Shaily Engineering Plastics Limited

Shaily Engineering Plastics reported strong financial results for Q3 FY26, with revenue increasing 27% year-on-year to INR 251 crores. EBITDA grew even faster at 43% year-on-year, reaching INR 66 crores, which resulted in a significant EBITDA margin expansion of 310 basis points to 26.5%. The Healthcare segment was the primary growth engine, doubling its contribution to the overall revenue mix to 42% and achieving a 139% year-on-year revenue growth to INR 104 crores in the quarter.

The company announced a major strategic move to establish a new scalable facility in Abu Dhabi for manufacturing pen and auto-injectors. This planned investment, ranging from AED 130 million to AED 150 million (INR 300-350 crores), aims to build a capacity of approximately 75 million pen/auto-injectors per year. Expected to be operational by Q4 FY28, this facility will substantially increase Shaily's total pen injector capacity to 150 million units from the current 80 million units per year, enhancing its global footprint in GLP-1 and other advanced therapies.

Shaily is actively expanding its capacity in India, with the first of two new 25 million unit lines currently undergoing operational qualification and expected to be completed next week. Commercial production from this line is anticipated to begin in March, with a proper scale-up from April. The second new line is scheduled to arrive by end of April/beginning of May 2026 and is expected to be commercialized by end of July 2026, contributing to India's total pen injector capacity of 80 million units.

While the Healthcare segment demonstrated exceptional growth, the Consumer segment experienced a 13% year-on-year degrowth in Q3 FY26, with revenue at INR 123 crores, primarily due to demand slowdowns in Europe and the U.S. In contrast, the Industrial segment grew 87% year-on-year to INR 23 crores, driven by new client additions for power tool components and LED lighting applications. The company has also onboarded two new customers for GLP-1s and signed two new contracts for pen injector manufacturing.

The company is navigating complexities in qualifying its new high-speed lines, which are currently experiencing a 30% rejection rate due to machine settings, causing delays in ramping up GLP-1 injector supply. Furthermore, the healthcare segment has faced 10-15% price erosion on high-volume contracts, although management anticipates stabilization after the first 24 months of supply. Some income recognition for Q3 FY26 was deferred to Q4 FY26 due to delays in customer confirmations, despite associated costs being incurred.

To bolster its Healthcare division, Shaily appointed Mr. Joe Kam as Chief Operating Officer, effective March 1, 2026, leveraging his 20+ years of experience in regulated manufacturing. Beyond pen injectors, the company is exploring opportunities in semiconductor casings, expecting small quantities of supply in the new fiscal year, contingent on the ramp-up of chip manufacturing plants in India. The consumer electronics segment is also projected to go live within the next 12 to 18 months, indicating diversified growth avenues.