Sahyadri Industries Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Sahyadri Industries reported a mixed Q1 FY26, with revenue stabilizing at ₹216 crore and strong sequential growth, but a YoY decline in profitability metrics. EBITDA stood at ₹21.7 crore (10.1% margin), while PAT was ₹10.8 crore (5% margin). Capacity utilization improved to 93%. The company faces challenges from geopolitical instability and input costs, but expects 8-10% topline growth and improved margins for FY26, despite delays in its Palghar expansion project.

Highlights

  • Total income stabilized at ₹216 crore in Q1 FY26, showing a strong 41.6% QoQ growth.

  • EBITDA improved 56.7% QoQ to ₹21.7 crore, with EBITDA margin at 10.1% (up from 9.1% QoQ).

  • Capacity utilization increased to 93% in Q1 FY26 from 89% in Q1 FY25, indicating operational efficiency.

  • Management anticipates 8-10% topline growth for FY26 and better margins due to cost optimization and pricing adjustments.

Concerns

  • Total income saw a marginal decline of 0.8% YoY in Q1 FY26.

  • EBITDA declined 12.7% YoY to ₹21.7 crore, and EBITDA margin contracted to 10.1% from 11.4% YoY.

  • PAT declined 13.8% YoY to ₹10.8 crore, with PAT margin contracting to 5% from 5.7% YoY.

  • Land acquisition delays for the Palghar facility have pushed the commissioning timeline to Q4 FY27.

Key financials

  1. Total Income ₹216 Cr -0.8%YoY
  2. EBITDA ₹21.7 Cr -12.7%YoY
  3. EBITDA Margin 10.1%
  4. PAT ₹10.8 Cr -13.8%YoY
  5. PAT Margin 5%
  6. Capacity Utilization 93%

What they filed

Q1 FY27: revenue up 20.5%, net profit up 145.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue106 131 151 215 125 +18%145 +11%195 +29%259 +20%
EBITDA9 8 13 20 9 +0%13 +63%19 +46%39 +95%
Net profit2 1 4 11 3 +50%5 +400%11 +175%27 +145%
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 ₹100 Cr
    • New facility in Palghar ₹100 Cr
    As we stated earlier, there is a delay in land acquisition and still it is going on particularly in the Palghar facility and the revised timeline for that is Q4 of FY'27 and the total investment would be around Rs. 100 crore and out of which Rs. 50 crore is already spent and once this line is fully operational, roughly Rs. 125 crore would be the addition into the topline.

Guidance & targets

Capacity

  • Palghar facility commissioning Capacity · Q4 FY27 · Medium confidence Q4 FY27
    As we stated earlier, there is a delay in land acquisition and still it is going on particularly in the Palghar facility and the revised timeline for that is Q4 of FY'27

    — Tuljaram Maheswari

Capex

  • Total investment for Palghar facility Capex · by Q4 FY27 · High confidence ₹100 crore
    and the total investment would be around Rs. 100 crore and out of which Rs. 50 crore is already spent

    — Tuljaram Maheswari

Revenue

  • Topline addition from Palghar facility Revenue · once fully operational · High confidence ₹125 crore
    and once this line is fully operational, roughly Rs. 125 crore would be the addition into the topline.

    — Tuljaram Maheswari

  • Topline upside for FY26 Revenue · FY26 · High confidence 8% to 10%
    We feel that roughly 8% to 10% upside in the topline in the FY'26.

    — Tuljaram Maheswari

Volume

  • Non-asbestos business growth Volume · 3 to 4 years · Medium confidence double
    Now, for the next 3 years, it appears to me is what the industry at present is, maybe double than from here after 3 to 4 years.

    — Tuljaram Maheswari

Margin

  • Operating margins Margin · FY26 · Medium confidence better than what we have already given for the year
    As regard the margin, it will be better than what we have already given for the year.

    — Tuljaram Maheswari

What to watch in Q2 FY26

Palghar facility land acquisition progress

next quarter
Current 1-2 parcels pending, getting sorted out
Target Resolution of pending land parcels

Why it matters

Crucial for adhering to the revised Q4 FY27 commissioning timeline for the new facility.

There is 1 or 2 parcels of the land which is in between, it is getting sorted out.

Risks & concerns

  • Elevated input costs and rupee depreciation

    high

    Increased costs for imported asbestos fiber and other inputs, amplified by rupee depreciation, putting pressure on manufacturing costs and operating margins.

    Management acknowledged

  • Geopolitical instability and its impact on global trade and commodity flows

    medium

    Affects input costs, supply chain, and freight charges, particularly for imported asbestos fiber.

