💰 Financial Performance

Revenue Growth by Segment

The company operates in a single business segment (Pipes and Cables). Revenue from operations for H1 FY26 was INR 60.69 Cr, representing a 22.6% YoY decline from INR 78.44 Cr in H1 FY25.

Profitability Margins

Net Profit Margin improved to 3.23% in H1 FY26 from 2.05% in H1 FY25. Gross profitability is impacted by material costs which consumed 71.8% of revenue in the current half-year.

EBITDA Margin

Operating profit before working capital changes was 7.6% (INR 4.62 Cr) in H1 FY26, compared to 14.8% (INR 11.61 Cr) for the full year FY25, indicating a significant compression in core operational profitability.

Capital Expenditure

Capital expenditure for H1 FY26 was INR 0.13 Cr (INR 13.14 Lakhs) for the purchase of fixed assets, down from INR 0.35 Cr in FY25.

Credit Rating & Borrowing

Total borrowings as of September 30, 2025, stood at INR 32.86 Cr (INR 32.42 Cr short-term and INR 0.44 Cr long-term). Finance costs for H1 FY26 were INR 1.37 Cr, representing an interest-to-revenue ratio of 2.26%.

⚙️ Operational Drivers

Raw Materials

Raw materials include polymers and metal components for pipes and cables. Cost of materials consumed was INR 43.59 Cr (71.8% of revenue) and purchase of stock-in-trade was INR 9.06 Cr (14.9% of revenue).

Capacity Expansion

Current tangible assets are valued at INR 9.83 Cr. No specific capacity expansion timeline or MTPA figures were disclosed.

Raw Material Costs

Total material-related costs (consumed + stock-in-trade) reached 86.7% of revenue in H1 FY26. Procurement strategies involve related-party transactions with entities like Raj Polymers and R.K. Industries.

Manufacturing Efficiency

Depreciation and amortization expenses were INR 0.65 Cr in H1 FY26, down 15.4% YoY, suggesting lower utilization of aging machinery or a shift in asset base.

Logistics & Distribution

Other expenses, including manufacturing and distribution, were INR 4.01 Cr in H1 FY26, a 39.9% decrease from INR 6.67 Cr in H1 FY25.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is pursued through a single-segment focus on pipes and cables, supported by its subsidiary Swastik Infracity Private Limited (INR 6 Cr share capital). The company leverages related-party sales to Raj Polymers (INR 31.85 Lakhs) and R.K. Industries (INR 107.14 Lakhs) to maintain volume.

Products & Services

Pipes and Cables.

Brand Portfolio

Rex.

Strategic Alliances

The company operates with one subsidiary, Swastik Infracity Private Limited, and engages in transactions with related parties like Rex Cold Storage.

🌍 External Factors

Industry Trends

The industry is shifting toward organized players due to stricter compliance with SEBI and Companies Act regulations. Demand is currently driven by government infrastructure projects and urban housing.

Competitive Landscape

Operates in a fragmented market with competition from both large-scale national manufacturers and local unorganized players.

Competitive Moat

The company possesses a narrow moat based on its established manufacturing presence in the RIICO Industrial Area, Sikar. Sustainability is challenged by low net margins (3.23%) and high competition from national brands.

Macro Economic Sensitivity

Highly sensitive to infrastructure spending and interest rates, as high rates deter real estate development, the primary end-market for pipes and cables.

Consumer Behavior

Increasing demand for standardized, certified cables and pipes for safety in residential construction.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Section 133 of the Companies Act 2013 and AS-25 for interim financial reporting. The company is exempt from maintaining cost records as it does not meet the prescribed threshold.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 30.3% (INR 0.85 Cr tax on INR 2.82 Cr PBT).

Legal Contingencies

No instances of fraud were reported by statutory or secretarial auditors for the period ending March 31, 2025. No specific pending litigation values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

High working capital risk; trade receivables of INR 32.40 Cr represent 53.4% of H1 FY26 revenue, indicating potential collection delays.

Geographic Concentration Risk

High concentration in Rajasthan, with the registered office and manufacturing facilities located in Sikar.

Third Party Dependencies

Significant dependency on raw material suppliers, with material costs accounting for nearly 72% of the total cost structure.

Technology Obsolescence Risk

Low risk in basic pipe manufacturing, but higher risk in specialized cabling if manufacturing technology is not upgraded.

Credit & Counterparty Risk

Credit risk is elevated as trade receivables (INR 32.40 Cr) nearly equal the total short-term borrowings (INR 32.42 Cr).