Concall AI

SPEB Adhesives Ltd — Q4 FY26 earnings call

Call held 19 May 2026

Management summary

Speb Adhesives Limited reported a strong Q4 FY26 with 12.7% revenue growth driven by volumes and an EBITDA margin of 17.87%. The company is expanding its manufacturing capacity by 4,950 tons/year with a new plant in Khalapur, expected by year-end 2026. Strategic focus includes geographical expansion across India, a shift towards water-based adhesives, and strengthening export markets, despite current raw material volatility and initial slow demand in Q1 FY27.

Highlights

Revenue grew 12.7% YoY, driven purely by volume growth, with price hikes (avg 13-14%) implemented late Feb/March 2026 to be reflected in the coming financial year.
EBITDA margin at 17.87% and PAT margin increased from 13.40% to 13.58%, supporting higher profitability.
New Khalapur plant will add 4,950 tons/year capacity, increasing total to 8,550 tons/year, with new capacity expected by year-end 2026.
Expanding geographical presence to North and South India, with a D2R pilot model in Rajasthan, and strengthening export team for Middle East.
Targeting a significant shift in product mix towards higher-margin water-based adhesives, aiming for 30% in 3 years and 50% in 7-8 years.

Concerns

Raw material prices (especially solvents) have been highly volatile and disruptive due to the war situation, though costs are passed on to clients.
PAT margin was impacted in March due to price increases not being fully passed on in that month.
Land acquisition for the new Khalapur plant is still pending due to government licensing issues, though expected to be resolved by next month-end.
Demand for the first month of Q1 FY27 (April) was slow, though May is showing improvement.

Key financials

01 Revenue Growth 12.7%
02 Volume Sold 2,866 tonnes +15.2%YoY
03 Capacity Utilization 79.6%
04 EBITDA Margin 17.9%
05 PAT Margin 13.6%

What they filed

₹ Cr · quarterly

Line item	Q4 FY25	Q2 FY26	Q4 FY26
Revenue	23	25	26
Expenses	19	20	22
EBITDA	4	5	4
Margin	18%	20%	16%
Other income	1	0	1
Interest	0	0	0
Depreciation	0	0	0
Profit before tax	5	5	4
Tax rate	31%	25%	27%
Net profit	3	4	3
EPS	1.85	2.07	1.43

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 Capex disclosed
- New manufacturing plant in Khalapur for additional capacity
To support our next phase of growth, we are setting up a new manufacturing plant in Khalapur. That's an additional capacity of 4950 tonnes, totaling both the capacities to 8550 tonnes per year.

Guidance & targets

Revenue

Revenue Growth Revenue · Future · Medium confidence 25-30%

Darshan: Firstly, congratulations on a good set of results, sir. So, just wanted to know that we've given, I think, a guidance of 25 to 30% growth. But the last two years, we've not been able to reach that level, right? So, what gives us the confidence in terms of achieving this guidance, sir? Gaurav Vithlani: So, you know, why am I confident? Because now we are on, we are very clear that we have a concrete roadmap for the next 10 years with respect to products, with respect to the industry, what we are targeting.

— Gaurav Vithlani

Profitability

ROI Payback Period for New Projects Profitability · For new projects · High confidence 3-4 years

generally see to it that within three to four years, we have that know, ROI in place.

— Gaurav Vithlani

Product Mix

Water-based adhesive share Product Mix · next 3 years · High confidence 30%

down the line, you may see a product needs of 70, 30 in next three years

— Gaurav Vithlani
Water-based adhesive share Product Mix · next 7-8 years · High confidence 50%

In the next 7 to 8 years, you might see 50-50%.

— Gaurav Vithlani

Capacity

New Khalapur plant readiness Capacity · by year-end 2026 · High confidence Ready

our new capacity would be ready by year-end

— Gaurav Vithlani

Marketing

Brand ambassador engagement Marketing · 3-4 years down the line · Medium confidence Viable

I guess this is not the correct time probably 3 years 4 years down the line were we have the proper penetration and reach that time it will be viable for us to do it.