    Management acknowledged

  • Limited ability to pass on cost increases to consumers

    medium

    Especially in the price-sensitive rural housing segment, leading to pressure on operating margins.

    Management acknowledged

  • Land acquisition delays for Palghar facility

    medium

    Delaying the commissioning of the new facility to Q4 FY27, impacting future capacity and revenue addition.

    Management acknowledged

  • Uncertainty in dollar-rupee movement

    medium

    Makes it difficult to predict import-related expenses and overall business environment.

    Management acknowledged

Q&A highlights

3 direct
Capacity expansion plans and timeline for new facilities Direct
As we stated earlier, there is a delay in land acquisition and still it is going on particularly in the Palghar facility and the revised timeline for that is Q4 of FY'27 and the total investment would be around Rs. 100 crore and out of which Rs. 50 crore is already spent and once this line is fully operational, roughly Rs. 125 crore would be the addition into the topline.

Provides specific details on the Palghar expansion project, including revised timeline, total investment, spent amount, and expected revenue contribution.

Asked by Kaustav Bubna

Hurdles in land acquisition for Palghar facility Partial
There is 1 or 2 parcels of the land which is in between, it is getting sorted out.

Identifies the specific nature of the land acquisition issue (1-2 parcels) causing delays, indicating a localized problem rather than a systemic one.

Asked by Kaustav Bubna

Vision for non-asbestos business, new products, and growth targets Direct
See the point is, this is actually a future product. So, going forward, this is definitely going to take the big leap into the market. We would say fireproof, waterproof and product. So, definitely that is going to be taking lead. Now, for the next 3 years, it appears to me is what the industry at present is, maybe double than from here after 3 to 4 years.

Outlines the strategic direction for the non-asbestos segment, highlighting product characteristics (fireproof, waterproof) and an ambitious growth target of doubling in 3-4 years.

Asked by Kaustav Bubna

FY26 guidance on topline and margins given raw material and rupee strength challenges Direct
We feel that roughly 8% to 10% upside in the topline in the FY'26. As regard the margin, it will be better than what we have already given for the year.

Provides specific numerical guidance for FY26 revenue growth and a qualitative outlook for margin improvement, addressing analyst concerns about macro factors.

Asked by Kaustav Bubna

2 min read 5 chapters

Detailed narrative

Q1 FY26 Performance Overview

Sahyadri Industries reported a total income of ₹216 crore in Q1 FY26, marking a marginal decline of 0.8% year-on-year but a robust 41.6% growth quarter-on-quarter. EBITDA for the quarter stood at ₹21.7 crore, translating to an EBITDA margin of 10.1%. While EBITDA declined 12.7% year-on-year, it saw a significant 56.7% increase quarter-on-quarter. Profit After Tax (PAT) was ₹10.8 crore, a 13.8% year-on-year decline, but a substantial 152.2% quarter-on-quarter growth, with a PAT margin of 5%.

Industry Landscape and Challenges

The Indian asbestos-based roofing sector continues to face a complex environment. Key challenges include geopolitical instability impacting global trade, elevated input costs (especially for imported asbestos fiber), supply chain disruptions, increased freight charges, and the depreciation of the Indian rupee. These factors have led to heightened price volatility and exerted pressure on manufacturing costs and operating margins, compounded by a limited ability to pass on cost increases to price-sensitive rural consumers.

Operational Efficiency and Capacity Utilization

Despite the headwinds, Sahyadri Industries demonstrated resilient operational performance. Capacity utilization improved to 93% in Q1 FY26, up from 89% in Q1 FY25. This indicates better utilization of existing assets, contributing to the sequential improvement in EBITDA and PAT, even amidst weak demand and ongoing pricing pressures.

Capacity Expansion and Non-Asbestos Business Strategy

The company's Palghar facility expansion faces delays due to land acquisition issues, with the revised timeline for commissioning now set for Q4 FY27. This project involves a total investment of ₹100 crore, with ₹50 crore already spent, and is expected to add roughly ₹125 crore to the topline upon full operation. Sahyadri is also focusing on its non-asbestos business, which includes fireproof and waterproof products, with an aspiration to double this segment's contribution within the next 3 to 4 years.

FY26 Outlook and Guidance

For FY26, Sahyadri Industries anticipates a path to recovery, driven by a good monsoon, stabilizing global supply chains, and improved price realization. Management expects a 'roughly 8% to 10% upside in the topline' for FY26. They also project that operating margins will be 'better than what we have already given for the year,' supported by cost optimization and pricing adjustments, despite ongoing challenges.

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