Summary
Mallcom (India) Limited - Q3 FY26 Earnings Call Summary Thursday, January 22, 2026, 4:00 p.m. IST
Event Participants
Executives 2 Rohit Mall (Associate Vice President), Shyam Sundar Agrawal (CFO)
Analysts 7 Aditya (Securities Investment Management), Deepesh Sancheti (Manya Finance), Dhwanil Desai (Turtle Capital), Krishna Satija (Smart Sync Services), Nishita (Sapphire Capital), Rushabh Shah (Buglerock PMS), Umesh Matkar (Sushil Financial Services)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue (Consolidated) | ₹131 crores | +11.5% YoY; Driven by strong domestic growth (+20%) offsetting soft exports (+8%). |
| EBITDA | ₹19 crores | +27% YoY; Margins expanded 100 bps to 14.7% due to better realizations and product mix. |
| PAT | ₹10 crores | +13% YoY; PAT margin at 7.8% despite higher depreciation and finance costs from new plants. |
| 9M FY26 Revenue | ₹393 crores | +13% YoY; Domestic market outperforming exports over the nine-month period. |
| 9M FY26 EBITDA | ₹47 crores | +3% YoY; Margin at 11.9%, contracted 109 bps YoY due to earlier RM volatility and fixed costs. |
| Export Revenue (Q3) | ₹65 crores | Roughly 50% of total revenue; impacted by European slowdown and pricing pressure. |
| Order Book (Export) | ₹80-85 crores | Represents roughly 3-4 months of visibility for the white-label export business. |
| Finance Cost | - | Increased YoY due to working capital funding and removal of government export subventions. |
Geographic & Segment Commentary
- Domestic Market: Recorded 20% growth in the first 9 months, significantly outperforming exports. Growth is driven by increased market share in branded segments, new product launches in helmets and footwear, and GST rate rationalization aiding affordability in select PPE categories.
- Europe: Remains the largest export market (over 50% of export revenue) but is currently sluggish due to economic slowdown and reduced discretionary industrial spending. Management is hopeful for the India-EU Free Trade Agreement to level the playing field against duty-free competitors like Pakistan and Bangladesh.
- Other Exports: South America remains the second-largest export market with stable growth, while North America remains weak. The company is actively exploring new markets like Russia, Argentina, and the Middle East (UAE, Saudi Arabia) to diversify its white-label and branded presence.
Company-Specific & Strategic Commentary
- Capacity Expansion: The Sanand (Gujarat) and Chandipur (West Bengal) facilities are now fully operational. While currently at 40-50% utilization, they are expected to reach 80-90% by March 2026, acting as primary drivers for volume-led growth.
- Product Diversification: Launched new mid-tier helmets, lightweight sporty safety shoes, and in-house PU gloves in Q3. The company is shifting from trading these items to self-manufacturing to capture better margins and control quality.
- Value-Added Shift: Actively moving from commoditized products to technical textiles and high-spec footwear. Value-added products now represent approximately 60% of the mix, with the target to further increase this via technical textile integration and specialty synthetic gloves.
- Vertical Integration: Ordered additional dipping lines for synthetic gloves (target of 6-7 lines total) with a revenue potential of ₹100 crores from the Sanand facility alone once Phase 1 is fully equipped.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Double-digit (FY26) | Expecting strong Q4 performance to pull full-year growth into double digits despite export headwinds. |
| EBITDA Margin | 13% - 15% | Management views 14-15% as a sustainable range once new facilities scale and RM remains stable. |
| PAT Margin | 8% - 9% | Target range for stabilization once the current heavy depreciation/interest phase from capex subsides. |
| Capacity Utilization | 80% - 90% by Mar '26 | Targeted ramp-up for the new Sanand and West Bengal units from current ~50% levels. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical/Macro | Slowdown in Europe and North America directly impacts 60%+ of the export basket, leading to pricing pressure from international competitors. |
| Competition | Unorganized domestic players and duty-free imports from Bangladesh/Pakistan pose challenges in price-sensitive segments. |
| Operating Leverage | Recent heavy capex has increased fixed costs (depreciation/interest); failure to ramp up utilization quickly could squeeze net margins. |
Q&A Highlights
Domestic Growth & GST
- Question: Was the Q3 growth a result of GST-related restocking? (Aditya)
- Answer: While GST rationalization helped, it wasn’t the sole driver. Dealers operate on a “stock and sell” model and don’t have the capacity for massive hoarding; current growth reflects genuine market share gains (Rohit Mall).
Export Competitiveness
- Question: How does Mallcom compete with billion-dollar players like Ansell? (Rushabh Shah)
- Answer: Mallcom focuses on being a flexible white-label manufacturer, offering customization and consolidation of different items in one container, which larger branded players often refuse to do (Rohit Mall).
New Facility Profitability
- Question: Are the new plants breaking even? (Aditya)
- Answer: The West Bengal shoe facility is already profitable. The Sanand plant is currently near breakeven and is expected to turn profitable very soon as utilization increases (Shyam Sundar Agrawal).
Working Capital & Finance Costs
- Question: Why have finance costs increased so significantly? (Krishna Satija)
- Answer: Primarily due to funding the major capex cycle internally and using debt for working capital at ~6.5%. The removal of government subventions also temporarily increased the interest burden (Shyam Sundar Agrawal).
Key Takeaway
Mallcom (India) Limited delivered a resilient Q3 FY26, characterized by an 11.5% YoY revenue growth and a significant 27% increase in EBITDA as margins returned to the 14.7% range. While the export segment remains challenged by a slowdown in Europe and high competition from duty-free nations, the domestic business grew by 20%, supported by a shift toward branded sales and value-added products. The company has completed its major capex cycle with new facilities in Sanand and West Bengal now operational, though currently underutilized at ~50%. Management is focused on scaling these units to 80-90% utilization by year-end and expanding the product portfolio into helmets and technical gloves. Looking ahead, Mallcom targets double-digit growth for FY26 and aims for a long-term PAT margin of 8-9%, contingent on a recovery in international markets and the successful ramp-up of new manufacturing capacities.
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