— Gaurav Vithlani

Geographical Expansion

D2R pilot success and pan-India implementation Geographical Expansion · next two quarters · High confidence Successful, pan-India implementation

if that pilot is successful in next two quarters, we will start implementing that pan India with people.

— Gaurav Vithlani
Pan-India warehousing Geographical Expansion · next 10 years · High confidence Set up

next 10 years, our entire focus would be setting up our own warehousing pan India.

— Gaurav Vithlani

What to watch in Q1 FY27

Khalapur Plant Land Acquisition

next month-end

Current Still under acquisition due to government licensing issues

Target Acquisition completed

Why it matters

Completion of land acquisition is critical for the new plant's construction and timely capacity expansion, which underpins future volume growth.

our new capacity would be ready by year-end because the land is still under acquisition. Acquisition should be completed by next month because of the licensing issues with government.

Risks & concerns

Raw Material Price Volatility
high

Disruptive and volatile pricing of synthetic rubber, resins, and solvents due to war situation.

Management acknowledged
Land Acquisition Delay for New Plant
medium

Land acquisition for the Khalapur plant is still pending due to government licensing issues, though expected to be resolved by next month-end.

Management acknowledged
Slow Demand in Q1 FY27
medium

Demand for the first month of Q1 FY27 (April) was slow, though May is showing improvement.

Management acknowledged
Geopolitical Risks in Middle East
low

Current disruption, war, and economic slowdown in the Middle East, but management sees it as an opportunity and expects the region to recover strongly.

Management downplayed

Q&A highlights

8 direct

Revenue Growth Drivers Direct

So it was purely driven on volume base because the price hike whatever has happened has happened in this financial year, starting from April. Because for us the price implementation, the price hike started in late February or March. And we being in more of a retail space, we have to have few stocks and we have to support our clients. We have a good industrial base also. So there I cannot overnight increase the price. So whatever price implication we will see, you will see in the coming financial year. So last financial year was volume driven.

Clarifies that the 12.7% revenue growth was organic, driven by volumes, with price increases yet to fully impact financials, indicating future revenue tailwinds.

Asked by Vineet

New Project ROI & Payback Direct

Generally what happens is that newer plant which we are putting, it's a four acre plant and we'll be doing it phase wise. So any new growth what we see or any new CAPEX what we do, we generally see to it that within three to four years, we have that know, ROI in place.

Highlights management's focus on capital efficiency and a clear target for return on investment for new greenfield projects.

Asked by Vineet

Product Portfolio Shift Strategy Direct

So down the line, you may see a product needs of 70, 30 in next three years and probably it's a bigger market. So In the next 7 to 8 years, you might see 50-50%.

Outlines a significant strategic shift towards water-based adhesives, indicating a move into higher-margin, eco-friendly products and market diversification.

Asked by Dhaval Pandya

Raw Material Volatility and Price Pass-through Direct

So yes, the pricing have gone up, but ultimately those all pricing have to be passed on to the client and they have to bear it. ... So whenever we try to increase the price, we see to it that the price increases longitudinally. Because, you know, for a dealer distributor or an end user or bigger OEMs, it is difficult to take a price approval again and again. So we have that buffer generally and we work with that margin. In case of emergency, we have a 15 day window.

Confirms the company's ability to pass on raw material cost increases, mitigating margin risk, while also managing customer relationships through a buffer strategy.

Asked by Dhaval Pandya

Capacity Expansion and Ramp-up Direct

See, first capacity is only this. We have a 4-acre plant. We will be utilizing only, you know, around 20-30,000 square feet out of 1,60,000 square feet. So, whatever newer development with respect to the categories what we are planning to venture like epoxy and XYZ. So, that would be an additional, that would be a phase-wise development and phase-wise growth.

Provides details on the phased approach to new capacity utilization and future product category expansion, indicating a measured growth strategy.

Asked by Darshan

Geographical Expansion and D2R Model Direct

So we are doing a small pilot when it comes to our main vision of going D2R. So we are planning to set up a warehouse in Rajasthan where we'll be catering to each and every client from the company itself. So we'll have our own warehouse and own a different GST number under the same name. And we are trying that pilot model so that we have a deep penetration there.

