💰 Financial Performance

Revenue Growth by Segment

The company operates in a single reportable segment: PU/PVC Synthetic Leather. Consolidated Total Operating Income (TOI) grew at a 10% CAGR over the three years ending FY25. In Q2 FY26, standalone revenue reached INR 237.76 Cr (up 15% QoQ) and consolidated revenue reached INR 240.31 Cr (up 8% QoQ). The PU segment specifically saw a 48% value growth in Q2 FY26, reaching INR 7.80 Cr.

Geographic Revenue Split

Export revenue share increased to 42% in Q2 FY26, up from 38-40% in the previous quarter. The company is focusing on US and European OEM markets. Direct exports to the US are low as the company primarily supplies to seat cover manufacturers in Mexico to mitigate tariff impacts.

Profitability Margins

Net Profit Margin was 17.19% in FY25. PAT rose to INR 149 Cr in FY25 from INR 122 Cr in FY24 (a 22% increase). H1FY26 margins were impacted by a one-time INR 10 Cr provision for old inventory, causing a 119 bps moderation in PBILDT margin to 20.49%.

EBITDA Margin

PBILDT margin improved to 22.76% in FY25, up 232 bps from 20.45% in FY24. This improvement was driven by a favorable product mix, specifically high-margin automotive exports, and effective cost-control measures.

Capital Expenditure

The company maintains a low reliance on debt for expansion, utilizing healthy cash flow generation. While specific future INR figures for capex are not disclosed, the company has unencumbered liquid investments of INR 384 Cr as of March 31, 2025, to fund operations and growth.

Credit Rating & Borrowing

The company maintains a strong credit profile with a Debt-to-Equity ratio of 0.01x and an Interest Coverage Ratio of 133.24x. Total debt is negligible compared to a capital base of INR 962 Cr as of March 2025.

⚙️ Operational Drivers

Raw Materials

Key raw materials include PVC resin, PU resins, and various chemicals used in synthetic leather manufacturing. Raw material costs declined in FY24, which partially offset a decline in average sales realization.

Import Sources

Not specifically disclosed in the provided documents, though the company notes risks related to the 'irregular supply of raw material' globally.

Capacity Expansion

The company is ramping up its PU (Polyurethane) operations with a target to reach INR 100-125 Cr in revenue in the medium term. Current PU revenue is approximately INR 30 Cr (estimated for FY26).

Raw Material Costs

Raw material costs are a significant driver; higher input costs in FY23 led to a decline in PBILDT margin to 18.64% from 19.94% in FY22. The company uses cost-control measures to manage these fluctuations.

Manufacturing Efficiency

Capacity utilization is improving, supporting a healthy PBILDT margin of ~22%. The company employs data analytics in internal audits and 5S/Kaizen practices to enhance efficiency.

Logistics & Distribution

The company is expanding its retail distribution network for the 'Texture and Hues' brand, targeting 1,000 dealers (over 700 already established as of November 2024).

📈 Strategic Growth

Expected Growth Rate

10-12%

Growth Strategy

Growth will be achieved through a 10-12% increase in TOI supported by new client/model additions in the automotive OEM segment, the progressive ramp-up of PU operations to INR 100-125 Cr, and the expansion of the 'Texture and Hues' retail furnishing brand to 1,000 dealers.

Products & Services

PU/PVC Synthetic Leather used in automotive upholstery, footwear, and home furnishing.

Brand Portfolio

Texture and Hues (Retail Furnishing).

New Products/Services

Expansion into the retail furnishing business via the 'Texture and Hues' brand, which targets the 40% of the synthetic leather market currently held by the retail sector.

Market Expansion

Focusing on becoming a preferred supplier for leading OEMs in the USA and European regions. Export orders from US OEMs are already being received.

🌍 External Factors

Industry Trends

The synthetic leather industry is evolving with a shift toward PU leather and premium automotive interiors. Mayur is positioning itself by ramping up PU capacity and targeting high-end global OEMs to capture this growth.

Competitive Landscape

Faces competition from other synthetic leather manufacturers and rising logistics costs from global competitors.

Competitive Moat

The moat is built on strong entry barriers in the automotive OEM supply chain, which requires rigorous product approvals and long-term relationships. This is sustainable due to the company's established track record and high-quality standards (IATF practices).

Macro Economic Sensitivity

Sensitive to global automotive demand and consumer discretionary spending in the footwear and furnishing sectors.

Consumer Behavior

Shift toward premium automotive interiors and branded home furnishings is driving demand for the company's high-end PVC and PU products.

Geopolitical Risks

Low impact from US-China or US-Mexico tariffs as the company supplies to Mexican units for local processing (cutting/stitching) rather than direct US export.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with IATF (International Automotive Task Force) practices for automotive supply and SEBI (LODR) regulations for corporate governance.

Environmental Compliance

The company faces risks related to the non-biodegradability of synthetic leather; it provides training on chemical handling and MSDS to ensure safety compliance.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ramp-up speed of the PU project and the potential for environmental regulations to restrict non-biodegradable synthetic leather.

Geographic Concentration Risk

Significant exposure to the Mexican market for automotive exports, which serves as a hub for the North American market.

Third Party Dependencies

Dependency on raw material suppliers for PVC and PU resins; irregular supply is cited as a key business risk.

Technology Obsolescence Risk

Risk of shift toward genuine leather or new bio-based synthetic alternatives; the company is mitigating this by investing in PU technology.

Credit & Counterparty Risk

Strong receivables management with a Debtor Turnover Ratio of 3.33 times and a current ratio of 8.08x, indicating high liquidity and low counterparty risk.