Summary
Silkflex Polymers (India) Limited - Q3 FY26 Earnings Call Summary Thursday, February 05, 2026 4:00 PM
Event Participants
Executives 2 Mr. Tushar Sanghavi (Chairman and Managing Director), Mrs. Urmi Mehta (Whole-Time Director and CFO)
Analysts 5 Aakash Shah (Pearl Investments), Nidhi (Dhimahi Enterprise), Prateek Chaudhary (Saamarthya Capital), Rohan Shukla (Deepvalue Partners), Ryan (Indra Consulting)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹33.54 crores | +5.38% YoY, +78.54% QoQ; Growth driven by manufacturing commencement and strong Q3 demand. |
| EBITDA | ₹7.11 crores | +130.78% YoY; Driven by better operating leverage, cost control, and shift to in-house production. |
| EBITDA Margin | 21.20% | +1,150 bps YoY; Sharp expansion due to 25% margins in manufacturing vs trading. |
| Profit After Tax (PAT) | ₹4.06 crores | +117.40% YoY; PAT margin improved by 620 bps to 12.1%. |
| 9M FY26 Revenue | ₹71.14 crores | +6.20% YoY; Reflects steady distribution business and recent manufacturing tailwinds. |
| Manufacturing Capacity | 500 MT/month | Commenced in Nov/Dec 2025 at Vadodara; currently producing Silkbond 35 and Silkflex Glue. |
| Capacity Utilization | 60% | Utilization reached 60% within the first two months of operations; target 100% by FY27. |
| Net Worth | ₹42.00 crores | As of December 31, 2025; strengthened by IPO proceeds and internal accruals. |
| Debt | ₹50.00 crores | Comprises ₹30 crores term loan (7-year tenure) and ₹20 crores working capital. |
Geographic & Segment Commentary
- Textile Inks & Binders: Remains the core segment contributing 75% of revenue currently via trading and 25% via new manufacturing. The company is a recommended supplier for Puma and H&M, benefiting from the “China Plus One” strategy and Bangladesh’s political instability.
- Wood Coating: Rapidly expanding segment following the opening of a new branch in Kochi to serve the furniture and interior markets. Management expects 20-30% growth in this segment due to the rising adoption of sustainable water-based polymers.
- Geographic Reach: Operations expanded through offices in Kolkata, Tirupur, Ludhiana, Ahmedabad, Jodhpur, Mumbai, and now Kochi. The Vadodara plant is strategically located near major Gujarat textile hubs to reduce logistics costs and lead times.
Company-Specific & Strategic Commentary
- Backward Integration: Transitioned from a pure distributor/trader for Silkflex Malaysia to a manufacturer. Manufacturing currently contributes 25% of revenue but targets a 50:50 mix with trading within 1-2 years.
- Sustainability Focus: The new Vadodara facility is boiler-less, solvent-free, and zero-discharge with a zero-carbon footprint. Products carry ZDHC Level 3, OEKO-TEX, and GOTS Version 7 certifications.
- Technology Transfer: Currently manufacturing 2 products out of a potential basket of 108 textile and 70 wood coating products. Ongoing negotiations with Malaysian partners for additional technology transfers are expected to drive future expansion.
- Market Positioning: Leverages India-EU and India-US trade deals which eliminate duties on textiles and furniture, narrowing the competitive gap with Bangladesh and Pakistan.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 Revenue | ₹110 crores | Management maintained previous guidance based on strong Jan-Feb performance. |
| Manufacturing Revenue | ₹70 - ₹80 crores | Target revenue potential at 100% capacity utilization of the current 500 MT plant. |
| Segment Growth | 15-20% (Inks), 20-30% (Wood) | Driven by market expansion and shift toward eco-friendly water-based solutions. |
| Operational Mix | 50% Manufacturing / 50% Trading | Shift expected within the next 12-24 months as more products are localized. |
| Long-term Vision | Fully Integrated by 2030 | Goal to transition almost entirely to manufacturing to lead the sustainable coating market. |
Risks & Constraints
| Risk | Context |
|---|---|
| Product Concentration | Currently manufacturing only 2 products (Silkbond 35 & Glue); reliance on Malaysia for technology transfer of high-value inks remains high. |
| Leverage | Total debt of ₹50 crores against a net worth of ₹42 crores; however, management notes no major upcoming capex and a moratorium on term loans until June 2026. |
| Operational Transition | As a first-time manufacturer, the company faces a learning curve in stabilizing production and ensuring domestic quality matches Malaysian imports. |
Q&A Highlights
Manufacturing Strategy
- Question: How does the new facility impact the business model compared to trading? (Ryan)
- Answer: Transitioning from 100% imports to local manufacturing reduces pricing hurdles and import reliance by 10-12% initially. Local production offers a 20-25% EBITDA margin compared to lower trading margins (Tushar Sanghavi).
Capacity & Expansion
- Question: Can the plant manufacture different formulations without more capex? (Ryan)
- Answer: Yes, utilities and monomer storage were installed for future expansion. The same facility can handle inks and wood coating polymers without significant incremental capex (Tushar Sanghavi).
Margins & Financials
- Question: Why did “Other Expenses” drop significantly from ₹1.42 crores to ₹54 lakhs despite manufacturing starting? (Prateek Chaudhary)
- Answer: Management acknowledged the discrepancy and requested to provide a detailed explanation via email after consulting the finance team (Tushar Sanghavi).
Global Trade Dynamics
- Question: How do India-EU/US trade deals support Silkflex? (Aakash Shah)
- Answer: These deals open 30-35% of the US trade market and strengthen India’s position against Bangladesh in the EU, driving demand for premium sustainable inks (Tushar Sanghavi).
Key Takeaway
Silkflex Polymers delivered a transformative Q3 FY26, marked by the successful commissioning of its Vadodara manufacturing facility, which saw 60% utilization in its first 45 days. Financial performance was robust, with revenue growing 5.38% YoY to ₹33.54 crores and EBITDA margins expanding by 1,150 bps to 21.20% due to the higher-margin manufacturing mix. The company is strategically pivoting from a distributor to a manufacturer, aiming for a 50:50 revenue split between trading and production within two years. Backed by global vendor status for H&M and Puma, Silkflex is well-positioned to capitalize on the “China Plus One” trend and new FTA tailwinds. Management maintained a full-year revenue guidance of ₹110 crores for FY26, with plans to become a fully integrated sustainable manufacturing leader by 2030, provided technology transfers from Malaysian partners continue as planned.
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