Madhusudan Masa — Q3 FY26 earnings call

Call held 20 Jan 2026

Management summary

Madhusudan Masala Limited delivered strong Q3 and 9M FY26 results, marked by robust revenue and profit growth, and significant margin expansion. The company is aggressively pursuing capacity expansion with a new greenfield project and deepening its distribution network to achieve its ambitious 30% CAGR target. While commodity prices are currently high and expected to rise further, management is confident in maintaining margins through strategic procurement and pricing.

Highlights

  • Revenue for Q3 FY26 stood at INR 76.32 crores, a growth of 20.3% year-on-year, driven by high volumes and improved capacity utilization.

  • EBITDA increased to INR 8.25 crores, a growth of 79.6% year-on-year, with EBITDA margin expanding to 10.8%, up by 357 basis points year-over-year.

  • Net profit for Q3 FY26 was INR 4.7 crores, up by 104% year-on-year, with net margin improving to 6.2%.

  • Branded products contributed more than 70% of total revenue in nine months FY26, reflecting strong brand portfolio strengthening.

  • Distribution footprint expanded meaningfully, with presence across seven plus states, over 42,500 retail outlets, 6,400 plus wholesalers, and 358 plus distributors as of December '25.

Concerns

  • EBITDA margin in Q3 FY26 (10.8%) was lower than Q2 FY26 (14.5%), attributed by management to higher raw material procurement costs in Q3.

  • Capacity is still not sufficient to process entire categories, requiring continued outsourcing despite recent brownfield expansion.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹76.32 Cr
    YoY +20.3%
  • EBITDA
    ₹8.25 Cr
    YoY +79.6%
  • EBITDA Margin
    10.8%
  • Net Profit
    ₹4.7 Cr
    YoY +104%

9M

  • FY26 Revenue
    ₹194.54 Cr
    YoY +19.3%
  • FY26 EBITDA
    ₹22.31 Cr
    YoY +40%
  • FY26 EBITDA Margin
    11.5%
  • FY26 Net Profit
    ₹12.36 Cr
    YoY +40%

What they filed

Q1 FY27: revenue up 34.5%, net profit up 55.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue70 63 73 73 45 −35%76 +20%97 +33%98 +34%
EBITDA8 5 7 8 7 −13%8 +80%11 +50%11 +47%
Net profit4 2 6 4 3 −16%5 +104%6 +8%7 +56%
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.

Capital allocation

high confidence
  • Capex Capex disclosed Phase 2 CapEx could be 50% debt and 50% from internal accruals or warrant conversion.
    • Greenfield expansion (Phase 1) for 6,000 metric tons capacity ₹18 Cr
    • Brownfield expansion, added 1,200 metric ton manufacturing capacity at Jamnagar facility
    • Greenfield expansion (Phase 2) for 12,000-18,000 metric tons capacity ₹35 Cr
    For that, my CapEx is going to be INR 18 crores. We haven't finalized the new unit yet, which machinery we are taking or how much advanced it will be, or how much we will go for automation? We will finalize it after that. But my CapEx for the 6,000 metric tons which has been finalized, will be INR 18 crores. [...] And phase 2, the 12,000 expansion, for that, if we assume the same size of machinery or the type of process or quality, then we were assuming that will take about INR 35 crores, INR 40 crores of CapEx. If we take 50% debt, then we will not need to raise any further capital.
  • Debt Debt disclosed
    If we take 50% debt, then we will not need to raise any further capital.
  • Liquidity Liquidity disclosed Working capital is needed for inventory. For new markets, the super-stockist model involves advance payment, reducing funding requirements.
    In this, my stock, I mean, for inventory, working capital will be needed. Rest, the new market that we are covering, we are going with the super-stockist model. So, in the super-stockist model, my payment is in advance. So there, I don't have any funding requirement.

Guidance & targets

Revenue

  • Revenue CAGR Revenue · by 2030 · High confidence 30%
    So, in this way, we have planned a growth of 30% by 2030, we will achieve that by increasing our regional presence.

    — Rishit Kotecha

  • Branded Revenue Contribution Revenue · by 2028 · High confidence 100%
    We are planning to have 100% branded revenue by 2028.

    — Rishit Kotecha

  • Q4 FY26 Revenue Revenue · Q4 FY26 · High confidence INR 100 crore plus
    So hopefully, our quarter 4 will easily reach INR 100 crore plus.

    — Rishit Kotecha

  • FY26 Consolidated Revenue Revenue · FY26 · High confidence more than INR 300 crores

    Previously INR 280-300 crores → more than INR 300 crores

    Yes, already on the track and that will be more than INR 300 crores. As per our confidence seen over the market.

    — Rishit Kotecha

Profitability

  • EBITDA Margins Profitability · FY26 · High confidence 10.8% to 11%
    Yeah, for the entire financial year, the EBITDA Margins will be between 10.8% to 11%.

