Concall AI

Srivari Spices & Foods Ltd — Q2 FY26 earnings call

Call held 24 Nov 2025

Management summary

Srivari Spices and Foods Limited delivered a strong H1 FY26, with significant revenue and PAT growth driven by expanded distribution and brand recognition. The company is actively diversifying its product portfolio into edible oils, soya chunks, and planned devotional goods, leveraging its existing network. While new segments are in initial phases with lower margins, management is optimistic about future growth and maintaining profitability, focusing on home markets and strategic product launches.

Highlights

Revenue grew by 49.08% YoY to ₹78.77 crores, demonstrating strong top-line performance.
PAT increased by 46.66% YoY to ₹7.20 crores, indicating healthy profit growth.
EBITDA margin remained robust at 17.05%, reflecting operational efficiency.
Expanded distribution to over 18,000 retail outlets and 40 KPN stores, strengthening market presence.
Received the 'Excellence in FMCG Spices brand award' at ET Excellence Awards 2025, enhancing brand credibility.

Concerns

Oil segment is in a launch phase with minimal margins and low utilization (5% of revenue, 10% utilization of 720 tons capacity).
Launch of Pooja and Devotional products has been delayed to January 2026.

Key financials

01 Revenue ₹78.77 Cr +49.1%YoY
02 EBITDA ₹13.43 Cr
03 PAT ₹7.2 Cr +46.7%YoY
04 EBITDA Margin 17.1%
05 PAT Margin 9.1%

What they filed

₹ Cr · quarterly

Line item	Q2 FY25	Q4 FY25	Q2 FY26	Q4 FY26
Revenue	53	61	79	96
Expenses	44	52	65	79
EBITDA	9	9	13	16
Margin	17%	15%	17%	17%
Other income	0	0	0	1
Interest	1	1	2	2
Depreciation	1	1	2	2
Profit before tax	7	7	10	13
Tax rate	28%	36%	29%	30%
Net profit	5	5	7	9
EPS	5.73	5.38	8.40	10.54

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

medium confidence

Capex Capex disclosed
- Soya Chunks plant (planned for FY27 after 2 quarters of testing)
- Pooja products (initial low CAPEX for packaging material)
No, as of now we didn't go for the plant actually. We are repacking it. After one shield kit, just standard shields, we will go for the plant. Install the capacity later, after 2 quarters.
Debt Debt disclosed
- New borrowing One OD (Overdraft) came on the last day of September, contributing to short-term borrowings.
Actually, mainly there was one OD came on the last day of September. So, that contributed so much towards short-term borrowings. That was one of the main reasons.
M&A Paushtik (via Srivari Supply Chain) Divestment · Closed

Srivari Supply Chain, which owned Paushtik, was sold and is no longer connected to Srivari Spices and Foods Limited.
No longer connected to Srivari Spices and Foods Limited.

Regarding Paushtik, as we have already informed, and even in the AGM also it was discussed, we have totally sold Srivari supply chain. It is no more connected to Srivari, the supply chain and the Paushtik. It belongs to the supply chain and that company is no longer a wholly owned subsidiary company. It is not connected to Srivari anymore.

Guidance & targets

Profitability

H2 FY26 Performance Profitability · H2 FY26 · High confidence Better than H1 FY26

Yes, definitely. Yes, that is true. H2 will be better in terms of margin. Oil was launched recently, so we need some time to pick up the revenues from the Oil. So, H2 will be better in the Oil. So, that will be picked up very well. So, H2 will be better than H1.

— Narayan Das Rathi
EBITDA Margin Profitability · Ongoing · High confidence 17%

Yes, true, actually. So, if you go for the selection of a segment, all are high margin segments. We are not going into the competitive market or low margin products. That is our USP to maintain this EBITDA. We can maintain easily EBITDA.

— Narayan Das Rathi

Growth

FY27 Performance Growth · FY27 · Medium confidence Best in company history

Growth will be, as I said, we will maintain better growth. As I said, new products are launched, so might be 100% will achieve. Exactly, I can't comment on that. But it will be better than, FY '27 will be the best in our past complete history.

— Narayan Das Rathi
Overall Growth Growth · FY26 · Medium confidence Better than past growth

Previously 100% growth for FY26 → Better than past growth

No. I think we are optimistic about this revenues, but due to some delays, so we can't check exactly the numbers. But the growth will be maintained as the past growth will be maintained better than that. What we did in the past 3 years that will be better than, in percentage wise you will find everything better, EBITDA as well as PAT and revenue, all will be better than in percentage.

