty Steel Segment Direct
Firstly, we have a captive consumption of over 1500 tonnes... we have a good captive conception out of 5000 tonnes of capacity... we have taken expert people in the industry with over 30 years experience in the Stainless Steel and high carbon steel.

Provides the rationale behind management's confidence in entering and succeeding in the specialty steel segment, citing captive consumption, existing capacity, and experienced personnel.

Asked by Awasthi Varun

PLI Scheme Application for Specialty Steel Direct
Yes, we have plans. In fact, our current cold rolling mill it is exactly falling into the one of the items mentioned in the PLS team. We are working on it. We are planning to apply for that for the cold rolling mill. Even Superalloys also mentioned. We are still analysing whether to apply for the Superalloys, because there is a minimum 50 crore investment criteria.

Indicates the company's intent to leverage government incentives (PLI scheme) for its new cold rolling mill and potentially for the Superalloys business, which could enhance profitability and competitiveness.

Asked by Awasthi Varun

Working Capital Improvement with New Projects Direct
Definitely going forward, there will be a drop in looking up till cycle one is the CR business is the cash and carry business... I'm expecting close to some 6-7 crores of inventory will be freed up.

Explains how the new cold rolling mill, being a cash-and-carry business, is expected to significantly improve the working capital cycle and free up inventory.

Asked by Ruchi

3 min read 8 chapters

Detailed narrative

H1 FY26 Performance Highlights

Krishca Strapping Solutions Limited delivered a strong H1 FY26, with standalone total income reaching 92.7 crores, marking a 45% year-on-year growth. EBITDA expanded by 58% year-on-year to 15 crores, and PAT improved to 6.18 crores. The company's H1 EBITDA margin stood at 16%, with a PAT margin of approximately 7%.

Strategic Shift Towards Technology-Driven Solutions and Specialty Steel

The company is undergoing a strategic transition from a high-quality product manufacturer to a full-scale technology-driven packaging solutions company, with a strong focus on specialty steel. This shift is underpinned by the commissioning of a cold rolling complex and the establishment of a new subsidiary, Vajra Alloys, for super alloys. Management aims for a much higher revenue growth of 40-45% year-on-year in the steel vertical over the next 5 years.

Cold Rolling Mill Project and Capacity Expansion

The cold rolling complex in Chennai, a project with over 100 crore capex, is nearing commissioning, with production expected to start by the end of May. This facility will manufacture thin precision gauge stainless steel and high carbon strips. It is projected to contribute an additional 150-200 crores in revenue in FY27, with capacity utilization targeted at 20% in FY27 and 50% in FY28.

Vajra Alloys: Entry into Super Alloys

Krishca has approved the establishment of Vajra Alloys, a new subsidiary with a 7 crore investment, to focus on Super Alloys and high-performance materials. This strategic move aims to capture a 1000 Cr+ market, initially targeting commercial and industrial applications before expanding into defense and aerospace segments. The project is progressing with commissioning phases expected in the coming months.

Packaging Contract Business and Order Book

The packaging contract business continues to scale impressively, contributing approximately 30 crores to H1 domestic revenue. The current order book stands at over 180 crore, executable over 1 to 5 years, with a confirmed 75 crore packing contract order for the next financial year. The company is also participating in bids worth 150 crore, with a historical conversion rate of 20-30%.

Working Capital Management and Efficiency

The company is actively focusing on improving its working capital cycle, which currently stands at 120 receivable days. The target is to reduce this significantly to less than 45 days over the next three years. The new cold rolling mill, operating on a cash-and-carry model, is expected to contribute to this improvement by freeing up 6-7 crores of inventory.

Export Market Challenges and Outlook

Export revenue declined in H1 FY26 to 8.8 crores from over 20 crores in the previous year, primarily due to intense pricing pressure from Chinese competitors and higher Indian steel prices. Management maintains a cautious outlook for aggressive expansion in this region in the short term, expecting organic growth of 15-20% year-on-year and an EBITDA margin of 10-12% for exports.

PLI Scheme and Desiccant Manufacturing

Krishca plans to apply for the Production Linked Incentive (PLI) scheme for its cold rolling mill, as it aligns with the scheme's criteria for specialty steel. The company is also evaluating applying for the Superalloys segment. Additionally, a 2 crore investment in a desiccant manufacturing plant is underway, with expected sales of 20-25 crores by the third or fourth year.

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