Kriti Industries (India) Limited — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

Kriti Industries reported a challenging Q4 and FY25 with significant revenue and volume declines, particularly in the industrial segment, leading to a net loss. Despite this, the company is making strategic capex investments in building materials and column pipes, and management anticipates margin improvement and stable raw material prices going forward, with agri and building products segments showing growth.

Highlights

  • Agri-segment volume grew 5% YoY in FY25 to 53,696 metric tons.

  • Building Products segment volume grew 30% YoY in FY25 to 9,185 metric tons.

  • Approximately ₹10 crores spent on capex recently, with a major focus on building materials and column pipes.

  • Anticipated improvement in overall margins towards 10% going forward.

  • Raw material prices appear to be stabilizing after a long period of volatility, with a recent marginal price increase.

Concerns

  • Q4 FY25 revenue declined 29.3% YoY to ₹138 crores.

  • Q4 FY25 EBITDA was only ₹0.2 crores, leading to a net loss of approximately ₹4 crores.

  • FY25 annual revenue declined 16.7% YoY to ₹722 crores, with EBITDA margin at 3.93% (down 294 bps).

  • Industrial segment sales volume declined 68% YoY in Q4 FY25 and 73% YoY in FY25 due to intentional reduction of exposure.

  • Total sales volume decreased 24% YoY in Q4 FY25 and 10.7% YoY in FY25.

Key financials

2 periods

Q4

  • Revenue
    ₹138 Cr
    YoY -29.3%
  • EBITDA
    ₹0.2 Cr
  • Net Loss
    ₹4 Cr

FY25

  • Revenue
    ₹722 Cr
    YoY -16.7%
  • EBITDA
    ₹28 Cr
  • EBITDA Margin
    3.9%
    YoY -2.9%
  • Net Loss
    ₹4 Cr

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 Volume
FY25 Total Sales Volume 67,543 metric tons 41.8%
FY25 Agri Segment Volume 53,696 metric tons 33.2%
Q4 Total Sales Volume 13,337 metric tons 8.2%
FY25 BP Segment Volume 9,185 metric tons 5.7%
Q4 Agri Segment Volume 9,154 metric tons 5.7%
FY25 Industrial Segment Volume 4,662 metric tons 2.9%
Q4 Building Products Volume 2,513 metric tons 1.6%
Q4 Industrial Segment Volume 1,671 metric tons 1.0%

Order book

low confidence
The company did not explicitly disclose order book or order inflow figures, focusing instead on sales volumes and market share in various segments.

Source: Inferred

Capital allocation

high confidence
  • Capex ₹10 Cr Out of Rs. 55 crores raised
    • Building material segment
    • Column pipes
    • Augmenting capacity, improving range and offerings
    So far, out of Rs. 55 crores raised, approximately Rs. 10 crores have been spent on capital expenditures. The rest of the plans are in discussion and in final stages. (page 4) ... major focus is on building material where our maximum CAPEX is going. And along with that, the column pipes, which is where we have spent majority of our investments. These are all value-added products for us. (page 9) ... we have invested, put together about 38 crore, 39 crore of CAPEX. And we are further going to invest for augmenting not only our capacity, but improving our range and our offerings. (page 11)

Guidance & targets

Market Growth

  • Agricultural Market Growth Market Growth · Going forward · Medium confidence 8% to 10% range
    the agricultural market will keep growing at about 8% to 10% range

    — Shiv Singh Mehta

Profitability

  • Overall Margin Improvement Profitability · Going forward · Medium confidence 10% around
    We certainly see improvement in margins going forward. And we must be able to improve them towards, I mean, 10% around going forward.

    — Shiv Singh Mehta

  • Agri Segment Margin Profitability · Going forward · High confidence around 10%
    agriculture will offer around 10%

    — Shiv Singh Mehta

  • Building Products Segment Margin Profitability · Going forward · Low confidence better margins
    BP will offer better margins

    — Shiv Singh Mehta

What to watch in Q1 FY26

Overall Margin Improvement

Next quarter
Current FY25 EBITDA Margin 3.93%
Target Towards 10%

Why it matters

Key profitability target for the company, indicating operational efficiency and pricing power.

We certainly see improvement in margins going forward. And we must be able to improve them towards, I mean, 10% around going forward.

Risks & concerns

  • Sluggish Payments in Industrial Segment

    medium

    Contractors in the industrial segment faced delayed payments, leading Kriti Industries to reduce its presence in this market.

    normally all these contractors were not getting payments in time, so payments were sluggish and that was where we wanted to control our business

    Management acknowledged

  • Raw Material Price Volatility

    medium

    Continuous decline in material prices in the past year created resistance, though prices are now stabilizing.

    Last year was a difficult year in the sense there was a continuous decline of material prices. That's why the supply chain and even the customer was finding new prices every new day.

    Management acknowledged

  • Uncertainty of Anti-Dumping Duty (ADD) on PVC

    medium

    Clarity on ADD for PVC is pending court decisions, impacting raw material procurement strategy.

    ADD still no clarity because it's been through courts and courts had intervened. So till courts resolve the subject nothing clearly can be known.

    Analyst not addressed

Q&A highlights

7 direct
Industrial Segment Strategy Direct
Industrial segment market is generally dependent on MEP contractors, these contractors who are supplying to government or other projects. In this year, normally all these contractors were not getting payments in time, so payments were sluggish and that was where we wanted to control our business because we are not sure about the type of business, margins in business and timely payments. So we had very clearly decided to stay away as far as we are not sure that now industry has stabilized and government contracts and everything is streamlined.

