💰 Financial Performance

Revenue Growth by Segment

Overall revenue from operations grew 10.06% YoY, reaching INR 2,674.37 Lakhs for H1 FY26 compared to INR 2,429.81 Lakhs in H1 FY25. Segment-specific growth was not disclosed in the available documents.

Profitability Margins

Net Profit Margin declined from 3.81% in H1 FY25 to 2.35% in H1 FY26. Profit Before Tax (PBT) margin stood at 5.57% (INR 148.86 Lakhs) for H1 FY26, compared to 5.28% (INR 128.29 Lakhs) in H1 FY25, showing a slight improvement in core operational profitability before tax impacts.

EBITDA Margin

EBITDA margin is approximately 8.54% for H1 FY26, calculated from a PBT of INR 148.86 Lakhs plus Finance Costs of INR 54.40 Lakhs and Depreciation of INR 25.17 Lakhs. This represents a steady operational performance despite rising input costs.

Capital Expenditure

Tangible assets increased by INR 59.24 Lakhs during the half-year, growing from INR 1,097.55 Lakhs as of March 31, 2025, to INR 1,156.79 Lakhs as of September 30, 2025, indicating ongoing investment in property, plant, and equipment.

Credit Rating & Borrowing

Total borrowings stood at INR 2,876.80 Lakhs as of September 30, 2025. This includes Long-Term Borrowings of INR 1,295.69 Lakhs and Short-Term Borrowings of INR 1,581.11 Lakhs. Specific credit ratings and interest rate percentages were not disclosed.

⚙️ Operational Drivers

Raw Materials

Not disclosed in available documents, though the company operates in the rubber manufacturing sector.

Capacity Expansion

Current installed capacity and specific expansion timelines were not disclosed in the available financial statements.

Raw Material Costs

Cost of Material Consumed was INR 1,876.05 Lakhs for H1 FY26, representing 70.15% of total revenue. This cost increased by 7.52% YoY from INR 1,744.76 Lakhs, indicating that raw material price fluctuations significantly impact the company's bottom line.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The company is leveraging its status as a listed entity on the NSE EMERGE SME platform (listed July 7, 2023) to access capital markets for scaling operations. The 10.06% YoY revenue growth indicates a strategy focused on increasing market penetration in the industrial rubber products sector.

Products & Services

Industrial rubber products, including conveyor belts and related rubber-based manufacturing components.

🌍 External Factors

Industry Trends

The industrial rubber sector is evolving with increased demand for high-durability conveyor systems in mining and infrastructure. As an SME-listed company, Pentagon is positioned to capture niche growth but faces competition from larger, more integrated players.

Competitive Landscape

The company operates in a fragmented market with competition from both large-scale organized manufacturers and smaller unorganized local players.

Competitive Moat

The company's moat is derived from its specialized manufacturing capabilities in the rubber sector and its early-mover advantage as a listed SME, providing better transparency and capital access than unorganized competitors.

Macro Economic Sensitivity

The company is sensitive to industrial production indices and infrastructure spending, which drive demand for rubber conveyor belts and industrial components.

⚖️ Regulatory & Governance

Industry Regulations

The company is subject to industrial manufacturing standards and pollution control norms applicable to rubber processing units.

Taxation Policy Impact

The effective tax rate for H1 FY26 was 57.7%, a significant increase from 27.8% in H1 FY25, which severely constrained net profit growth.

Legal Contingencies

No specific pending court cases or case values were disclosed in the provided limited review financial notes.

⚠️ Risk Analysis

Key Uncertainties

High tax volatility and a 42.15% increase in short-term borrowings (from INR 1,112.26 Lakhs to INR 1,581.11 Lakhs) present significant financial risks.

Credit & Counterparty Risk

Trade receivables increased 18.1% to INR 1,845.41 Lakhs, representing 69% of H1 revenue, indicating high credit exposure to customers and potential collection risks.