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Srivasavi Adhesive Tapes Limited — Q4 FY26 earnings call

Call held 10 Jun 2026

Management summary

Srivasavi Adhesive Tapes reported a 22% YoY revenue growth to ₹109.98 crores in FY26, driven by significant capacity expansion and entry into new high-barrier sectors. However, PAT declined to ₹6.01 crores due to heavy investments, increased input costs, and underutilized new capacity, leading to margin pressure. The company is focused on backward integration, R&D, and operationalizing new units to drive future profitable growth and achieve a ₹1,000 crore revenue target.

Highlights

  • Revenue from operations increased by 22% YoY to ₹109.98 crores in FY26.

  • Workforce expanded from 280 to 357, reflecting increased capacity.

  • Successfully entered high-barrier sectors, securing first contract with Defense PSUs and approvals from Indian Railways.

  • Tangible assets grew by ₹19.56 crores, with ₹10.58 crores in CWIP, indicating significant capacity expansion.

  • Exports grew 20% YoY in Q3 FY26, with plans for overseas presence.

Concerns

  • Profit after tax (PAT) declined to ₹6.01 crores in FY26 from ₹6.80 crores in FY25, despite revenue growth.

  • Basic EPS annualized decreased to ₹4.24.

  • Margin pressure due to increased cost of metal consumed (₹83.08 crores), higher finance costs (₹47 lakhs from ₹28 lakhs), and increased depreciation (₹144 lakhs from ₹110 lakhs) from underutilized new capacity.

Key financials

  1. Revenue from Operations ₹109.98 Cr +22%YoY
  2. Total Income ₹110.48 Cr
  3. Profit After Tax ₹6.01 Cr -11.6%YoY
  4. Basic EPS ₹4.24
  5. Cost of Metal Consumed ₹83.08 Cr
  6. Finance Cost ₹0.47 Cr +67.8%YoY
  7. Depreciation ₹1.44 Cr +30.9%YoY

What they filed

Q4 FY26: revenue up 54.1%, net profit up 50.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY23Q4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue31 29 40 37 40 +29%50 +72%53 +33%57 +54%
EBITDA3 3 4 4 5 +67%4 +33%4 +0%5 +25%
Net profit2 2 3 2 4 +100%2 +0%3 +0%3 +50%
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 funded with 17.05 crores on a net financing inflow
    • Asset additions and new units (Unit 2, 3, 4, 5) ₹17.14 Cr
    • Polymer division (Unit 5) ₹10 Cr
    • Unit 6 (estimated) ₹5 Cr
    Investing outflow of 17.14 cr almost entirely for our capex program and we funded that with 17.05 on a net financing inflow.
  • Debt Debt disclosed
    • New borrowing Long-term borrowing rose ₹7.23 Cr
    • New borrowing Short-term borrowings ₹11.73 Cr
    Capacity that is not yet generating revenue but will fund this long-term borrowing rose up 7.23 crores. Short-term borrowings 11.73 crores. Our debt level remain modest relative to our equity base. But they are higher than the last previous years.
  • Liquidity Liquidity disclosed Small net reduction in cash during FY26, characterized as a peak investment year.
    The results was a small net reduction in cash. I would characterize FY26 as a peak investment year for cash.

Guidance & targets

Revenue

  • Total Revenue Revenue · Long-term goal · High confidence ₹1,000 crores
    We are working towards our all-time goal of 1,000 cr revenue of the company built on four pillars.

    — D N Anilkumara

Sales

  • Annual New Sales Plans Sales · This financial year (FY27) · Medium confidence ₹160-175 crores
    our annual New sales plans somewhere around 160 to 175.

    — D N Anilkumara

Operations

  • Polymer Division (Dobbaspet unit) Go-Live Operations · FY27 · High confidence Operational
    Our polymer division which is in Dobbaspet unit targeted to go live by 26-27 year.

    — D N Anilkumara

  • Unit 6 Start of Production Operations · Within 4 months · High confidence Operational
    This may take another four months to give us start of production.

    — D N Anilkumara

R&D

  • R&D Spend as % of Revenue R&D · Yearly · High confidence 0.5-1%
    Yeah, we are almost investing not less than 0.5 to 1%.

    — D N Anilkumara

Market context

  • Operating Margin Profitability · This year (FY27) · High confidence Double digit
    no we are I'm precisely aiming this year for double digit I will try to achieve that

    — D N Anilkumara

What to watch in Q1 FY27

Operating Margin Improvement

This year (FY27)
Current Under pressure due to investments and underutilization
Target Double-digit operating margin

Why it matters

Management explicitly aims for double-digit operating margin this year, which is crucial for profitability given the PAT decline in FY26.

no we are I'm precisely aiming this year for double digit I will try to achieve that

Risks & concerns

  • Margin pressure from underutilized new capacity and high input costs

    high

    PAT declined despite revenue growth due to increased cost of metal consumed, higher finance costs, and depreciation from new assets not yet fully utilized; operating leverage expected in future.

    Management acknowledged

  • Competition from Chinese and Korean manufacturers

    medium

    Market is flooded with Chinese and Korean products, but Srivasavi focuses on high-end, value-added products where specifications are the driving mode, not price, supported by backward integration.

    Analyst acknowledged

  • Raw material price volatility

    medium

    Most raw materials depend on crude derivatives; price increases take about 90 days to pass on, with the company able to absorb OPM compression for 2-3 months.

    Analyst acknowledged

Q&A highlights

8 direct
Competition from China/Korea and anti-dumping duty strategy Direct
See we are main high-end value added product. We are not working on a generic product. very value added products. When we go for a anti-dumping duty, we need to show up our capabilities because these are all specification oriented, specification driven product largely comes from high-end manufacturers which is not so easy to have a anti-dumping as a nature because institutional buyers also need to accept that definitely we are working to get into the institutional where product specifications are there. We are working on towards it. We are not working on a generic in nature. We are always working on a speciality product where specifications are a driving mode rather than a price as a drive mode.

