Stylam Industries Limited

Stylam Industries reported a robust Q3 FY26 with a turnover of ₹271 crores, marking a 6.45% year-on-year growth. For the nine-month period, the company achieved ₹846 crores, an 11.38% increase. Profitability saw significant improvement, with PAT margin rising to 16.97% in Q3 FY26 from 11.95% in the prior year, primarily due to a reduction in forward contact losses. EBITDA margin also expanded to 20.51% from 18.07% YoY, attributed to efficient sourcing and inventory management.

The company highlighted its strategic partnership with Aica Kogyo, emphasizing it as an investment reflecting confidence in Stylam's long-term growth. This partnership is expected to introduce global technologies, product innovation, and best manufacturing practices. Aica Kogyo acquired a 27% stake from a former promoter and will conduct an open offer for an additional 26%, aiming for a total stake of 40%, potentially reaching 53% if tendered. Management confirmed that Stylam's promoter directors will remain, and Aica Kogyo will not be involved in day-to-day operations.

Work on the new manufacturing facilities is progressing and is now on track for commissioning by March 2026, despite a 2-3 month delay due to EC approval. The total planned investment for this project is approximately ₹320 crores, with ₹227 crores already deployed. The CAPEX was revised upwards from an initial ₹225-250 crores due to the addition of another press and new advanced machines. The new plant is expected to contribute ₹300-400 crores in revenue in its first year, with a target of 75-80% utilization within two years, aiming for ₹700-1000 crores at full capacity.

Exports continued to be a key driver, growing 6.75% in Q3 FY26 and 30.59% for the nine-month period. Domestic turnover increased by 5.68% in Q3 FY26 and 6% for 9M FY26. Management acknowledged slower domestic growth in the past due to internal issues, which are now resolved. With new leadership for the domestic market, the company aims to be among the top three in India within 2-3 years, focusing on value-added products and expanding its sales team with 100 new personnel. The new plant's sales mix is projected to be 70% export and 30% domestic.

Despite raw material cost pressures, the company's EBITDA margin improved due to efficient sourcing. Regarding US tariffs, management stated that the 50% duty is being absorbed by US customers, and reordering is expected to resume by February, potentially leading to a 15-20% jump in US sales in the next two months. For Europe, the current 6.5% import duty is expected to reduce to 0% once trade agreements are finalized, which will enhance competitiveness for organized Indian players.

Management explicitly stated that past internal family issues, which had affected the focus on the domestic market and specific product lines like solid surfaces, have been resolved. This resolution is expected to allow the company to aggressively pursue growth in both domestic and export markets, with a renewed focus on all product categories, including solid surfaces, which will now be managed as part of HPL.