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SONAM LIMITED — Q1 FY27 earnings call

Call held 20 Jul 2026

Management summary

Sonam Limited delivered a strong Q1 FY27 performance, with significant revenue, EBITDA, and PAT growth driven by new product launches and operational efficiency. While the exceptional Q1 growth is not expected to be sustained, the company aims for 25-30% full-year growth, supported by continuous innovation and B2C expansion. Management highlighted its unique design models and advance raw material procurement as key strengths, ensuring profitability despite market fluctuations.

Highlights

  • Revenue from operations increased by 75.65% YoY to ₹66.57 crores.

  • EBITDA grew by 78.02% YoY to ₹5.38 crores, with EBITDA margin at 8.06%.

  • Profit After Tax (PAT) increased by 126.99% YoY to ₹3.00 crores, with PAT margin at 4.49%.

  • Successful launch of new products including premium designer wall clocks and digital calendar clocks.

  • Company is comfortable funding future growth through internal accruals with no immediate borrowing requirements.

Concerns

  • The high Q1 growth of 75.65% is not sustainable for the full year, with guidance at 25-30%, partly due to raw material stock benefits in Q1.

  • Margin side is fluctuating due to daily raw material price changes.

  • Minor impact on exports due to geopolitical situation leading to increased prices.

Key financials

  1. Revenue from Operations ₹66.57 Cr +75.6%YoY
  2. EBITDA ₹5.385 Cr +78%YoY
  3. EBITDA Margin 8.1%
  4. PAT ₹3.002 Cr +127%YoY
  5. PAT Margin 4.5%

What they filed

Q1 FY27: revenue up 75.6%, net profit up 127.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue24 25 32 38 31 +28%38 +51%64 +101%67 +76%
EBITDA3 4 3 3 2 −18%4 −2%6 +101%5 +100%
Net profit1 2 2 1 1 −33%2 +4%3 +71%3 +127%
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.

Guidance & targets

Revenue

  • Full-year Revenue Growth Revenue · FY27 · Medium confidence 25% to 30%
    Yes, we hope that 25% to 30% growth will be sustained.

    — Jayeshbhai Shah

  • Next Quarter Revenue Revenue · Q2 FY27 · Medium confidence Rs. 40 crores to Rs. 50 crores minimum
    For the next quarter we hope that revenue will be around Rs. 40 crores to Rs. 50 crores minimum.

    — Jayeshbhai Shah

Capacity

  • Capacity Utilization Capacity · Quarter-to-quarter · High confidence 60% to 70%
    Capacity utilization is 60% to 70%.

    — Jayeshbhai Shah

Product

  • New Product Launches Product · Ongoing · High confidence Every month
    Yes. Every month I am launching new product.

    — Jayeshbhai Shah

Market Strategy

  • B2C Segment Entry Market Strategy · Ongoing · High confidence Started via Flipkart, Amazon
    In B2C, I have started in just a few months. Flipkart, Amazon.

    — Jayeshbhai Shah

Product Strategy

  • Value Product Focus Product Strategy · 2027-28 · Medium confidence Sell clocks in range of Rs. 5,000 to Rs. 10,000
    So, our segment, our market planning is we will sell clock in the range of Rs. 5,000 to Rs. 10,000 and develop such items in this year, 2027-28.

    — Jayeshbhai Shah

What to watch in Q2 FY27

Full-year Revenue Growth Trajectory

next quarter
Current Q1 FY27 growth at 75.65%
Target Growth normalizing towards 25-30% full-year guidance

Why it matters

To assess if the company can maintain its guided growth rate after an exceptionally strong Q1 driven by specific factors.

Yes, we hope that 25% to 30% growth will be sustained. ... No, I think it is not possible to end every quarter in this type because this quarter we had stock of raw material, so many raw materials and now prices have increased.

Risks & concerns

  • Sustainability of High Growth Rate

    medium

    Q1 FY27 growth of 75.65% is not expected to be sustained for the full year, which is guided at 25-30%, partly due to one-time benefits from raw material stock.

    Analyst acknowledged

  • Raw Material Price Fluctuations

    medium

    Margin side is fluctuating due to daily raw material price changes, though management has a strategy of advance purchasing to mitigate this.

    Both acknowledged

  • Impact of Geopolitical Situation on Exports

    low

    There is a minor impact on exports due to increased prices, but the company's diversified market presence (corporate, local, pan India) helps offset this.

    Analyst downplayed

  • Design Replication by Competitors

    low

    While designs are not patented, management counters replication through continuous new product development and rapid iteration, making it difficult for smaller manufacturers to keep up.

    Analyst acknowledged

Q&A highlights

8 direct
Sustainability of Q1 Growth vs. Full-Year Guidance Direct
No, I think it is not possible to end every quarter in this type because this quarter we had stock of raw material, so many raw materials and now prices have increased. According to that profit has occurred more. Costing was down and we got good price.

Clarifies that the exceptional Q1 growth rate of 75.6% is not indicative of the full-year trajectory, which is guided at 25-30%, due to specific raw material benefits in Q1.

Asked by Shivam Gupta

Raw Material Price Increase Management Direct
We carry the raw material plan for 12 months. At the time when the raw material is expected to increase, we purchase raw material for six, seven months. So, we will not have any such problem of raw material. The way the prices are increasing in the market right now, instead we will get the benefit because we buy the raw material in advance.

