Summary
Madhusudan Masala Limited - Q3 FY26 Earnings Call Summary Tuesday, January 20, 2026 3:00 PM IST
Event Participants
Executives 4 Hiren Kotecha (Whole Time Director), Kirit Dharaviya (CFO), Rishit Kotecha (Chairman & Managing Director), Sarvesh Gohil (Statutory Auditor)
Analysts 6 Amit Agicha, Amit Mehendale, Rehan Sayyed, Resha Mehta, Sanchita Sood, Sheikh Mujib Ahmed
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹76.32 crores | +20.3% YoY; Driven by high volumes, improved utilization, and strong branded product traction. |
| EBITDA | ₹8.25 crores | +79.6% YoY; Significant growth due to operating leverage and improved product mix. |
| EBITDA Margin | 10.8% | +357 bps YoY; Expansion supported by shift toward higher-margin branded products. |
| Net Profit (PAT) | ₹4.70 crores | +104% YoY; Nearly doubled due to improved profitability across the value chain. |
| 9M FY26 Revenue | ₹194.54 crores | +19.3% YoY; Consistent growth momentum across the three quarters. |
| 9M FY26 PAT | ₹12.36 crores | +40% YoY; Strong earning momentum maintained through the fiscal year. |
| Branded Sales Mix | 70% | +800 bps YoY from 62%; Strategy to reach 100% branded by 2028. |
| Sales Volume (9M) | 16,983 MT | Includes 1,187 MT from branded products and 106 million packets sold. |
| Capacity Utilization | 98% - 100% | Jamnagar at 98% and Rajkot at 100%; necessitates upcoming greenfield expansion. |
Geographic & Segment Commentary
- Branded Products: Currently contributes 70% of total revenue, up from 62% in the previous year. Management is aggressively shifting away from non-branded (30%) to reach a 100% branded mix by 2028 to capture higher margins.
- Northern India Expansion: Focus is on deep penetration in Punjab and Uttar Pradesh. The company has hired specialized teams from large competitors (Everest, Goldie Masala) to drive distribution in these regions starting Q4.
- Distribution Network: Expanded to 7+ states with 358+ distributors and 42,500+ retail outlets. Management targets adding 10,000+ retailers and 100+ distributors annually.
Company-Specific & Strategic Commentary
- Capacity Expansion: Completed a 1,200 MT brownfield expansion at Jamnagar in Q3. A new Greenfield project on the Jamnagar-Rajkot highway will add 6,000 MT in Phase 1 (operational by Oct 2026), with Phase 2 planned for 12,000-18,000 MT.
- Inorganic Growth: Following the 100% acquisition of Vitagreen, the company has integrated over 70% of Vitagreen’s distributors. Management remains open to “bolt-on” acquisitions but excludes them from the 30% organic CAGR guidance.
- Branding & Marketing: Current marketing spend is 1% to 1.5% of sales, focused on traditional media (hoardings, FM). A dedicated digital/e-commerce marketing budget is being established for Q4 following strong traction on quick-commerce platforms.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (FY26) | ₹300+ crores | Management confident in exceeding ₹300Cr due to strong Q4 seasonal demand and UP expansion. |
| Revenue CAGR | 30% through 2030 | To be achieved via horizontal geographic expansion and 10-12% organic growth in existing markets. |
| Peak Revenue | ₹600 crores | Capacity-led ceiling following the commissioning of the 6,000 MT Greenfield Phase 1. |
| EBITDA Margin | 10.8% - 11.0% | Targeted sustainable range for the full financial year FY26. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Spices like Chilli, Turmeric, and Coriander have seen price hikes of ₹25–₹100/kg recently. Management mitigates this by maintaining 50-60% of inventory procured during the season and passing on costs with a 15-day lag. |
| Capacity Constraints | Both current units are at ~100% utilization. Any delay in the October 2026 Greenfield commissioning could cap growth, though management uses outsourcing for intermediate processing (RM to SFG) to bridge the gap. |
| Competitive Intensity | Competition from both organized Pan-India brands and local unorganized players. Pricing power is limited as the company must match price updates from regional competitors like Hathi Masala to maintain market share. |
Q&A Highlights
Inventory & Pricing Strategy
- Question: How do you manage EBITDA margins during commodity deflation/inflation? (Resha Mehta)
- Answer: The company procures 50-60% of inventory during the season. If prices rise, they utilize stock; if they fall, they procure from the market to process. Recent price hikes (Chilli up ₹65/kg) were passed on through list price updates (Rishit Kotecha & Hiren Kotecha).
Capacity & Revenue Potential
- Question: What is the peak revenue on current and new facilities? (Sanchita Sood & Amit Mehendale)
- Answer: Current facilities can support up to ₹300-500 crores (using outsourcing for intermediate steps). After the Greenfield Phase 1, peak revenue can exceed ₹600 crores with 100% in-house production (Rishit Kotecha).
Geographic Expansion
- Question: How will you achieve the gap to meet the 30% growth target? (Sheikh Mujib Ahmed)
- Answer: Q4 is seasonally the strongest. A new team from Goldie Masala is being onboarded in February to cover 100% of UP, and distributors are currently over-ordering due to rising price trends (Rishit Kotecha).
Capital Allocation
- Question: Will you need to dilute equity for Phase 2 CapEx? (Amit Mehendale)
- Answer: No immediate plan for equity fundraising. Funding will likely come from internal accruals, 50% debt, and the pending conversion of promoter warrants priced at ₹181 (Rishit Kotecha).
Key Takeaway
Madhusudan Masala delivered a robust Q3 FY26 with revenue growing 20.3% to ₹76.32 crores and PAT doubling to ₹4.7 crores, driven by a strategic shift toward branded products which now comprise 70% of the mix. The company successfully navigated significant raw material inflation in chilli and turmeric by leveraging its seasonal procurement strategy and implementing timely price hikes. With existing units at 100% capacity utilization, the focus shifts to the ₹18-crore Greenfield expansion (6,000 MT) slated for October 2026, which is expected to unlock a peak revenue potential of ₹600 crores. Management maintained a confident 30% CAGR guidance through 2030, supported by aggressive distribution expansion in Punjab and Uttar Pradesh and a transition toward a 100% branded revenue model by 2028. Investors should monitor the timely commissioning of the Jamnagar-Rajkot facility and the successful scaling of the new Northern India sales teams.
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