Kriti Industries (India) Limited — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

Kriti Industries reported a challenging Q1 FY26 with revenue of INR 224 crores and an EBITDA margin of 6.7%, impacted by early monsoons and lower prices. Sales volumes declined, particularly in building products. The company is pursuing capacity expansion and aims for margin improvement through volume growth, despite facing external uncertainties regarding raw material pricing and global trade.

Highlights

  • Management expects agri segment growth of 5-6% (metric ton basis) going forward.

  • Management anticipates building material segment growth of 10% (metric ton basis).

  • Margins are expected to improve with volume growth, targeting a 10% EBITDA margin.

  • Company claims to have improved market share in the agri segment despite overall market shrinkage due to rains.

Concerns

  • Q1 FY26 revenue of INR 224 crores was impacted by early monsoon and unprecedented rains.

  • EBITDA margin for Q1 FY26 stood at 6.7%, which is below FY25 levels of 6.87% and the company's 10% target.

  • Total sales volume declined to 23,714 metric tons from 24,468 metric tons in Q1 FY25.

  • Building product segment experienced a significant volume degrowth of 29% year-on-year.

  • Low turnover was partly attributed to 13% lower prices compared to the last year.

  • Unpredictable international scenario and pending anti-dumping duty on PVC steel create procurement and pricing uncertainty.

Key financials

  1. Revenue ₹224 Cr
  2. EBITDA ₹15 Cr
  3. EBITDA Margin 6.7%
  4. Total Sales Volume 23,714 metric tons -3.1%YoY

What they filed

Q1 FY27: revenue down 22.7%, net profit down 130.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue117 210 138 224 86 −27%136 −35%142 +3%173 −23%
EBITDA5 -1 0 15 -4 −179%6 +505%18 +7870%5 −65%
Net profit-4 -11 -4 7 -10 −172%-0 +96%4 +210%-2 −130%
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
₹224 Cr Total
  • Agri ₹187 Cr 83.5%
  • Building Products ₹22 Cr 9.8%
  • Institutional Business ₹15 Cr 6.7%

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Expansion of capacities and adding new lines for manufacturing
    We are incurring capital expenditure for the expansion of capacities and adding new lines for manufacturing, which we are doing already. We have invested during our last year and the Quarter 1 and we will continue to do so going forward in the times to come.

Guidance & targets

Margin

  • EBITDA Margin Margin · going forward · High confidence 10%
    Sir, my first question is that you mentioned targeting 10% EBITDA margins going forward.

    — Shiv Singh Mehta

Volume

  • Building Material Business Volume Volume · ongoing · Medium confidence beyond ₹200-220 crores per year (₹20-25 crores per month)
    You can say once we grow our business for building material beyond Rs. 200 crores, Rs. 220 crores per year that is about Rs. 20-Rs. 25 crores per month, our fixed costs will come down considerably.

    — Shiv Singh Mehta

  • Agri Segment Growth (metric ton basis) Volume · going forward · High confidence 5-6%
    In agri space, we certainly see about 5%-6% around that growth because there is an overhang which will be reflected in quarter 3 and 4.

    — Shiv Singh Mehta

  • Building Material Segment Growth (metric ton basis) Volume · going forward · High confidence 10%
    Similarly, in building material, we clearly see a growth of about 10%.

    — Shiv Singh Mehta

What to watch in Q2 FY26

EBITDA Margin Improvement

Next quarter / H2 FY26
Current 6.7%
Target Moving towards 10%

Why it matters

This is a key profitability metric, and management has a stated target of 10% EBITDA margin.

Sir, my first question is that you mentioned targeting 10% EBITDA margins going forward. But Q1 FY '26 margin is at 6.74%, still below the FY '25 levels of 6.87.

Risks & concerns

  • Early monsoon and unprecedented rains

    high

    Early onset of monsoon and unprecedented rains in May impacted Q1 sales in both agri and building product segments.

    Management acknowledged

  • Unpredictable international scenario and pending anti-dumping duty on PVC steel

    high

    The international scenario is unpredictable, and the anti-dumping duty on PVC steel has been pending for over a year, creating uncertainty in procurement and pricing.

    Management acknowledged

  • Low turnover due to lower prices

    medium

    Q1 FY26 turnover was disproportionately low due to 13% lower prices compared to last year.

    Management acknowledged

  • Competitive open market

    medium

    The market is competitive, requiring a balance between costing, market reality, and competitive intensity in pricing decisions.

