SAHYADRI - SAHYADRI INDUSTRIES LTD. Share Price

Sahyadri Industries Limited's management provided an outlook indicating cautious optimism for FY'26, highlighting several key points from the Q1 earnings call on August 13, 2025. The total income for Q1 FY'26 was stable at Rs. 216.1 crore, reflecting a minor decline of 0.8% year-over-year but an impressive 41.6% increase quarter-on-quarter. Despite challenges such as the early onset of the monsoon and subdued roofing demand, the company reported resilience in its performance across both roofing and non-roofing products.

Key financial metrics included an EBITDA of Rs. 21.7 crore, down 12.7% year-over-year, yet up 56.7% from the previous quarter, resulting in an EBITDA margin of 10.1%. Profit after tax for the quarter was Rs. 10.8 crore, reflecting a 13.8% decline year-over-year but up notably by 152.2% from the previous quarter. The PAT margin stood at 5%, compared to 5.7% one year ago.

Looking forward, management anticipates an 8% to 10% increase in topline growth for FY'26, supported by positive changes in the business environment such as improved monsoon conditions, stabilization of global supply chains, and increased demand from rural housing and infrastructure projects. There are expectations for a recovery in operating margins due to cost optimization.

Additionally, management addressed the company's capacity expansion plans, noting a delay in land acquisition in Palghar, with new facilities expected to become operational by Q4 of FY'27 with a total investment of approximately Rs. 100 crore. Once fully operational, an additional Rs. 125 crore is projected to boost the topline.

Finally, in terms of diversification, Sahyadri Industries plans to enhance its non-asbestos product offerings, targeting significant growth in this segment over the next three to four years.

Q&A Session Summary from Sahyadri Industries Limited Q1 FY'26 Earnings Call

1. Question from Kaustav Bubna: "Could you update us on your capacity expansion plans and when will the new facilities come up and what is the expected fixed asset turnover from those facilities?"

   Answer: "We are currently facing delays in land acquisition for our Palghar facility, with a revised timeline set for Q4 of FY'27. Our total investment for this project will be around Rs. 100 crore, of which Rs. 50 crore has already been spent. Once operational, we anticipate an addition of roughly Rs. 125 crore to our topline."

2. Question from Kaustav Bubna: "What is the real hurdle that has come up with the acquisition of land?"

   Answer: "The challenges stem from one or two parcels of land that are currently being resolved. We are in the process of sorting out these issues."

3. Question from Kaustav Bubna: "Could you speak a little bit about your 3-year vision on non-asbestos products and how you plan to grow them?"

   Answer: "Our focus is on future products such as fireproof and waterproof materials, which we believe will take a significant lead in the market. Our 3-year vision suggests that the industry's current non-asbestos segment may double in size over the next 3 to 4 years."

4. Question from Kaustav Bubna: "Given the difficulties regarding raw materials and rupee strength, what guidance could you give for FY26?"

   Answer: "The current geopolitical situation makes it difficult to predict dollar-rupee movement, which poses a challenge. However, we see raw material prices stabilizing, with a projected topline increase of roughly 8% to 10% for FY'26. I believe margins will improve compared to prior forecasts for the year."