    — Rishit Kotecha

Capacity

  • Peak revenue from current Jamnagar facility Capacity · at peak utilization · Medium confidence up to INR 500 crores
    Jamnagar facility, we can easily make a revenue of up to INR 500 crores.

    — Rishit Kotecha

  • Peak revenue after new capacity (Phase 1) Capacity · after new capacity comes online · Medium confidence upwards of INR 600 crores
    After that our peak revenue can be upwards of INR 600 crores, because there will be 100% in-house production. There will be no need to outsource anything.

    — Rishit Kotecha

Distribution

  • Annual Retail Store Additions Distribution · annually · High confidence more than 10,000
    So, assume that every year, more than 10,000 retail stores will be added.

    — Rishit Kotecha

  • Annual Distributor Additions Distribution · annually · High confidence more than 100
    And more than 100 distributors will be added to this.

    — Rishit Kotecha

What to watch in Q4 FY26

Greenfield project (Phase 1) commissioning

Q3 FY27 (October 2026)
Current Civil work 100% completed by end of March, fabrication April-June, commissioning August
Target Commercial production from October '26

Why it matters

Successful commissioning is crucial for meeting future demand and achieving revenue targets, especially the INR 600 crore peak revenue target.

Our new greenfield project it is commencing at Jamnagar-Rajkot Highway which will be operational by the end of September '26. Hopefully, we will start our commercial production from that unit from October '26.

Risks & concerns

  • Commodity price inflation

    medium

    Chilli, turmeric, and coriander prices are at peak and expected to go higher, which could impact procurement costs and margins if not managed effectively.

    in the current season, whether it be chilli or turmeric or coriander, i.e. all our core products in spices for CTC, all the commodity prices are at their peak right now, and there is a lot of demand, and the production from the farmers, the material that was coming in the season, and what is coming now, the quality is also varying a lot. So, the prices have increased a lot in the last three months.

    Management acknowledged

Q&A highlights

8 direct
Impact of commodity price inflation/deflation on revenue and margins Direct
Actually, China is a net importer of chilli from India. China is not an exporter. We export to China from India. So, there can be no pressure from China on chillies. And second thing is in the current season, whether it be chilli or turmeric or coriander, i.e. all our core products in spices for CTC, all the commodity prices are at their peak right now, and there is a lot of demand, and the production from the farmers, the material that was coming in the season, and what is coming now, the quality is also varying a lot. So, the prices have increased a lot in the last three months.

Clarifies the company's view on commodity price drivers and their strategy for managing margins during price fluctuations, indicating strong pricing power.

Asked by Resha Mehta

Commissioning date for new greenfield expansion and servicing 30% CAGR demand in interim Direct
Our new greenfield project it is commencing at Jamnagar-Rajkot Highway which will be operational by the end of September '26. Hopefully, we will start our commercial production from that unit from October '26. [...] For that, we will focus on geographical expansion. From the existing regions, we get 10% to 12% of organic growth from there. And for more growth than that, we focus on horizontal, vertical expansion.

Provides a clear timeline for new capacity and outlines the multi-pronged strategy (organic growth, geographical expansion, deep penetration) to achieve long-term growth targets.

Asked by Rehan Sayyed

Integration of Vitagreen distribution network and organic vs inorganic growth strategy Direct
See, as of now, we are searching for a good like as we acquired Vitagreen, if we get an opportunity, then we are open for that. But that will be an add-on for us. We have not counted that in our 30% CAGR, if we will get such a good company then only we will continue our inorganic expansion. [...] And among all our Vitagreen distributors, we have started working with more than 70% of the distributors.

Clarifies that the 30% CAGR target is organic, with M&A being an additional upside, and provides an update on the integration of the acquired distribution network.

Asked by Rehan Sayyed

Branding spend, digital marketing budget, and branded sales targets Direct
For branding, our budget is more in the season. For example, our season is from January to May-June, so, we spend 1% to 1.5% of our sales on marketing. [...] This time, we have planned to make a separate budget for digital marketing from Q4. [...] In Q3, our branded sales were 70%. In last Q3, it was 62%. So, in a year, we have increased our branded sales by 8%. We are planning to have 100% branded revenue by 2028.

Details the company's marketing strategy, including a new focus on digital, and reiterates the ambitious target for branded revenue contribution.

Asked by Amit Agicha

Impact of distribution expansion on working capital Direct
In this, my stock, I mean, for inventory, working capital will be needed. Rest, the new market that we are covering, we are going with the super-stockist model. So, in the super-stockist model, my payment is in advance. So there, I don't have any funding requirement.

Explains how the company manages working capital requirements for aggressive distribution expansion, mitigating funding needs through the super-stockist model.

