Stylam Industries Limited — Q1 FY27 earnings call

Call held 24 Jul 2026

Management summary

Stylam Industries Limited reported a strong Q1 FY27 with EBITDA margins exceeding 20%, driven by operational efficiency and higher utilization. The new plant's commercial production is now slated for September 1, 2026, with an anticipated ₹250-300 crore revenue contribution this fiscal year. While domestic market restructuring is ongoing and expected to yield results from Q3 FY27, the company faces challenges from persistent raw material volatility and the re-implementation of 10% US tariffs.

Highlights

  • EBITDA margin exceeded 20% in Q1 FY27, attributed to efficiency and higher utilization, with expectations of maintaining 19-20% plus margins.

  • New plant is expected to achieve 20-30% plus capacity utilization in its first year, contributing ₹250-300 crores in revenue for FY27.

  • Domestic market restructuring involves team building, new distributors, warehouses, and is expected to show results from Q3 FY27.

  • Existing plant capacity still has room for growth, with a 5-10% gap in laminates and acrylic capacity being completely empty.

  • Exports are strong, with Europe, APAC, and the Middle East performing well.

Concerns

  • New plant commissioning has been delayed multiple times and is now targeted for September 1, 2026, from an earlier August target.

  • Domestic growth remains in low single digits despite price hikes, with full market revamp expected to take 2-3 quarters.

  • US tariffs were re-implemented at 10% as of July 24, 2026, impacting export competitiveness.

  • Raw material prices remain volatile and are not expected to decrease drastically even if geopolitical situations improve.

Key financials

  1. EBITDA Margin 20%

What they filed

Q1 FY27: revenue up 15.2%, net profit up 71.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue263 255 265 283 292 +11%271 +6%283 +7%326 +15%
EBITDA54 46 43 53 57 +6%56 +22%55 +28%69 +30%
Net profit34 30 29 28 37 +9%46 +53%38 +31%48 +71%
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
    once plant is operated by end August, early September, definitely we will announce about our new capex.
  • M&A Aica Acquisition · Integrated

    Aica has taken 40% shareholding and officially joined this month, acting as a strategic partner.

    No immediate changes in operations or exports, but potential for technology transfer and sourcing of acrylic solid surfaces in the future.

    So, sir, this new partner, I saw Exchange Filing that they have taken 40% shareholding and they are in place now. So, on ground level how things are changing now, like we talked about this tech transfer for Japanese high-pressure laminates and certain business initiatives such as sourcing acrylic solid surfaces or any other new development which is happening on the ground? Sir, nothing as of now because they have officially joined this month. Secondly, no involvement from their side as they are themselves, they are a strategic partner. And as of now there is no discussions about export to them or anything of that sort.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · post new capex start · High confidence 19-20% plus
    I think the margins will remain the same, that is why even when the new capex will start end of August. So, we can expect the similar kind of margins 19%, 20% plus.

    — Jagdish Gupta

Capacity

  • New Plant Capacity Utilization Capacity · first year · High confidence 30% plus
    I think we want to be conservative on the call, so that's why I gave a figure of 30% plus on the capacity utilization for the first year.

    — Manit Gupta

Revenue

  • New Plant Revenue Contribution Revenue · current financial year · High confidence ₹250-300 crores
    I think based on the value of what you were saying, around INR250 crores to INR300 crores, it would be easily achieved from the third plant.

    — Manit Gupta

Domestic Market

  • Domestic Market Revival Domestic Market · Q3 FY27 onwards · High confidence results from Quarter 3 onwards
    And you will definitely see the results from Quarter 3. I won't even say Quarter 2, but you will see the results from Quarter 3 onwards.

    — Manit Gupta

Capex

  • New Capex Announcement Capex · by end August, early September · High confidence announced
    So that is why, once plant is operated by end August, early September, definitely we will announce about our new capex.

    — Manit Gupta

Operations

  • New Plant Commercial Production Operations · September 1st, first week of September · High confidence September 1st
    Commercial production would be 1st of September, first week of September.

    — Manit Gupta

What to watch in Q2 FY27

New Plant Commercial Production

next quarter
Current Targeted for September 1, 2026
Target Successful commercial production by September 1, 2026

Why it matters

Timely commissioning is crucial for realizing the projected revenue contribution and capacity utilization for FY27.

Commercial production would be 1st of September, first week of September.

Risks & concerns

  • New Plant Commissioning Delays

    medium

    The new plant's commercial production has been delayed multiple times, now targeting September 1, 2026, due to 'old family problems', environmental clearances, and rain.

    Management acknowledged

  • Slow Domestic Market Revival

    medium

    Despite restructuring efforts and price hikes, domestic growth remains low, with visible results expected only from Q3 FY27, indicating a longer turnaround time.

    Management acknowledged

  • US Tariff Re-implementation

    medium

    The 10% US tariff on exports was re-implemented as of July 24, 2026, which could impact export competitiveness and margins.

    Management acknowledged

  • Raw Material Price Volatility

    medium

    Raw material prices (phenol, melamine) are subject to geopolitical situations and are not expected to decrease drastically even if the war stops, posing a risk to cost management.

    Management acknowledged

  • Logistics Challenges for Exports

    low

    Logistics remains a 'very big problem' for exports globally, though management states it is being managed.

    Management acknowledged

Q&A highlights

8 direct
Margin spike and sustainability Direct
No, no inventory gain. nothing. It is our efficiency and it is our more utilization and if you go for sales figures it is increased. So, when sales increase, the expenses automatically reduce.

Clarifies that the higher EBITDA margin is due to operational efficiency and utilization, not one-time inventory gains, suggesting sustainability.