— Narayan Das Rathi

Capacity Utilization

Oil Segment Utilization Capacity Utilization · H2 FY26 · High confidence 30%

I think next financial year, H2 will be utilized almost 30% easily. We can reach up to 30%. Now, we can utilize up to 30% in this H2.

— Narayan Das Rathi

Revenue

Oil Segment Revenue Revenue · H2 FY26 · Medium confidence ₹30-40 crores

H2. Earlier, you guided around Rs. 30-Rs. 40 crore revenue from this. We can expect that? Yes.

— Narayan Das Rathi

New Product Launch

Pooja Products Launch New Product Launch · January 2026 · High confidence January

For your information, it is not yet launched. It will be launched in January, delayed. So, that revenue sharing will be next year Financial Year only.

— Narayan Das Rathi

Geographical Expansion

Export Markets Entry Geographical Expansion · FY27 · Medium confidence Middle East, Singapore, US

Definitely. But in FY '27. Next year, we will plan for the expansion. Next year, we are into the planning for that.

— Narayan Das Rathi

Capex

Soya Chunks Plant Capex · FY27 · Medium confidence Planning for plant

After 2, so maybe FY '27 you are planning for a plant? Yes, we are planning for that.

— Narayan Das Rathi

Marketing Spend

Monthly Ad Spend Marketing Spend · Monthly · High confidence ₹5-6 lakhs

So, altogether monthly we are spending Rs. 5-Rs. 6 lakhs on the media channels, new media channels.

— Narayan Das Rathi

What to watch in Q3 FY26

Oil Segment Utilization and Revenue

H2 FY26

Current 10% utilization of 720 tons capacity, 5% of revenue

Target 30% utilization and ₹30-40 crores revenue

Why it matters

Indicates the success of the new Oil segment and its contribution to overall growth and profitability.

I think next financial year, H2 will be utilized almost 30% easily. We can reach up to 30%. Now, we can utilize up to 30% in this H2. ... Earlier, you guided around Rs. 30-Rs. 40 crore revenue from this. We can expect that? Yes.

Risks & concerns

Margin dilution from new product launches (Oil, Pooja products)
medium

New products like Oil are in launch phase with minimal margins; Pooja products will initially use third-party packaging to manage CAPEX and risk, but management expects margins to improve over time.

Analyst acknowledged
Distraction and resource strain from launching too many new products
medium

Management believes leveraging existing distribution in home states (AP & Telangana) makes new product placement easy and quick, mitigating distraction.

Analyst downplayed
High competition and costs in new geographical markets
medium

Management prefers portfolio expansion in home states over immediate geographical expansion due to high advertising budgets and established brands in new states.

Management acknowledged

Q&A highlights

8 direct

Segment-wise revenue breakup and product mix Direct

Revenue-wise break-up, if you see here, we have did 45% with the Atta and 40% with the Spices including blended Spices and both. And 5% is with the Oil, actually. This is the revenue break-up. ... So, you can take it as 50% is Atta, 45% is from Spices and 5% is from Oil.

Clarified the product-wise revenue contribution, which was initially misstated, providing a clearer picture of the business mix.

Asked by Subhanu from 3Head Capital

Oil segment margins and profitability timeline Direct

As of now, the margin is not better in the Oil because it is in the launch phase. But definitely in the next quarter, we will pick up the margin in Oil also. ... No, exactly breakeven only, not in the losses. ... And it will get part positive from FY '27, is that correct? Yes, definitely.

Provided clarity on the current profitability of the new Oil segment (breakeven) and the expected timeline for positive margins (FY27).

Asked by Maitri Shah from Sapphire Capital

Status of Paushtik e-commerce initiative Direct

Regarding Paushtik, as we have already informed, and even in the AGM also it was discussed, we have totally sold Srivari supply chain. It is no more connected to Srivari, the supply chain and the Paushtik. It belongs to the supply chain and that company is no longer a wholly owned subsidiary company. It is not connected to Srivari anymore.

Clarified that Paushtik is no longer part of the company's operations, addressing a potential area of investor confusion.

