💰 Financial Performance

Revenue Growth by Segment

The company reported a total revenue of INR 301.86 Cr in FY25, representing a significant growth of 68.3% compared to INR 179.35 Cr in FY24. For H1 FY26, revenue from operations reached INR 166.42 Cr, a 14.17% increase over the INR 145.76 Cr recorded in H1 FY25.

Geographic Revenue Split

A majority of the company's revenue is derived from the State of Uttar Pradesh. While the exact percentage is not disclosed, the management identifies this geographical concentration as a high-exposure risk to regional economic and demographic changes.

Profitability Margins

In FY25, the Profit Before Tax (PBT) margin was 3.77% (INR 11.38 Cr on INR 301.86 Cr revenue). However, for H1 FY26, the company reported a Net Loss of INR 18.11 Cr compared to a profit of INR 3.56 Cr in H1 FY25, primarily due to a massive exceptional item of INR 25.41 Cr related to fire damage.

EBITDA Margin

Core profitability before exceptional items in H1 FY26 remained thin; Profit Before Exceptional Items and Tax was INR 1.10 Cr, representing a margin of 0.66% of total income, down from 3.26% (INR 4.76 Cr) in H1 FY25.

Capital Expenditure

Additions to Property, Plant, and Equipment and Intangible Assets amounted to INR 12.28 Cr in H1 FY26. In FY25, the company reported depreciation of INR 2.89 Cr, reflecting its manufacturing asset base.

Credit Rating & Borrowing

As of September 30, 2025, the company had Long-Term Borrowings of INR 2.89 Cr and Short-Term Borrowings of INR 11.52 Cr. Finance costs for H1 FY26 were INR 0.66 Cr, down 17.5% from INR 0.80 Cr in H1 FY25.

⚙️ Operational Drivers

Raw Materials

The primary raw materials are polymers and plastic granules used for flexible packaging. Cost of Materials Consumed in FY25 was INR 252.44 Cr, representing 83.6% of total revenue.

Key Suppliers

Not disclosed in available documents; however, the company notes dependency on a few numbers of customers for sales, which impacts procurement planning.

Capacity Expansion

The company sold 17,928.72 MT (1.79 Cr KG) of finished goods in FY25. Planned expansion details are not specified, though the company recently transitioned from trading to manufacturing with two set-up units.

Raw Material Costs

Raw material costs accounted for 83.6% of revenue in FY25 (INR 252.44 Cr). In H1 FY26, material costs were INR 152.26 Cr, or 91.5% of revenue, indicating a significant squeeze on margins due to rising input costs or inventory losses.

Manufacturing Efficiency

The cost of production for plastics and polymers was reported at INR 112.01 per KG for a volume of 17,864,244 KG in FY25. The net sales realization was INR 174.02 per KG, providing a margin of INR 5.93 per KG as per cost accounts.

Logistics & Distribution

Distribution costs are integrated into selling overheads, which represented approximately 0.15% of total revenue in FY25.

📈 Strategic Growth

Growth Strategy

The company is focusing on providing end-to-end flexible packaging solutions, transitioning from a trading-heavy model to a manufacturing-led model. Growth is driven by catering to diverse industries and leveraging its ISO-certified manufacturing facilities.

Products & Services

Flexible packaging materials, including multi-functional films and pouches used for industrial and consumer goods packaging.

Brand Portfolio

Sati Poly Plast.

Market Expansion

The company is looking to diversify beyond its primary market in Uttar Pradesh to reduce geographical concentration risks.

🌍 External Factors

Industry Trends

The flexible packaging industry is growing due to multi-functional requirements across sectors. The company is positioning itself by moving from trading to manufacturing to capture higher value-add.

Competitive Landscape

The company faces intense competition in the Uttar Pradesh region, which heightens exposure to adverse price movements.

Competitive Moat

The company's moat is based on its ISO certification and end-to-end solution capability. However, the lack of geographical diversity and high customer concentration makes this moat vulnerable to local competition.

Macro Economic Sensitivity

The business is highly sensitive to economic and demographic changes in Uttar Pradesh, where the majority of revenue is generated.

Consumer Behavior

Shifts toward sustainable or biodegradable packaging could disrupt demand for traditional plastic-based flexible packaging.

Geopolitical Risks

Trade barriers or fluctuations in global polymer prices due to geopolitical tensions in oil-producing regions could adversely affect input costs.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with the Companies (Cost Records and Audit) Rules, 2014. It maintains cost records for 'Plastic & Polymers Products' under Section 148 of the Companies Act, 2013.

Taxation Policy Impact

The effective tax rate for FY25 was approximately 10.2% based on a tax provision of INR 1.16 Cr on PBT of INR 11.38 Cr. For H1 FY26, the company recorded a tax credit of INR 4.67 Cr due to losses.

Legal Contingencies

The company has a pending insurance claim following a fire accident on February 15, 2025. The claim is currently under process, and the destruction of accounting records has delayed some regulatory appointments like internal auditors.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the recovery of the insurance claim for the fire loss of INR 25.41 Cr. Failure to recover this could permanently impair the balance sheet.

Geographic Concentration Risk

Majority of revenue is concentrated in the State of Uttar Pradesh.

Third Party Dependencies

High dependency on a limited number of customers for the majority of sales volume.

Technology Obsolescence Risk

The company follows the WDV method for depreciation, suggesting a need for regular technological upgrades to maintain manufacturing efficiency in the polymer sector.

Credit & Counterparty Risk

Trade receivables stood at INR 46.01 Cr as of September 30, 2025, representing 27.6% of H1 FY26 revenue, indicating significant credit exposure to its limited customer base.