Asked by Dhruv Bajaj

New capex ramp-up strategy Direct
It will be on a month-on-month basis only. So, there is no POs in our industry that we get a PO for entire year. Plus, what we are looking at for the first year, maybe 20% to 30% plus capacity utilization for the new plant.

Provides insight into the expected ramp-up pace and initial utilization levels for the new plant, indicating a gradual rather than immediate full capacity deployment.

Asked by Dhruv Bajaj

Delay in major capex announcement Direct
No, it's not yet. To be honest, we are actually evaluating the other options side-by-side. We had to, but I think we might delay it for until next quarter because our first focus is just to start this plant, which is more important rather than running around and getting more capex done.

Explains the reason for delaying the announcement of the next major capex, prioritizing the current plant's commissioning, which impacts future growth visibility.

Asked by Dhruv Bajaj

Focus of future capex Direct
In laminates there will be a saturation for every company. We do not actually want that. It would be product going along laminates. Which would help us actually strengthen, which would help us strengthen the domestic market first.

Indicates the strategic direction for future capacity expansion, focusing on product diversification within the laminate ecosystem to bolster the domestic market rather than just adding more laminate capacity.

Asked by Dhruv Bajaj

Reasons for new plant commissioning delays Direct
I think you're right. I think I'll answer your second question first. Whatever you are expecting around INR300 crores revenue from this third plant would definitely be there. And the delay was due to multiple reasons. I think due to our old family problem, I think we ourselves slowed down the project. But now everything is okay, and that's why we have actually restarted the work. And there is no risk further ahead.

Addresses the persistent delays in plant commissioning, attributing them to internal 'family problems' and reassuring that issues are resolved with no further risks.

Asked by Resha Mehta

Domestic market restructuring strategy Direct
And the steps are very simple. I think we are just restructuring the team, getting new people on Board, getting that confidence in the market which was not there for especially for the domestic market. If in exports we are doing such numbers, why not domestic? Whereas the entire industry is the other way around where domestic is the core business for them and export is a small smaller business for them, whereas only for Stylam it was the other way around.

Details the specific actions being taken to revive the domestic business, highlighting a shift in focus to strengthen a previously underperforming segment.

Asked by Resha Mehta

US tariffs on exports Direct
No, as of now it's 10%, but I think today morning it came a news that US is implementing because the 10% had to go 0% from 24th of July, which was today. So, I think now that, they have re-implemented that 10% again. So, I think it would be 10% only right now going forward, but the today's today morning news came, we have to recheck it once.

Provides an immediate update on the US tariff situation, confirming the re-implementation of a 10% tariff, which is crucial for export strategy and competitiveness.

Asked by Resha Mehta

Employee cost decline in Q1 FY27 Direct
Yes, I got your point. So basically, in the last portion we are doing some actuarial valuation. So that actuarial valuation we have considered in the audited balance sheet in the last year. So, this is because of that. In the six months when we compare to six months, we are doing actuarial valuation based on six-monthly basis. So, this is the Q1, so actuarial valuation we have not considered here. Hello? Yes, ma'am, I think it's, okay?

Clarifies that the 10% Q-on-Q decline in employee cost is due to actuarial valuation adjustments in the previous year, not a fundamental change in current quarter operations.

Asked by Anu Parakh

2 min read 6 chapters

Detailed narrative

Q1 FY27 Performance and Margin Expansion

Stylam Industries Limited reported a strong Q1 FY27, with EBITDA margins exceeding the 20% mark, which management previously considered a ceiling. This margin expansion is attributed to enhanced operational efficiency and higher capacity utilization, rather than any inventory gains. Management expects to sustain similar margins of 19-20% plus even after the new capex comes online by the end of August.

New Plant Commissioning and Revenue Outlook

The commissioning of the new plant has faced multiple delays, now targeting commercial production by September 1, 2026. These delays were attributed to internal 'family problems,' environmental clearances, and heavy rains. Despite the delays, the new plant is projected to contribute ₹250-300 crores in revenue during the current financial year, with an expected capacity utilization of 20-30% plus in its first year of operation.

Domestic Market Restructuring and Strategy

The company is actively restructuring its domestic business to improve its performance, which has seen low single-digit growth despite price hikes. This involves rebuilding the team, onboarding new distributors, establishing new warehouses, and regaining market confidence. Management anticipates that the results of these efforts will become visible from Q3 FY27 onwards, aiming to make the domestic market a core business segment, similar to industry peers.

Aica Partnership and Future Expansion

Aica has officially joined as a strategic partner with a 40% shareholding this month. While there are no immediate operational changes or export collaborations, the partnership is expected to facilitate technology transfer and potential sourcing of acrylic solid surfaces from Stylam for Aica's worldwide distribution. The company is also evaluating options for a new capex, which will focus on product lines complementary to laminates to strengthen the domestic market, with an announcement expected by early September.

Export Market Performance and Challenges

Stylam's export markets are performing well, particularly in Europe, APAC, and the Middle East. However, the company faces challenges from the re-implementation of a 10% US tariff on July 24, 2026, which could impact competitiveness. Global logistics issues also remain a 'very big problem' for exports, though management states they are actively managing these challenges.

Raw Material and Pricing Outlook

Raw material prices, including phenol (around USD 1,400 per ton) and melamine (USD 1,000-1,100), remain volatile and are highly dependent on the global geopolitical situation. Management does not foresee a drastic reduction in prices even if the war stops, expecting any decline to be slow over 6-9 months. The company has implemented multiple price hikes across various product segments in the domestic market, which are expected to remain intact unless raw material costs significantly decrease.

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