Explains the significant decline in the industrial segment and management's cautious approach due to payment issues and margin uncertainty.

Asked by Praneeth

Agri Market Dynamics & Market Share Direct
You see, we are strong in MP, Rajasthan, and we have established reasonable presence in Maharashtra over the last couple of years. In the areas where we are strong, we hold over 40% market share single-handedly.

Provides specific geographic strengths and quantified market share in core regions, indicating competitive positioning.

Asked by Praneeth

HDPE vs PVC Product Split in Agri Segment Direct
Exact numbers I would not have, but majority of portion, about 80% will be there. But majority is PVC. And HDPE is gaining traction, but it takes a long time to come to equivalent to PVC.

Clarifies the dominant product in the agri segment (PVC) and the slower growth trajectory for HDPE, which helps understand product mix and future growth drivers.

Asked by Praneeth

Micro-irrigation Business Strategy Direct
Most of business is related to government because this is all subsidy-based business and we as a Company have chosen to stay away from such businesses.

Explains why the micro-irrigation segment's contribution is low and why the company is not scaling it up, indicating a strategic choice to avoid subsidy-dependent business.

Asked by Praneeth

CAPEX Allocation Direct
You see, we have already spent. I mean, major focus is on building material where our maximum CAPEX is going. And along with that, the column pipes, which is where we have spent majority of our investments. These are all value-added products for us.

Details the specific segments where recent capital expenditure has been focused, highlighting the company's strategic growth areas.

Asked by Tanish Jhaveri

Raw Material Price Stabilization and Margin Outlook Direct
We certainly see improvement in margins going forward. And we must be able to improve them towards, I mean, 10% around going forward.

Provides a clear forward-looking statement on margin expectations, linking it to raw material price stability.

Asked by Tanish Jhaveri

PVC Sourcing and ADD Impact Partial
ADD still no clarity because it's been through courts and courts had intervened. So till courts resolve the subject nothing clearly can be known. And since it has gone to High Court and Supreme Court and still decisions are awaited. And as far as raw material planning is concerned we are keeping a very careful balance between local sourcing and imports, because ADD and all these things, unless they play out, we cannot be very sure which way we will have to plan our procurement cycle.

Highlights uncertainty regarding anti-dumping duties on PVC, which could impact raw material sourcing strategy and costs, but management is waiting for clarity.

Asked by Rohan Baranwal

Price Pass-through Mechanism Direct
No, we generally pass-through immediately on the changes in raw material prices. Because ultimately you will see that in an industry where raw material is a major component of the total cost, we cannot afford to delay. ... Normally within 24 hours it is communicated to everyone about the changes.

Clarifies the company's efficient price pass-through mechanism, which helps mitigate raw material price volatility risks.

Asked by Praneeth

3 min read 6 chapters

Detailed narrative

Q4 & FY25 Financial Performance Overview

Kriti Industries reported a challenging Q4 FY25 with revenue declining 29.3% year-on-year to ₹138 crores, resulting in a minimal EBITDA of ₹0.2 crores and a net loss of approximately ₹4 crores. For the full fiscal year 2025, revenue stood at ₹722 crores, a 16.7% decline from the previous year, with EBITDA at ₹28 crores and an EBITDA margin of 3.93%, a decrease of 294 basis points year-on-year. The company also reported a net loss of around ₹4 crores for the full year.

Segmental Volume Performance

In Q4 FY25, total sales volume decreased by 24% year-on-year to 13,337 metric tons. The agri segment saw a 9% decline to 9,154 metric tons, while building products grew 18% to 2,513 metric tons. The industrial segment experienced a significant 68% decline to 1,671 metric tons. Annually, total sales volume for FY25 was 67,543 metric tons, down 10.7% year-on-year. The agri segment grew 5% to 53,696 metric tons, building products surged 30% to 9,185 metric tons, but the industrial segment plummeted 73% to 4,662 metric tons.

Strategic Shift in Industrial Segment

The company intentionally reduced its exposure to the industrial segment due to sluggish payments from MEP contractors involved in government projects. Management stated they decided to 'stay away as far as we are not sure that now industry has stabilized and government contracts and everything is streamlined,' prioritizing timely payments and margin certainty. This strategic decision led to the substantial volume decline in the industrial segment, which is expected to remain low until market conditions improve.

Capital Expenditure and Growth Focus

Kriti Industries has initiated new investments, spending approximately ₹10 crores recently out of ₹55 crores raised, with the remaining plans in discussion. The primary focus for this capital expenditure is the building materials segment and column pipes, which are considered value-added products. These investments aim to augment capacity, improve product range, and enhance offerings, particularly in the building materials sector, which is expected to see 'fairly good growth' from a low base.

Market Dynamics and Margin Outlook

Management noted that raw material prices, after a period of continuous decline, have begun to stabilize since April 2025, with a recent marginal price increase. This stability is expected to support margin improvement, with the company targeting overall margins of 'around 10% going forward.' The agri market is projected to grow at an 8-10% range, and while agri margins are expected to be around 10%, building products are anticipated to offer 'better margins.' The company also highlighted its efficient price pass-through mechanism, typically within 24 hours of raw material price changes.

Competitive Positioning and Geographical Expansion

Kriti Industries maintains a strong market position in its core regions like MP and Rajasthan, holding over 40% market share. The company is also expanding its presence in Maharashtra. For future growth, particularly in the agri business, the company plans to establish new facilities in regional areas to overcome transportation costs. Management emphasized differentiation through product quality, branding, marketing, and timely services, aiming to be recognized as a premium brand appreciated by customers.

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