    Management acknowledged

Q&A highlights

2 direct, 3 evasive
Regional manufacturing facility timeline, investment, and target locations Evasive
We are incurring capital expenditure for the expansion of capacities and adding new lines for manufacturing, which we are doing already... So all details are in the work in process.

Analyst sought specific details on a strategic expansion, but management provided no concrete timeline, investment figures, or locations, indicating early stages or reluctance to disclose.

Asked by Anita Raj

Procurement risk from anti-dumping duty (ADD) on PVC steel and optimal sourcing mix Evasive
See, presently, the international scenario is quite unpredictable... ADD is hanging in balance for over a year and still it has not been implemented by Government of India... hopefully in next couple of months, things should streamline and clarity should emerge.

Highlights significant external uncertainties impacting raw material sourcing and pricing, with management acknowledging a lack of clarity and an unpredictable global environment.

Asked by Anita Raj

Success of expansion into other segments beyond primary states (Maharashtra, Rajasthan, Bihar) Partial
You see, our major focus other than agri is building material where we are continuously making our efforts to expand our markets and our product range... So the works are in process and some markets are maturing and some market take time to mature.

Management reiterated focus on building materials and market expansion but indicated that new markets are still 'maturing,' suggesting slower-than-expected progress or longer gestation periods for these ventures.

Asked by Praneeth

Strategy to optimize fixed cost absorption given 49% capacity utilization Direct
No, our sales will grow. We are quite sure, and we will need these capacities, for sure. It is by increasing the topline that we will be able to rationalize our cost optimization per unit.

Management's strategy for improving profitability is solely focused on increasing sales volume to leverage existing capacity, rather than considering capacity rationalization or asset monetization.

Asked by Parth Patel

Balancing market share retention with premium realization in competitive markets, specifically agri volumes Direct
No, our downward is 0.2% reduction in the volume in agri segment... So we must have improved our market share rather than any challenge on that side.

Management claims to have gained market share in the agri segment despite overall market shrinkage due to rains, indicating competitive strength in a challenging environment.

Asked by Parth Patel

Product mix evolution, percentage of higher-margin products, and target mix by FY26 Evasive
You see, I have a figure of whole agri as a segment. Individual product by segment sales is not available here with me. Any such details, you can ask our company and we will provide the details to you.

Management was unable to provide specific details on the product mix and contribution of higher-margin products, which is crucial for understanding the company's future margin trajectory and value-added strategy.

Asked by Riya Sharma

2 min read 5 chapters

Detailed narrative

Q1 FY26 Performance Overview and Challenges

Kriti Industries reported a challenging Q1 FY26 with revenue of INR 224 crores and an EBITDA of INR 15 crores, resulting in an EBITDA margin of 6.7%. This margin is below the FY25 level of 6.87% and the company's 10% target. Total sales volume for the quarter decreased to 23,714 metric tons from 24,468 metric tons in Q1 FY25, primarily due to a 13% reduction in prices compared to the previous year. Management attributed these impacts to the early onset of monsoon and unprecedented rains in May 2025.

Segmental Performance and Growth Outlook

The agri segment contributed INR 187 crores to revenue, while building products accounted for INR 22 crores, and institutional business for INR 15 crores. The building product segment experienced a significant volume degrowth of 29% year-on-year. Despite this, management anticipates 10% growth in metric tons for building materials and 5-6% growth for the agri segment going forward. The company expects margins to improve as volumes grow, particularly in building materials, where achieving annual sales beyond INR 200-220 crores is projected to reduce fixed costs considerably.

Capital Expenditure and Capacity Utilization Strategy

Kriti Industries is continuing its capital expenditure program for capacity expansion and adding new manufacturing lines, with investments made in Q1 FY26 as per plan. The current capacity utilization stands at 49%. Management's strategy to optimize fixed cost absorption is solely focused on increasing sales volume to leverage existing capacities, rather than considering temporary rationalization or asset monetization, believing that sales growth will rationalize cost per unit.

External Headwinds and Procurement Risks

The company faces significant external challenges, including an unpredictable international scenario and the unresolved anti-dumping duty on PVC steel, which has been pending for over a year. These factors create uncertainty in raw material procurement and pricing, with management hoping for clarity on these issues within the next couple of months. The competitive open market also influences pricing decisions, requiring a balance between costing, market reality, and competitive intensity.

Market Share Resilience in Agri Segment

Despite the overall agri market shrinking by an estimated 15-20% in May due to heavy rains, Kriti Industries claims to have improved its market share in the agri segment. The company reported only a 0.2% volume reduction in this segment, indicating a resilient competitive position even in a challenging environment where the market itself contracted significantly.

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