POKARNA - Pokarna

📊 NSE: POKARNA 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 11:05

💰 Financial Performance

Revenue Growth by Segment

Standalone revenue from operations for H1 FY26 was INR 9.52 Cr, representing a 34.4% decline compared to INR 14.52 Cr in H1 FY25. Standalone revenue for Q2 FY26 was INR 4.65 Cr, a 45.5% YoY decline from INR 8.53 Cr in Q2 FY25. The group operates in Granite and Engineered Quartz segments.

Geographic Revenue Split

Exports account for over 96% of the group's total revenue. The US market is the primary geographic driver, contributing over 80% of total revenue in fiscal 2025.

Profitability Margins

Standalone other income for Q2 FY26 was INR 2.14 Cr, which includes a dividend of INR 2.08 Cr from its subsidiary Pokarna Engineered Stone Limited (PESL), down 50% from the INR 4.17 Cr dividend received in Q2 FY25. Group operating margins are described as healthy but face pressure from US tariffs.

EBITDA Margin

The group maintains healthy operating margins; however, a revenue decline of 20-25% would significantly impact these margins. Expected annual net cash accrual is INR 170-200 Cr for fiscals 2026-2028.

Capital Expenditure

The group's networth stood at INR 777 Cr as of March 31, 2025. Unsecured loans from promoters and related parties totaling INR 55.34 Cr are treated as debt and are expected to be repaid by March 31, 2026.

Credit Rating & Borrowing

CRISIL A-/Stable (Long-term) and CRISIL A2+ (Short-term). Bank limit utilization averaged 38% for the 12 months through January 2025. Yearly term debt obligations are approximately INR 50-60 Cr.

⚙️ Operational Drivers

Raw Materials

Granite blocks (sourced from own quarries), Quartz, and Resins. Standalone cost of materials consumed was INR 0.59 Cr in H1 FY26, representing 6.2% of standalone revenue.

Import Sources

Granite blocks are sourced from owned quarries in Andhra Pradesh, Telangana, and Tamil Nadu. Manufacturing technology is sourced from Italy.

Key Suppliers

Breton S.p.A (Italy) provides patented technology and equipment for manufacturing engineered quartz surfaces.

Capacity Expansion

Pokarna is the largest exporter of quartz surfaces from India and a leading exporter of granite slabs and blocks. Specific MTPA capacity figures were not disclosed in the available documents.

Raw Material Costs

Standalone material costs decreased from INR 1.97 Cr in H1 FY25 to INR 0.59 Cr in H1 FY26, a 70% reduction following the decline in standalone operations.

Manufacturing Efficiency

Bank limit utilization of 38% indicates significant operational headroom and financial flexibility.

Logistics & Distribution

Distribution is heavily export-oriented (>96%), making the group sensitive to global shipping rates and container availability.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The group is pursuing geographic diversification to reduce reliance on the US market following the 50% tariff imposition. This includes expanding sales reach in new international markets and leveraging its exclusive relationship with Breton S.p.A for high-quality quartz products.

Products & Services

Granite slabs, granite blocks, and engineered quartz surfaces.

Brand Portfolio

Pokarna, Pokarna Engineered Stone Limited (PESL).

Market Expansion

Targeting expansion in non-US global markets to offset the impact of US trade restrictions.

Market Share & Ranking

Largest exporter of quartz surfaces from India.

Strategic Alliances

Exclusive partnership with Breton S.p.A for patented quartz surface manufacturing technology.

🌍 External Factors

Industry Trends

The industry is facing increased protectionism in the US market, forcing Indian exporters to shift focus toward domestic and other international markets. Pokarna is positioned as a technology leader via its Breton partnership.

Competitive Landscape

Leading Indian exporter competing with global quartz and granite suppliers.

Competitive Moat

Durable competitive advantage through exclusive access to Breton S.p.A's patented technology and a 30-year track record in the stone industry. This technology moat allows for premium product differentiation in the quartz segment.

Macro Economic Sensitivity

Highly sensitive to US residential housing demand and global construction cycles.

Consumer Behavior

Demand is driven by consumer preferences for high-end engineered stone surfaces in kitchen and bathroom renovations.

Geopolitical Risks

Significant risk from US trade policy, specifically the 50% reciprocal tariff on Indian stone exports.

⚖️ Regulatory & Governance

Industry Regulations

Subject to US import regulations, including a 50% reciprocal tariff and a 2.34% countervailing duty. Operations must comply with mining regulations in AP, Telangana, and Tamil Nadu.

Legal Contingencies

The group notes 'Claims and contingencies' in its financial statements (Notes 18 and 34), but specific INR values were not disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ability to maintain order flow and margins in the US market following the 50% tariff hike. Potential revenue decline of 20-25% is a key monitorable.