Mallcom (India) Limited — Q3 FY26 earnings call

Call held 22 Jan 2026

Management summary

Mallcom (India) delivered a strong Q3 FY26, with operating revenue growing 11.5% YoY to ₹131 crores and EBITDA increasing 27% YoY to ₹19 crores, driven by better realizations and cost optimization. Net profit rose 13% YoY to ₹10 crores. While domestic sales showed robust growth, exports remained soft, and new facilities are operating at lower utilization, impacting overall 9-month margins.

Highlights

  • Operating revenue of ₹131 crores, up 11.5% YoY.

  • EBITDA of ₹19 crores, up 27% YoY, with EBITDA margin of 14.7%.

  • Net profit of ₹10 crores, up 13% YoY, with PAT margin of 7.8%.

  • Strong domestic sales growth, outpacing exports.

  • New manufacturing facilities at Sanand and Chandipur are fully operational.

Concerns

  • 9-month EBITDA margin contracted by 109 basis points to 11.9% due to initial costs from new facilities.

  • Export markets, particularly Europe and North America, remained soft.

  • New facilities are currently operating at lower utilization (40-50%).

Key financials

  1. Operating Revenue ₹131 Cr +11.5%YoY
  2. EBITDA ₹19 Cr +27%YoY
  3. EBITDA Margin 14.7%
  4. PAT ₹10 Cr +13%YoY
  5. PAT Margin 7.8%

What they filed

Q1 FY27: revenue down 10.6%, net profit down 33.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue129 118 138 122 139 +8%131 +11%147 +7%109 −11%
EBITDA16 15 15 18 10 −38%19 +26%14 −11%14 −23%
Net profit10 9 30 10 4 −63%10 +12%6 −79%7 −33%
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.

Order book

high confidence

Total value

₹82.5 Cr

as of 2025-12-31 range

Execution

executable over 3-4 months for white label business

Composition

  • Export (geography) ₹82.5 Cr
For domestic market, we do not work on order book basis because it's mostly stock and sell model.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed solely funded by us
    • Strengthen manufacturing footprint, Sanand facility in Gujarat and industrial shoe unit at Chandipur, West Bengal
    • New glove lines
    As highlighted earlier, the company has undertaken had undertaken substantial capital expenditure to strengthen its manufacturing footprint. Both our Sanand facility in Gujarat and the industrial shoe unit at Chandipur, West Bengal are now fully operational. ... As you know that the capex, which we have done over the last 2, 3 years is solely funded by us.
  • Debt Debt disclosed Cost 6.5%
    • Rate reset Cost of funding increased due to government removing subvention, later re-introduced with a cap of INR50 lakhs per annum.
    And second thing is that, yes, the cost of funding has also gone up because of government removing subvention, which they were providing earlier for exports and to MSME. And -- but after a long gap almost 1 year, they have again re-introduced this, but with some cap. So we will be benefiting with this, but there is a cap of INR50 lakhs per annum and which is maximum one can enjoy for a particular financial year. Otherwise, it is -- the level of borrowing remains the same as last year and this year, and it is solely for working capital funding. ... So as it is it is we are into priority sector lending and the cost is at the lower side. So we are paying in the range of 6.5% on working capital funding.

Guidance & targets

Revenue

  • Overall Revenue Growth Revenue · FY26 · Medium confidence double-digit figures
    Overall, by March '26, we target that we should be growing at least in double-digit figures. Let us see how much we can reach.

    — Shyam Sundar Agrawal

  • Q4 Revenue Growth Revenue · Q4 FY26 · Medium confidence higher than 19-20%
    We are expecting, yes, overall, if you are able to do a 19%, 20%, it should be good, but we are aiming for higher also in Q4.

    — Rohit Mall

  • Top-line Growth Revenue · next 2-3 years · Medium confidence 20% at least
    I think our aspiration is to grow top line at 20% at least.

    — Rohit Mall

  • Branded Business Growth Revenue · future · High confidence 20% or plus
    And yes, with for our branded, definitely 20% or plus is growth something that we can target.