Asked by Subhanu from 3Head Capital

Rationale for entering Pooja and devotional products Direct

Yes, exactly. This product is actually, 95% market is unorganized. So, we have a very good potential and growth and margins in that. So, no other brand in India is focusing fully on this. ... So, we are trying to get into the organized segment as well as the purity also. 90% of the purity is lacking in that segment.

Explained the strategic rationale behind entering the devotional products segment, highlighting the large unorganized market and potential for high margins and purity focus.

Asked by Resha Mehta from GreenEdge Wealth

Concern about launching too many new products and potential distraction Direct

So, rather than doing that, we have decided to go with the portfolio, which is having existing stores, same stores, same market, same distributors. So, it will be very much easy. The timeline will be very short. We can place our product within the quarter.

Addressed concerns about over-diversification by emphasizing the strategy of leveraging existing distribution in home markets to facilitate new product launches efficiently.

Asked by Resha Mehta from GreenEdge Wealth

Increase in short-term borrowings in H1 FY26 Direct

Actually, mainly there was one OD came on the last day of September. So, that contributed so much towards short-term borrowings. That was one of the main reasons.

Provided a specific reason for the increase in short-term debt, attributing it to a single overdraft facility.

Asked by Tanmay Bhat, Individual Investor

Strategy to scale the Oil category given low utilization Direct

As of now, we are in the launch phase. And the product will be soon placed on all the e-commerce platforms. We are trying to get some exclusive deals with Big Basket and Amazon. ... Normal will be launched in the general trade and all the modern trade. We are focusing on the modern trade in that.

Outlined the multi-channel strategy, including e-commerce partnerships and modern trade focus, to ramp up the Oil segment's utilization and revenue.

Asked by Tanmay Bhat, Individual Investor

Competition in the groundnut oil segment Direct

No. In fact, we do not have much competition in general in this groundnut oil. Very less brands are there in the pure groundnut oil. So, the initial challenges are only placement challenges. But we are having very good response from the market.

Management asserted a lack of significant competition in the 'pure groundnut oil' segment, suggesting a favorable market position despite initial low utilization.

Asked by Jayesh, Investor

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

Srivari Spices and Foods Limited reported a robust H1 FY26, with revenue reaching ₹78.77 crores, marking a significant 49.08% year-on-year growth. Profit After Tax (PAT) also saw a substantial increase of 46.66% year-on-year, totaling ₹7.20 crores. The company maintained a healthy EBITDA margin of 17.05% and a PAT margin of 9.14%, reflecting strong operational efficiency and profitability during the period.

Product Mix and New Segment Diversification

The company's H1 FY26 revenue was primarily driven by Atta (50%) and Spices (45%), with the newly launched Edible Oils contributing 5%. Srivari has introduced Soya Chunks and plans to launch a new business vertical focused on puja articles and devotional goods in January 2026. This diversification targets a 95% unorganized market with high growth and margin potential, leveraging existing distribution channels.

Distribution Expansion and Market Presence

Srivari has significantly expanded its distribution network, now reaching over 18,000 retail outlets across Andhra Pradesh and Telangana. Recent efforts include increased shelf presence in 29 Ushodaya supermarket stores, 13 premium Balaji Grand Bazaar outlets, and other stores. The company has also strengthened its modern trade footprint and online presence through partnerships with DMart and Big Basket.

Marketing and Brand Building Initiatives

To enhance brand awareness and support new product launches, Srivari is investing ₹5-6 lakhs monthly in advertising across regional TV channels such as Big TV, NTV, and Bhakti TV. The company's brand credibility was further boosted by receiving the 'Excellence in FMCG Spices brand award' at the ET Excellence Awards 2025 and being featured in Forbes India in August 2025.

Capital Allocation and Debt Management

The company's short-term borrowings increased in H1 FY26 due to an Overdraft facility availed at the end of September. While no heavy CAPEX is planned for new manufacturing units in the immediate term, as new products are initially repacked or sourced, Srivari anticipates planning for a Soya Chunks plant in FY27. The company intends to use debt for future expansion needs.

Strategic Outlook and Future Growth

Management is optimistic about sustaining growth momentum, expecting H2 FY26 to outperform H1, particularly in margins and Oil segment revenue. They project FY27 to be the 'best in company history' in terms of growth. While geographical expansion to states like Karnataka, Gujarat, and Odisha is planned for FY27, the immediate focus remains on portfolio diversification within existing markets to ensure cost-effectiveness and faster market penetration.

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

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