Summary
Mitsu Chem Plast Limited - Q3 FY26 Earnings Call Summary Monday, February 02, 2026 4:00 PM
Event Participants
Executives 2 Kashmira Dedhia (VP - Finance and Accounts), Manish Dedhia (Managing Director & CFO)
Analysts 6 Aditya Singla, Aradhya Nayak, Avesh Chauhan, Maitri Shah, Moksh Ranka, Sakshi Shinde, Surbhi Vohra, Vignesh Iyer
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹86.09 crores | +6.92% YoY; Driven by better sales realization and improved product mix. |
| EBITDA | ₹9.54 crores | +73.35% YoY; Significant expansion due to operational efficiencies and cost optimization. |
| EBITDA Margin | 11.10% | +426 bps YoY; Driven by a higher share of niche products and better purchasing. |
| Net Profit (PAT) | ₹4.71 crores | +217.03% YoY; Strong bottom-line growth following margin expansion. |
| PAT Margin | 5.47% | +363 bps YoY; Reflects improved profitability and disciplined execution. |
| Total 9M Income | ₹264.05 crores | +8.94% YoY; Steady growth trajectory for the three quarters of FY26. |
| Installed Capacity | 29,000+ MTPA | Added 650 MTPA during the quarter; further expansion planned via Unit 4. |
| Utilization | 65% | Utilization during Q3; industry standard peak is noted at 85-90%. |
| Debt | ₹63 - ₹64 crores | Current debt level used for operations and expansion. |
Geographic & Segment Commentary
- Exports: Currently exporting to 17+ countries including Europe, Canada, and the Gulf. While currently only 2.5% of revenue, management expects a “huge jump” after successfully passing milestone orders for global OEMs.
- Niche Products (Furnastra): This segment contributes 16% of revenue, focusing on healthcare furniture and infrastructure. It commands margins 5-7% higher than the commodity segment and is a key pillar for the ₹1,000 crore target.
- Commodity (Industrial Packaging): Represents 84% of revenue, serving chemical, pharma, and FMCG sectors. While lower margin, it provides volume and utilizes the bulk of the 29,000 MTPA capacity.
Company-Specific & Strategic Commentary
- Capacity Expansion: Added 650 MTPA in Q3 and announced a further 900 MTPA for Unit 4 in January 2026. Management indicated total capacity must roughly double to meet the long-term revenue target.
- Sustainability (EPR/PCR): The company is already supplying Post-Consumer Recycled (PCR) plastic across its range. Management stated they are compliant with Extended Producer Responsibility (EPR) and ESG scorecards required by MNC clients (15-16% of base).
- Strategic Transformation: Growth is anchored on four pillars: Furnastra (healthcare), packaging, operational excellence, and data-driven marketing.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Annual Revenue | ₹1,000 crores by FY 2028 | Requires significant capacity doubling and ramp-up in sales through team building and new customer acquisition. |
| EBITDA Margin | 8% - 15% (Long term) | Management views 8-10% as structurally achievable in the current mix, with 15% possible at higher scale. |
| FY 2027 Revenue | Steady Growth | Expected to grow in the historical range (approx. 20%) with a primary focus on profitability over pure volume. |
| Peak Revenue Potential | ₹450 crores | Current capacity (approx. 29k MTPA) can support a maximum top line of ₹450 crores at current prices. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Resin prices fluctuate based on USD and crude; price pass-throughs can take over a month if customers do not agree immediately. |
| Customer Concentration | 80% of business is concentrated among 30-35 customers, creating dependency on a small group of large corporate and MNC clients. |
| Execution Risk | Reaching the ₹1,000 crore target by FY28 requires a massive CAGR (35-40%), which significantly exceeds the historical 18-20% growth rate. |
Q&A Highlights
Margin Sustainability
- Question: What drove the sharp EBITDA jump and is it sustainable? (Aditya Singla)
- Answer: Jump was driven by operational efficiency, better sales realization, and improved purchasing; management expects a long-term range of 8-10% given the commodity/niche mix (Manish Dedhia).
Growth Roadmap to ₹1,000 Crores
- Question: How will you reach ₹1,000 crores by FY28 given current growth rates? (Avesh Chauhan)
- Answer: Current plants are saturated; growth will come from Unit 4 and a planned new plant. Management is building infrastructure and customer relationships to support the ramp-up (Manish Dedhia).
Capacity & Capex
- Question: What is the peak turnover from current capacity and what capex is needed for the target? (Moksh Ranka)
- Answer: Current peak is ₹450 crores. Reaching ₹1,000 crores requires doubling capacity; details on capex and funding will be announced as board approvals are finalized (Manish Dedhia/Kashmira Dedhia).
Working Capital
- Question: What is the current cash conversion cycle? (Rujun Mishra)
- Answer: The cycle is approximately 70 days, with debtor days between 60-65 days (Kashmira Dedhia).
Key Takeaway
Mitsu Chem Plast delivered a robust Q3 FY26, characterized by a significant 73.35% YoY increase in EBITDA and a 426 bps margin expansion to 11.10%. While revenue growth remained steady at 6.92% for the quarter, the shift toward higher-margin niche products (16% of mix) and operational efficiencies drove profitability. Strategically, the company is transitioning toward a high-growth phase with the announcement of Unit 4 and land acquisitions to double capacity from the current 29,000 MTPA. Management maintained its ambitious target of reaching ₹1,000 crores in revenue by FY28, despite current capacity constraints that cap revenue at approximately ₹450 crores. The company remains focused on scaling its export footprint (currently 17 countries) and healthcare furniture segment. Investors should monitor the execution of the capacity ramp-up and the company’s ability to maintain double-digit margins amidst raw material price fluctuations.
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