Clarifies company's strategy to focus on high-end, specification-driven products to counter competition, rather than relying on anti-dumping duties.

Asked by CHIRAG BARASARA

Entry into EV battery pack segment Direct
very much true. We are already signed NDA with the many of the battery pack manufacturer, battery manufacturers. Yes, already many of them visited us, evaluated us, they suggested us and we are unit 2 is planned for upgradation. what they have wanted like manufacturing need to be there like a clean room facility all those things we are upgrading in unit 2 according to their requirements.

Confirms the company's active engagement and progress in the high-growth EV battery pack market, including facility upgrades.

Asked by CHIRAG BARASARA

Revenue and margins from Aerospace division Direct
about 4% roughly about 4%. ... Definitely it'll be a more than double digits. I don't want to explain but it is a double digits.

Provides specific revenue contribution from a high-margin sector and indicates significantly higher profitability compared to other segments.

Asked by CHIRAG BARASARA

Breakdown of Capital Work In Progress (CWIP) Direct
It's a basically it's a polymer division. Okay. where we are going to manufacture fabrics for our own captive consumption as well as advertisement sector and it is a capacity of 6,000 tons a year. We invested almost about 10 crores in this polymer division itself.

Details the nature and scale of a significant portion of the company's current investments, highlighting backward integration and new product capabilities.

Asked by Jigar Shah

Operational status and commissioning timeline of Unit 6 Direct
Yeah, unit 6 is not yet operational but we already took it on lease. Power connections are underway and we are installing the started making our own machine and installation is also getting hand in hand. Okay, we are installing a solar energy as our main motor to control our cost. This may take another four months to give us start of production.

Provides a clear timeline for the commissioning of a new manufacturing unit and highlights cost-saving measures through solar energy.

Asked by Kashvi Dedhia

Margin differentiation between specialty and commodity tapes Direct
yeah specialtity highend specialtity and specialtity what we call and some of the specification oriented. Specification oriented always on three digit and some of the things speciality will be two digits and commodity will be of one or nearly two digits.

Explains the company's product mix strategy and the significantly higher margins associated with specialty and specification-oriented products, justifying the focus on high-end segments.

Asked by Kashvi Dedhia

R&D efforts and innovation to improve margins Direct
We are already working on a huge NPD team with the NPD team. Some of the cases like we are recreating the specifications like overspec material to underspec or actual requirement of the specifications. We have a total R&D and NPD lab. Now we are planning for NABL accredation to that. We have a one of the good lab which we can do a very well cross-section analysis of the any international product and redesign the product in our scope along with we can make use of innovating the things.

Highlights the company's commitment to R&D and innovation as a key driver for future margin expansion and competitive advantage, including specific initiatives like NABL accreditation.

Asked by Tejas Shirodker

Impact of raw material price volatility on operating margins Direct
Yeah, we can compress at least two three months. No problem. ... After that it will be revived.

Provides insight into the company's ability to absorb raw material price increases for a limited period before passing them on or seeing margins revive, indicating short-term resilience.

Asked by CHIRAG BARASARA

2 min read 5 chapters

Detailed narrative

FY26 Performance and Investment Phase

Srivasavi Adhesive Tapes reported a 22% year-on-year revenue growth, reaching ₹109.98 crores in FY26, marking its highest-ever topline. However, Profit After Tax (PAT) declined to ₹6.01 crores from ₹6.80 crores in the previous year. This decline was attributed to FY26 being a 'peak investment year,' characterized by significant capital expenditure, increased input costs (cost of metal consumed rose to ₹83.08 crores), higher finance costs (₹47 lakhs), and increased depreciation (₹144 lakhs) from newly commissioned but underutilized assets.

Capacity Expansion and Strategic Market Entry

The company significantly expanded its manufacturing footprint, utilizing IPO proceeds to add new units (Unit 2, 3, 4 started, Unit 5 in CWIP). This expansion doubled its square footage to two lakh sq ft and increased its workforce from 280 to 357. Strategically, Srivasavi entered high-barrier sectors, securing its first contract with Defense PSUs, engaging with Electronic Manufacturing Services (EMS), and receiving part one approval from Indian Railways for auto adhesive tapes. These moves are aimed at import substitution, as India's specialty tape market is over 65% import-dependent.

Backward Integration and R&D Focus

To enhance competitiveness and protect margins, Srivasavi is focusing on backward integration, including developing its in-house pressure-sensitive adhesive and sealants polymer division, targeted to go live by FY27. The company is also investing 'not less than 0.5 to 1%' of its revenue in R&D, with a dedicated NPD team and a lab pursuing NABL accreditation. These efforts are crucial for developing high-end, specification-driven products, which yield 'more than double digits' margins compared to commodity tapes (20-25% of revenue).

Future Growth Pillars and Long-Term Vision

Srivasavi has set an ambitious long-term goal of achieving ₹1,000 crores in revenue, built on four pillars: backward integration, capacity expansion, sector diversification, and export scale-up. The company's annual new sales plans for the current financial year are projected to be between ₹160-175 crores. Management is 'precisely aiming' for double-digit operating margins this year, expecting operating leverage to improve as new capacities, including Unit 4 and the upcoming Unit 6 (expected to start production within four months), become fully utilized.

Raw Material and Working Capital Dynamics

The company acknowledged that most of its raw materials are dependent on crude derivatives, leading to price volatility. While price increases generally take about 90 days to pass on to customers, Srivasavi can absorb operating margin compression for 'two to three months' before margins revive. Working capital days typically range from a minimum of 75 to over 100 days, influenced by OEM customer terms.

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