Mallcom (India)

Mallcom (India) reported Q4 FY26 operating revenue of INR 147 crores, marking a 7% year-on-year growth. However, EBITDA for the quarter decreased by 11% to INR 14 crores, resulting in an EBITDA margin of 9.34%, a decline of 185 basis points. For the full financial year 2026, operating revenue stood at INR 540 crores, an 11% growth year-on-year, but EBITDA margin contracted by 130 basis points to 11.21%, primarily due to higher raw material costs and lower sales realizations.

FY26 marked the completion of Mallcom's most ambitious investment phase, with both new manufacturing units fully commissioned. The Protec unit at Sanand, Gujarat, and the industrial safety shoe setup at Chandipur, West Bengal, are now operational. The company also strengthened its product portfolio by commencing in-house manufacturing of PU Coated Gloves and PVC Gumboots, which serve as important import substitutes and cater to both domestic and international demand.

The company experienced significant margin pressure due to lower sales realizations from OEMs, particularly in export markets. This was attributed to prohibitive tariffs in the U.S. and bleak demand in the EU. Management noted that passing on price increases in these markets is challenging due to weak demand and long lead times, often requiring concessions to maintain market share. Higher raw material costs, especially for petro-based products, and increased employee expenses further contributed to margin contraction.

Despite a challenging external environment, Mallcom's domestic business continued to be a strong growth engine, expanding by approximately 20% year-on-year in FY26. The company is investing in talent, participating in fairs, and organizing technical seminars to drive growth. Factors like the formalization of the Indian labor sector, stricter BIS standards, and increased consumer awareness for protection are expected to further aid domestic growth. Mallcom is also expanding its distribution network and focusing on marketing and branding to penetrate deeper into the country.

Mallcom completed a major capex cycle in FY26, spending INR 34 crores. For the current year (FY27), the company has budgeted INR 10-15 crores for capex, which will include maintenance and additional new machineries at Sanand and Chandipur/Kolkata. The company's net debt stands at INR 110-115 crores, and management expressed confidence in paying off most of this debt within the next four years, especially with the major capex cycle largely complete.

The newly commissioned Protec unit at Sanand, Gujarat, is currently operating at around 50% capacity. Management targets a minimum annual revenue of INR 40 crores from this facility with its existing capacity. The company is also eligible for and expects to receive a capital subsidy of approximately INR 10 crores for the Sanand project this year. This facility, along with other new units, is expected to be a key enabler for volume-led growth in the coming years.