Details the company's strategy to mitigate raw material price volatility through advance planning and purchasing, which is crucial for margin stability.

Asked by Vaibhav Parekh

Competitive Differentiation and Design Replicability Direct
They will make it but we have a continuous new development. So, look, it takes six months, seven months or 12 months for someone to make a model and till then new models come and the models which have duplication we change a lot in that. The dials change, the colors are different. I mean, a lot of changes happen in a single model. So, due to the new in-house development, the small manufacturers will not be able to develop so quickly.

Explains how Sonam maintains its competitive edge despite non-patented designs, emphasizing continuous innovation and speed of new product development as key barriers to replication.

Asked by Pragyan Ladda

Cost to Rebuild Plant and Asset Valuation Direct
Actually, if we want to build such a big plant, then according to me, it will not be possible to do it quickly because in this market, after so much hard work, we have made so many new models and everything, and we are improving it. So, if someone wants to make a new one today, then let us say it can come with an investment of more than Rs. 200 crores. It will not be less than that. ... And according to me today our value of property will be more than Rs. 100 crores.

Provides a qualitative estimate of the significant investment required to replicate Sonam's manufacturing capabilities and the current value of its property, highlighting a substantial entry barrier.

Asked by Pragyan Ladda

Funding Future Growth Requirements Direct
No requirements for now.

Indicates the company's strong internal accruals and financial health, suggesting no immediate need for external borrowing for growth initiatives.

Asked by Ashika Lokwani

Differentiation from Unorganized and Imported Products Direct
Imported wall clock costing comes more when we import. Freight cost is also more. So, Infront of that our everything is inhouse. Secondly, unorganized sectors have more segment in Rs. 500 and below and we have segment of Rs. 500 clock and above. So, in that we do not have that much problem because of that.

Explains Sonam's competitive positioning by highlighting cost advantages over imports and focusing on a higher price segment (above Rs. 500) where unorganized players are less prevalent.

Asked by Ashika Lokwani

Entry into B2C Segment Direct
Yes. Every month I am launching new product. In B2C, I have started in just a few months. Flipkart, Amazon.

Confirms the company's strategic move into the B2C segment through e-commerce platforms, indicating a new channel for growth and market reach.

Asked by Bhaskar Khandra

Next Quarter Revenue Outlook Direct
For the next quarter we hope that revenue will be around Rs. 40 crores to Rs. 50 crores minimum. It also depends on the monsoon and the situation in tier two and tier three cities. And going forward there is festival season, so according to us whatever was there in the 1st Quarter that much should be there.

Provides a specific revenue target for the upcoming quarter, along with key dependencies like monsoon and festive season, offering short-term visibility.

Asked by Piyush Wala

2 min read 6 chapters

Detailed narrative

Strong Q1 FY27 Performance

Sonam Limited reported a robust Q1 FY27, with revenue from operations increasing by 75.65% year-on-year to ₹66.57 crores. This strong top-line growth translated into significant profitability improvements, with EBITDA rising by 78.02% to ₹5.38 crores, achieving a margin of 8.06%. Profit After Tax (PAT) saw an even sharper increase of 126.99% to ₹3.00 crores, resulting in a PAT margin of 4.49%. The management attributed this performance to strong operational execution and demand across its product portfolio.

Product Innovation & Market Strategy

A key highlight of the quarter was the successful launch of several new and innovative clock models, including premium designer wall clocks, digital calendar clocks, Night Glow, decorative wall clocks, and modern lifestyle clocks. These launches are strategically planned to cater to evolving consumer preferences and strengthen the company's presence across premium and value segments. The company aims to expand its product portfolio further, with a focus on selling clocks in the ₹5,000 to ₹10,000 range by 2027-28, emphasizing value over volume.

Raw Material Management & Margins

The company acknowledged that margins are fluctuating due to daily changes in raw material prices. However, management has a proactive strategy of carrying a 12-month raw material plan and purchasing for six to seven months in advance when price increases are anticipated. This approach helps mitigate the impact of price volatility, and in Q1, the company benefited from existing raw material stock, contributing to higher profits.

Capacity Utilization & Growth Outlook

Current capacity utilization stands at 60% to 70% on a quarter-to-quarter basis. While Q1 FY27 saw an exceptional revenue growth of 75.65%, management clarified that this pace is not sustainable for the full year. The company expects to sustain a full-year growth rate of 25% to 30%. For the next quarter (Q2 FY27), revenue is projected to be around ₹40 crores to ₹50 crores minimum, with performance dependent on monsoon and festive season demand.

Competitive Differentiation & Asset Value

Sonam Limited differentiates itself through unique design models, in-house designers, and continuous new product development, which makes it challenging for smaller manufacturers to replicate their offerings quickly. The company also positions itself above the sub-₹500 segment, where unorganized players are more prevalent, and benefits from lower costs compared to imported products due to in-house manufacturing. Management estimated that rebuilding a similar plant today would cost over ₹200 crores, and the current property value is over ₹100 crores, highlighting significant entry barriers.

B2C Expansion & Future Product Focus

The company is actively expanding its presence in the B2C segment, having started operations on e-commerce platforms like Flipkart and Amazon in recent months. This move is part of a broader strategy to expand distribution across underserved markets and achieve wider market penetration. Sonam Limited, already the second-largest clock manufacturer and the first in India to offer a wide range of new products, is committed to continuous innovation and strengthening its leadership position.

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