    — Rohit Mall

  • Sanand Facility Revenue Revenue · full capacity · High confidence INR100 crores
    So in Sanand, we are targeting INR100 crores revenue with existing immediate planned capex. ... So for Sanand, we are targeting INR100 crores revenue with all the capacities which we have planned. So like as Rohit mentioned, 6 to 7 machines should be there, then we should be reaching this target turnover.

    — Shyam Sundar Agrawal

Profitability

  • EBITDA Margin Profitability · ongoing · High confidence 13% to 15%
    So definitely, we need to catch up on the productivity side of the new units. But overall, as you have seen that margin remains because of nature of business and the product which we are manufacturing, the margin -- overall margin would be in the range of 13% to 15% only.

    — Shyam Sundar Agrawal

  • PAT Margin Profitability · ongoing · High confidence 8% to 9%
    Yes. So ideally, it should be in the range of 8% to 9% PAT margin.

    — Shyam Sundar Agrawal

Capacity

  • New Units Utilization (Safety Shoes, Sanand) Capacity · by March · High confidence 80% to 90%
    As of now, we are doing almost in the range of 40%, 50% only. And we target that by March, it should be working again in the range of 80% to 90% and same for Sanand also.

    — Shyam Sundar Agrawal

What to watch in Q4 FY26

New Facilities Utilization

by March
Current 40-50% for safety shoes unit in West Bengal and Sanand
Target 80-90% utilization

Why it matters

Improved utilization at new plants is key to absorbing fixed costs and boosting profitability.

As of now, we are doing almost in the range of 40%, 50% only. And we target that by March, it should be working again in the range of 80% to 90% and same for Sanand also.

Risks & concerns

  • Soft Export Markets

    medium

    European and North American markets are slow, impacting export growth, though efforts are on to gain market share.

    However, when it comes to our export and white label, we expect that the -- hopefully, the worst is behind. If the world seems stable and will be stable, I think we can expect better growth from our export market also.

    Management acknowledged

  • Higher Depreciation and Finance Costs

    medium

    New facilities have led to higher depreciation and finance costs, impacting profitability in the short term due to lower utilization.

    While this phase of investment has resulted in higher depreciation and finance costs during the period, we believe these facilities will be key enablers of volume-led growth and revenue expansion in the coming years.

    Management acknowledged

  • Competition and Pricing Pressure

    medium

    In challenging markets, competitors often lower prices, leading to pricing pressure.

    And especially when markets go bad, the competitions also realize and international competitions also, they start also lowering their prices.

    Management acknowledged

Q&A highlights

8 direct
Exports Growth & Market Share Direct
So it works. Definitely, we are trying to gain market share from European -- other competition because in Europe, in general, the growth of the market isn't as much. So whatever growth extra growth we are getting is by gaining market share from some other competition.

Explains the strategy for export growth in a challenging market, focusing on market share gains rather than overall market expansion.

Asked by Aditya

EU-India Free Trade Agreement (FTA) Benefits Direct
No, that could be really beneficial because our sectors and our industry and our HS codes are usually the ones which are included in the free trade or any sort of trade agreements... That definitely will help us to increase volumes from Europe.

Highlights a potential significant catalyst for future export growth, addressing current challenges in European markets.

Asked by Aditya

New Product Launches & Market Reception Direct
But yes, we have started selling these products, and we started receiving interest and inquiries. So we are at a stage where we are sending out samples and getting more and more feedback.

Provides an update on the initial success and market interest in newly launched products like helmets, PU gloves, and lightweight safety shoes.

Asked by Aditya Khandelwal

Certification as a Differentiator Direct
But it gets tougher and tougher as you get into more complicated products or if you go into more value-added products in the same category. So that's where the segregation starts. And then obviously, it's not just getting the BIS, but also maintaining it and ensuring that each product which comes out is a certified product.

Explains how certifications differentiate Mallcom in the market, especially for more complex and value-added products, and the barriers to entry for unorganized players.

