Yasho Industries Limited

Yasho Industries reported a robust Q3 FY26 with revenue reaching ₹201.83 crores, marking a significant 35% year-on-year growth. For the nine-month period, the company achieved a revenue of ₹583.76 crores, reflecting a 19% year-on-year increase despite ongoing pricing volatility in certain product categories. The company maintained healthy profitability, with an EBITDA margin of 16.65% for Q3 FY26 and 17.06% for the 9-month period, attributed to sourcing efficiencies and operational discipline.

The company's strategic manufacturing project with a large MNC is progressing as planned, with an estimated cost of ₹85-90 crores, fully funded by the customer, and an advance of ₹19.9 crores already received. Commercialization for this project is targeted for Q1 FY28. In parallel, Yasho Industries has deployed ₹25.9 crores for two new manufacturing lines, with trial runs expected in March '26 and commercial production planned for Q1 FY27. Total capex for the first nine months of FY26 was approximately ₹60 crores, with some planned capex deferred.

To mitigate risks from tariff volatility^🌐 and macroeconomic challenges^🌐, Yasho Industries is actively diversifying its geographical footprint, expanding into South America, Africa, and other Asian markets. The evolving India-EU trade environment is expected to support improved engagement, with the company's European subsidiary benefiting from strong demand visibility for the coming year, positioning it for accelerated growth and deeper market penetration in this strategic region.

While the Pakhajan facility continued to operate below optimal utilization, currently at 40-45% and having dropped below 50% since Q2, the impact on margins was effectively contained. This was achieved through a combination of product mix refinement, improved throughput efficiency, and disciplined cost control initiatives. Gross margin compression in Q3 was primarily attributed to a change in product mix and geographical diversification, rather than tariff impact^🌐s.

The company's gross debt levels are expected to stabilize in the coming quarter, with current borrowings (including promoter loan) at ₹560 crores, comprising ₹500 crores in bank loans and ₹50 crores from promoters. Reducing leverage and lowering the debt-to-EBITDA multiple remains a central financial priority. This is supported by a sharp focus on cash flow generation, working capital discipline, and anticipated further improvement in working capital days in Q4 FY26.

Yasho Industries aims for a revenue potential of approximately ₹1,500 crores by FY28, leveraging around 40% utilization of its Pakhajan facility. The optimal utilization for Pakhajan is projected to be 80-85% by FY28, which could generate revenues in the range of ₹750-850 crores. The company expects to maintain a long-term EBITDA margin of 17-19% and targets 15-25% annual growth, supported by a 4:1 revenue to capex ratio for incremental investments. The contribution of the industrial segment to total sales is expected to increase from the current 85-90% to 90-95% in the next two years.