Asked by Amit Mehendale

Competitive pricing power and distributor margins in new regions Direct
Our distributor structure is similar to pan-India. The margins of the distributors are similar region-wise. There is no variation in that, be it of Gujarat, Maharashtra, or any state in the North, the distributor margin is similar. [...] Our price-to-retailer, PTR is also a well-established to brand. In comparison to them, our PTR is quite healthy. So, we get leverage from distributors to place with retailers here.

Highlights the company's competitive advantage in pricing and distributor relations, suggesting a smooth entry into new markets without significant margin dilution.

Asked by Amit Mehendale

Reason for EBITDA margin drop in Q3 (10.8%) compared to Q2 (14.5%) Direct
See, in quarter 2, our revenue was quite dropped. And at that time, the inventory of quarter 1, we did not procure much in quarter 2. So, we processed the raw material of our inventory and sold it. So, our margin was quite good. Now in quarter 3, the price has risen a lot. So, to maintain our inventory level, we have procured at current prices in quarter 3. That's why our margin is consistent compared to Q2. But overall, we have improved a lot in quarter 3.

Provides management's explanation for the sequential margin decline, attributing it to procurement strategy amidst rising raw material prices rather than operational inefficiency.

Asked by Sheikh Mujib

Funding for Phase 2 CapEx and potential dilution Direct
Yes. If we are taking 50% debt, then there will be no need because warrant conversion is also pending, promoters warrant. So that fund raise will also come. If we take 50% fund debt, then there will be no need for any new funds.

Clarifies the funding strategy for future capacity expansion, indicating a mix of debt and promoter warrants, which could avoid equity dilution.

Asked by Amit Mehendale

3 min read 5 chapters

Detailed narrative

Q3 & 9M FY26 Performance Overview

Madhusudan Masala Limited reported a strong Q3 FY26, with revenue growing 20.3% year-on-year to INR 76.32 crores, and EBITDA increasing by 79.6% to INR 8.25 crores. The EBITDA margin expanded by 357 basis points to 10.8%, driven by operating leverage and an improved product mix. Net profit for the quarter more than doubled, rising 104% to INR 4.7 crores. For the nine-month period (9M FY26), revenue stood at INR 194.54 crores (up 19.3% YoY), EBITDA at INR 22.31 crores (up 40% YoY), and net profit at INR 12.36 crores (up 40% YoY).

Capacity Expansion and Utilization

The company's Jamnagar and Rajkot units are operating at 98% and 100% capacity utilization, respectively, underscoring strong demand. A brownfield expansion in Q3 FY26 added 1,200 metric tons of manufacturing capacity at the Jamnagar facility. The new greenfield project on the Jamnagar-Rajkot Highway, with a phase one capacity of 6,000 metric tons, is expected to be operational by the end of September 2026, with commercial production commencing in October 2026. The CapEx for this phase one is INR 18 crores, and a subsequent Phase 2 (12,000-18,000 metric tons) is estimated to cost INR 35-40 crores, potentially funded 50% by debt and 50% by internal accruals/promoter warrants.

Branding and Distribution Strategy

Branded products now contribute over 70% of total revenue in 9M FY26, up from 62% in the prior year, with a target to achieve 100% branded revenue by 2028. The company plans to allocate 1-1.5% of sales to conventional marketing during peak season (Jan-June) and will introduce a separate budget for digital marketing from Q4 FY26 due to impressive e-commerce growth. Distribution is expanding rapidly, with an average of 2,500-3,000 grocery stores and 25-30 distributors added quarterly, aiming for over 10,000 retail stores and 100 distributors annually. New sales teams are being onboarded for key regions like Punjab and Uttar Pradesh to drive deeper penetration.

Commodity Price Dynamics and Margin Management

Management noted that prices for core spices like chili, turmeric, and coriander are currently at their peak, with chili prices increasing by over INR 100 per kg in Q3 compared to Q2. Despite this, the company maintains its EBITDA margins through strategic procurement, acquiring 50-60% of inventory during the season and adjusting selling prices. They confirmed that price increases have been implemented across categories (e.g., chili up INR 60-70, turmeric up INR 25-30, coriander up INR 15-20) and expect prices to remain sustained or increase further in Q4.

Future Growth Outlook and Targets

Madhusudan Masala aims for a 30% revenue CAGR by 2030, driven by geographical expansion, deep market penetration, and organic growth of 10-12% from existing regions. The company expects to exceed INR 300 crores in consolidated revenue for FY26, with Q4 FY26 revenue projected to surpass INR 100 crores. With the current Jamnagar facility, peak revenue can reach up to INR 500 crores, and with the new greenfield capacity (Phase 1), peak revenue is projected to be upwards of INR 600 crores, supported by 100% in-house production.

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

More Fast Moving Consumer Goods earnings calls