Asked by Rushabh Shah

Margin Sustainability & Drivers Direct
Yes, yes, definitely. So I would say the last quarter was one-off, and you will see that over last 3, 4 years, we have been having EBITDA margin in the range of 13% to 15%. And this is what we have done this quarter also.

Reassures investors that the strong Q3 margins are sustainable and align with historical performance, despite initial costs from new facilities.

Asked by Dhwanil Desai

Capacity Utilization of New Facilities Direct
As of now, we are doing almost in the range of 40%, 50% only. And we target that by March, it should be working again in the range of 80% to 90% and same for Sanand also.

Provides clear targets for ramping up utilization at new plants, which is crucial for improving overall profitability and absorbing higher fixed costs.

Asked by Viraj

Revenue Potential from Sanand Facility Direct
So in Sanand, we are targeting INR100 crores revenue with existing immediate planned capex.

Quantifies the significant revenue potential from the Sanand facility once it reaches full capacity with planned expansions.

Asked by Aditya

Commoditized vs. Value-Added Product Mix Direct
It should be -- Rohit, it should be in the range of commoditized would be in the range of 40 and the value-added should be 60 around, yes.

Clarifies the current product mix and indicates a strategic shift towards higher-margin value-added products.

Asked by Umesh Matkar

3 min read 8 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Mallcom (India) reported a robust Q3 FY26, with consolidated operating revenue reaching ₹131 crores, marking an 11.5% year-on-year growth. EBITDA for the quarter stood at ₹19 crores, a significant 27% increase year-on-year, with the EBITDA margin expanding to 14.7%. Net profit for the period was ₹10 crores, growing 13% year-on-year, achieving a PAT margin of 7.8%.

Operational Highlights & Profitability Drivers

The improved profitability was attributed to better realizations across key product categories, a strategic shift towards value-added products, and continued cost optimization initiatives across manufacturing and operating expenses. Management highlighted that the Q3 margins are sustainable and align with the 13-15% EBITDA margin range observed over the past 3-4 years.

New Capacity & Investment

The company's substantial capital expenditure to strengthen its manufacturing footprint has resulted in both the Sanand facility in Gujarat and the industrial shoe unit at Chandipur, West Bengal, becoming fully operational. While these investments have led to higher depreciation and finance costs in the short term, they are expected to be key enablers for volume-led growth and revenue expansion in the coming years. New glove lines have also been ordered, with delivery and installation expected by Q1 FY27.

Market Dynamics: Domestic vs. Exports

Mallcom witnessed strong domestic sales growth, outpacing exports over the 9-month period, reflecting an increased focus on the domestic market. Export markets, particularly in Europe and North America, remained soft due to global economic conditions and competition. However, the company is actively working to gain market share and anticipates significant benefits from potential trade agreements like the EU-India FTA, which could open new markets and create a level playing field.

Product Portfolio Expansion

Mallcom expanded its product portfolio with new launches in the Safety Shoes and Helmet segments, and has started in-house production of PU gloves, which were previously traded. Initial market reception for these new products has been positive, with over 50% of dealers requesting samples and inquiries, indicating strong interest and potential for future growth.

Capacity Utilization & Profitability

While regular product lines operate at 80-90% utilization, the newer units, including the safety shoe unit in West Bengal and the Sanand facility, are currently at 40-50% utilization. The company targets to ramp up utilization of these new units to 80-90% by March, which is crucial for improving overall profitability and absorbing the increased fixed costs from these investments.

Capital Allocation & Funding Costs

The company's capex over the last 2-3 years was solely funded internally. Finance costs increased due to these investments and the temporary removal of government subvention for exports and MSMEs, though a capped subvention of ₹50 lakhs per annum has been re-introduced. Working capital funding is secured at approximately 6.5% interest, with overall borrowings remaining stable compared to the previous year.

Future Growth Outlook & Product Mix

Mallcom aims for at least double-digit revenue growth for FY26 and aspires to achieve 20%+ top-line growth in the next 2-3 years, driven by branded business, Middle East/Africa expansion, and new products. The company's product mix is currently 40% commoditized and 60% value-added, with a strategic focus on increasing the share of higher-margin value-added products to enhance overall profitability.

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