CLSEL - Chaman Lal Setia Exports Ltd. Share Price

In the Q1 FY26 earnings conference call held on August 6, 2025, management provided a cautious outlook for Chaman Lal Setia Exports Limited, emphasizing a strategic slowdown in operations due to declining rice prices and geopolitical uncertainties. Mr. Ankit Setia noted that they are currently decreasing business speed in anticipation of improved market conditions, with plans to reaccelerate operations when prices are more favorable.

Key highlights include:

1. Revenue Target: Management set a target revenue of INR 400 crores to INR 450 crores for Q2 FY26, anticipating better market conditions.

2. Q1 Performance: Revenue for Q1 was affected by an approximate 15% decline in rice prices compared to the previous year. Total volumes stood at 41,255 tons, with exports being 33,797 tons.

3. Future Projections: Management expects to reach a revenue of INR 2,000 crores in the medium term, although timelines remain conditional on market conditions.

4. Margin Guidance: The company is maintaining stable margins, which remain between 9% to 14%. Management expects margins to hold steady despite revenue declines.

5. New Production Units: Two new packing units in Karnal are operational, with production expected to ramp up as market conditions stabilize. The unit in Gandhidham was also reported to be operating at full capacity, contributing positively to future revenue.

6. Inventory Strategy: The company has strategically reduced inventory levels and plans to bulk up as new crops come into the market, reinforcing the approach to maintain profitability during volatile price conditions.

Overall, the management's approach is cautious and adaptable in response to market dynamics, focusing on maintaining margins while preparing to capture growth opportunities in the future.

Q1. Chirag Singhal: "You mentioned about the price decline. Could you quantify what was the decline in Q1 on a sequential basis and on a year-on-year basis? And are you seeing any normalcy in the current quarter?"

Ankit Setia: "Prices have been stable, and rather gone up. We expect a decline in the coming months as the new crop arrives. We believe sales will stabilize as conditions improve."

Q2. Raman: "You mentioned doing CapEx concerning the processing unit. Any update?"

Ankit Setia: "We installed two new packing units in Karnal; the third is still facing minor issues. We've decreased operations due to price fluctuations but will ramp up once they stabilize."

Q3. Ravi Sharma: "Given the US tariffs impacting competitiveness against Pakistan, what's the potential revenue impact in the US?"

Rajeev Setia: "We're shipping cargo that will arrive before the October deadline, so there's no current business impact from tariffs on shipments in transit. Basmati isn't grown in the US, so we maintain a competitive edge."

Q4. Pavan Kumar: "What is the quarter-on-quarter growth in terms of volumes, and were there any inventory losses this quarter?"

Rajeev Setia: "There was no inventory loss; sales occurred at market prices. Our current volume is 41,255 tons this quarter compared to 41,169 tons last year"”growth is flat. We're actively sourcing new customers for future growth."