💰 Financial Performance

Revenue Growth by Segment

In Q2 FY26, the Consumerware segment grew 23% YoY, Writing Instruments grew 16% YoY to INR 81 Cr, and the Furniture business grew 8% YoY to INR 84 Cr. Total revenue for Q2 FY26 was INR 587 Cr, up 20% YoY.

Profitability Margins

Gross Margin for FY 2024-25 was 51.7% (down 87 bps from 52.6% in FY 2023-24). PAT Margin for FY 2024-25 was 17.1% (down 74 bps from 17.8% in FY 2023-24). H1 FY26 PAT margin stood at 14.2%.

EBITDA Margin

EBITDA Margin for FY 2024-25 was 26.0% (down 75 bps from 26.7% in FY 2023-24). H1 FY26 EBITDA margin was 24.0% (22% excluding other income).

Capital Expenditure

Total capital expenditure in FY 2024-25 was INR 171.45 Cr, with INR 114.09 Cr allocated to capital work in progress. The company plans to invest approx. INR 50 Cr over one year to enhance writing instrument manufacturing infrastructure.

Credit Rating & Borrowing

The Debt Equity Ratio improved to 0.00 in FY 2024-25 from 0.27 in FY 2023-24. Interest Coverage Ratio increased significantly to 339.28 from 187.03.

⚙️ Operational Drivers

Raw Materials

Steel (used in steel ware), Glass (for glassware/opalware), and plastic resins (implied for furniture/writing instruments). Steel costs have risen due to supply shortages from OEM manufacturers.

Key Suppliers

OEM manufacturers for steel ware; other specific suppliers not named.

Capacity Expansion

Glass manufacturing facility in Falna has an installed annual capacity of 20,000 tonnes. Writing instruments currently have 30-35% empty capacity at the Unomax facility, which can be expanded with additional machines.

Raw Material Costs

Raw material costs are impacted by supply shortages in steel, leading to higher procurement costs from OEMs. The company has not yet fully passed on these cost increases to consumers, impacting gross margins by 87 bps in FY25.

Manufacturing Efficiency

In-house manufacturing accounts for 78% of revenues as of H1 FY26. Glass plant utilization is currently at 55-60% and is expected to reach 80% by Q4 FY26.

Logistics & Distribution

The company leverages a network of distributors and retailers; specific distribution costs as a % of revenue are not disclosed.

📈 Strategic Growth

Expected Growth Rate

12-15%

Growth Strategy

Growth will be driven by the re-introduction of the 'Cello' brand in writing instruments via a royalty-free lease, targeting INR 200 Cr revenue in the first year (CY 2026). Additionally, the company is ramping up its Falna glass plant to 80% utilization and expanding product lines in mechanical pencils and arts stationery.

Products & Services

Writing instruments (pens, mechanical pencils), stationery, glassware, opalware, consumerware (steel ware), cleaning aids, and molded furniture.

Brand Portfolio

Cello, Unomax, Kleeno.

New Products/Services

New product launches in mechanical pencils, arts stationery, and internationally licensed kids' products. The 'Cello' brand writing instruments are expected to contribute INR 200 Cr in CY 2026.

Market Expansion

Expanding sales and distribution networks in both domestic and international markets to reduce reliance on single distributors.

Strategic Alliances

Agreement with CPIW to lease the 'Cello' trademark for stationery and writing instruments at no additional cost or royalty.

🌍 External Factors

Industry Trends

The industry is seeing a revival in stationery driven by new product categories like mechanical pencils and licensed products. There is a shift toward branded quality products over unorganized sector offerings.

Competitive Landscape

Intense competition from unorganized businesses and established brands in the writing instruments and consumerware segments.

Competitive Moat

Strong brand recall for 'Cello' (30-year-old brand) and 'Unomax'. High in-house manufacturing (78%) provides a cost advantage and better quality control compared to competitors relying on outsourcing.

Macro Economic Sensitivity

Revenue is sensitive to festive demand, which supported the 23% growth in Consumerware in Q2 FY26.

Consumer Behavior

Increasing consumer preference for premium quality branded products and festive-led purchasing patterns.

⚖️ Regulatory & Governance

Industry Regulations

Recent GST rate changes had a minimal impact on the product portfolio.

Taxation Policy Impact

Tax expense was INR 126.7 Cr in FY 2024-25, representing an effective tax rate of approximately 25.8%.

Legal Contingencies

A composite scheme of arrangement is pending before the National Company Law Tribunal (NCLT), Ahmedabad Bench.

⚠️ Risk Analysis

Key Uncertainties

The gestation phase of the new glass plant may continue to impact overall margin structures until 80% utilization is reached. Counterfeit products from unorganized entities pose a risk to brand integrity.

Third Party Dependencies

Dependency on OEM manufacturers for steel ware products, which has recently led to supply shortages and higher costs.

Technology Obsolescence Risk

The company is mitigating this by integrating automation and IT solutions into design and manufacturing processes.

Credit & Counterparty Risk

The company monitors financial positions to ensure obligations to creditors and suppliers are met; current ratio is healthy at 9.31.