💰 Financial Performance

Revenue Growth by Segment

Green Products segment revenue grew 71% QoQ to INR 12.3 Cr in Q2 FY26 and 63% YoY in H1 FY26. High-tech Products segment revenue grew 42% QoQ to INR 48.8 Cr in Q2 FY26, though it declined 30% YoY in H1 FY26.

Geographic Revenue Split

Not disclosed in percentage terms, but foreign subsidiaries Arrow UK and Europe are reported as generating substantial revenues with expansion plans for South America and Africa.

Profitability Margins

Gross Profit Margin was 52.4% in Q2 FY26, down from 57.4% in Q2 FY25. PAT Margin stood at 25.3% in Q2 FY26 compared to 28.2% in Q2 FY25.

EBITDA Margin

EBITDA Margin was 34.0% in Q2 FY26, reflecting a decrease from 40.6% in Q2 FY25, primarily due to a 30% YoY decline in the high-margin High-tech Product segment during H1.

Capital Expenditure

Capital Work-in-Progress (CWIP) was INR 1.5 Cr as of September 30, 2025. Property, Plant, and Equipment (PPE) stood at INR 29.4 Cr.

Credit Rating & Borrowing

Not disclosed, but finance costs are minimal at INR 0.1 Cr for Q2 FY26, suggesting low reliance on external debt.

⚙️ Operational Drivers

Raw Materials

Not disclosed in specific chemical terms, but includes materials for water-soluble and bio-compostable films.

Import Sources

China is identified as a source for competitive extruded films.

Capacity Expansion

Not disclosed in MT/units, but the company is scaling its Green Products segment which saw a 71% QoQ revenue increase.

Raw Material Costs

Total raw material costs (including stock in trade) were INR 29.0 Cr in Q2 FY26, representing 47.5% of total revenue.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth will be achieved by scaling the Green Products segment (up 63% YoY in H1), commercializing 27 granted patents through Arrow UK, and expanding high-tech security exports to the EU, EEA, South America, and Africa.

Products & Services

Water-soluble films, bio-compostable films, and high-tech security products used for anti-counterfeiting and document fraud protection.

Brand Portfolio

Watersol, Avery Pharmaceuticals.

New Products/Services

Expansion of bio-compostable films within the Green Products segment, which contributed 20% of Q2 FY26 revenue.

Market Expansion

Targeting expansion into Europe, South America, and Africa through Avery Pharmaceuticals and Watersol divisions.

🌍 External Factors

Industry Trends

Global shift toward sustainability is driving the 63% YoY growth in Green Products. Increasing global document fraud is driving demand for high-tech security features.

Competitive Landscape

Competition from Chinese manufacturers of non-standard extruded films and potential technological obsolescence.

Competitive Moat

Strong IP moat with 27 granted patents and 43 pending applications globally, protecting niche water-soluble and security film technologies.

Macro Economic Sensitivity

High sensitivity to geopolitical developments and global shifts, which contributed to a 30% YoY decline in the High-tech Product segment in H1 FY26.

Consumer Behavior

Increasing consumer and industrial preference for environmentally responsible and sustainable packaging solutions.

Geopolitical Risks

Geopolitical developments are cited as a primary threat to business fluctuations and segment performance.

⚖️ Regulatory & Governance

Industry Regulations

Operations are influenced by global sustainability mandates and anti-counterfeiting standards.

Environmental Compliance

Not disclosed in absolute INR, but sustainability is a core business imperative driving the Green Products segment.

Taxation Policy Impact

Effective tax rate of approximately 24% in Q2 FY26 (INR 5.0 Cr tax on INR 20.8 Cr PBT).

Legal Contingencies

No non-compliance or penalties imposed by SEBI, Stock Exchanges, or other statutory authorities in the last three years.

⚠️ Risk Analysis

Key Uncertainties

Geopolitical developments and technological obsolescence are key risks; the High-tech segment saw a 30% YoY revenue decline in H1 FY26.

Geographic Concentration Risk

Not disclosed in percentage terms, but has significant exposure to the UK and European markets.

Technology Obsolescence Risk

High risk due to the niche nature of products; mitigated by a pipeline of 43 pending patent applications.

Credit & Counterparty Risk

Trade receivables stood at INR 71.9 Cr as of September 30, 2025, up from INR 58.5 Cr in March 2025.