Reveals a strategic shift towards a Direct-to-Retail (D2R) model, starting with a pilot in Rajasthan, which could significantly enhance market reach and penetration across India.

Asked by Aditya

Competitive Landscape and Market Opportunity Direct

In fact, you see the India population and there are only four players we are talking about. So there's no saturation. There's enough room for everyone to have business. One more fact I'll tell you. If you see the top line difference between player number one versus all the rest, that is me, Atul, Astral or XYZ, whatever, Pidilite is still the market leader dominating 75% of the market share in entire category of adhesives. So there's a lot of room for everybody to grow. So there's nothing where we cannot grow.

Management's perspective on market opportunity, despite Pidilite's dominance, suggests significant headroom for growth and reduced concerns about market saturation.

Asked by Akhilesh

Pricing Strategy vs. Pidilite Direct

Pidilite and us always have 20 to 25% price gap because they work on different margins. Their penetration is different and vis-a-vis all the clients. So all the A-line, me, Astral, Neurofix, which is a Neurolag. So these all have a price, similar price range category, pan India. Except Pidilite, everyone is under the same price range, approx.

Clarifies the company's competitive pricing strategy relative to market leaders, indicating a value proposition while maintaining similar pricing to other A-line players.

Asked by Aditya

2 min read 6 chapters

Detailed narrative

Strong Volume-Driven Revenue Growth

Speb Adhesives Limited reported a 12.7% year-on-year revenue growth for the financial year ended March 31, 2026, driven purely by strong volumes. The volume sold for the year reached 2,866 tonnes, up from 2,487 tons in the previous year, representing 79.60% of the current 3,600 tons per year capacity. Management noted that price hikes, averaging 13-14% across products, were implemented in late February/March 2026 and their full impact will be reflected in the coming financial year, indicating continued revenue tailwinds.

Strategic Capacity Expansion and Product Mix Shift

The company is undertaking a significant capacity expansion by setting up a new manufacturing plant in Khalapur, which will add 4,950 tonnes per year, bringing the total capacity to 8,550 tonnes per year. This new capacity is expected to be ready by year-end 2026. Strategically, Speb Adhesives aims to shift its product portfolio from 99% solvent-based to a mix of 70% solvent-based and 30% water-based adhesives within the next three years, further targeting a 50-50% split in 7-8 years, focusing on higher-margin and eco-friendly options.

Geographical Expansion and D2R Initiative

Speb Adhesives is actively working to reduce its historical dependency on Maharashtra, where it currently derives 64% of its revenue. The company plans to expand its foothold phase-wise, first in North and South India, and then pan-India. A Direct-to-Retail (D2R) pilot model is being launched in Rajasthan, involving setting up an own warehouse and GST number to cater directly to clients. If successful in the next two quarters, this model will be implemented pan-India to achieve deep market penetration.

Raw Material Management and Margin Resilience

The company acknowledged significant volatility and disruptive pricing in raw materials, particularly synthetic rubber, resins, and solvents, due to the ongoing war situation. Despite this, management confirmed its ability to pass on cost increases to clients, typically within a 10-15 day window, and noted that the market often absorbs an additional 1-2% margin during price falls, contributing to improved PAT and EBITDA. The EBITDA margin stood at 17.87%, and PAT margin increased from 13.40% to 13.58% for the financial year.

Competitive Positioning and Market Opportunity

Speb Adhesives operates in a market with few major players, with Pidilite dominating approximately 75% market share. Management believes there is 'enough room for everyone to have business' and significant growth potential. While maintaining a 20-25% price gap with Pidilite due to differing margins and penetration, the company positions itself with similar pricing to other A-line competitors like Astral and Nerofix, focusing on a value proposition and strong customer relationships.

Long-term Vision and Capital Efficiency

The company has a clear 10-year vision focused on becoming a comprehensive adhesive manufacturer for all home and office interior applications, including flooring, furniture, and wallpaper. For new greenfield projects and CAPEX, Speb Adhesives targets achieving a return on investment (ROI) within three to four years, reflecting a disciplined approach to capital allocation. The company also plans to establish its own pan-India warehousing network over the next decade to enhance distribution control.

This is an AI-generated summary of a publicly available earnings call transcript.

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