Summary
Stylam Industries Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026 4:00 PM
Event Participants
Executives 3 Jagdish Gupta (MD), Manit Gupta (Whole-Time Director), Kishan Nagpal (CFO)
Analysts 11 Aditya Pal, Ajay Sharma, Anshika Patnaik, Chirag Shah, Deepak Ajmera, Dhruv Bajaj, Hrishit Jhaveri, Keshav Bijayratan Lahoti, Parth Bhavsar, Rishab Bothra, Viraj Parekh, Yogansh Jaswani
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹271 crores | +6.45% QoQ, +8.18% YoY; reflects sustained market expansion and ability to meet evolving customer needs. |
| Export Turnover | ₹198 crores | +6.75% YoY; exports remain the primary revenue driver, contributing ~73% of quarterly revenue. |
| Domestic Turnover | ₹72.89 crores | +5.68% YoY; management is initiating targeted moves to strengthen domestic presence following internal leadership changes. |
| EBITDA Margin | 20.51% | +244 bps YoY; driven by efficient sourcing and inventory management despite raw material cost pressures. |
| PAT Margin | 16.97% | +502 bps YoY; significant improvement primarily due to reduction in forward contract losses from ₹10.31cr to ₹2.33cr. |
| Net Debt | Zero | Company remains net debt-free with strong internal accruals to fund expansion. |
| Laminate Volume (Q3) | 32.67 lakh sheets | Split: 12.31 lakh domestic, 20.36 lakh export. 9M volume growth remained subdued (~2%) due to geopolitical issues. |
| Solid Surface Sales | ₹4.28 crores | 5,574 sheets sold in Q3; segment recovering after refocusing following promoter split. |
Geographic & Segment Commentary
- Exports: Remains the core segment contributing ~73% of Q3 revenue. While 9M value growth was 14%, volume growth was flat due to geopolitical tensions in the Middle East and tariff uncertainties in the US. Management noted that US clients are now accepting higher costs despite 50% tariffs.
- Domestic Market: Historically underserved due to internal family rifts; now under the direct management of Manit Gupta. Strategic focus is shifting from commodity products to value-added laminates to improve realizations. A price hike is scheduled for April 1, 2026.
- Acrylic Solid Surfaces: Previously neglected due to management distractions, this segment is being revitalized under the HPL sales umbrella. Strategic partner Aica Kogyo potentially offers an outsourcing/export channel for this product into the Japanese market.
Company-Specific & Strategic Commentary
- Aica Kogyo Partnership: Aica is acquiring a 27% stake from an exiting promoter group and launching an open offer for 26%. This is framed as a strategic partnership for technology and global best practices, with the Jagdish Gupta family remaining as active operators.
- Capacity Expansion: The new manufacturing facility (₹320 crore investment) is on track for commissioning by March 2026. The project faced minor delays due to environmental clearance (EC) requirements but all equipment is currently under trial.
- Product Diversification: Management hinted at new expansion plans beyond laminates to be announced in 2-3 quarters. The focuses is on leveraging Aica’s technical prowess for high-end products not currently manufactured in India.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | ₹1500 - ₹1600+ crores for FY27 | Driven by new capacity ramp-up and aggressive domestic market capture. |
| New Capacity Revenue | ₹700 - ₹1000 crores peak | Management expects ₹300-400 crore contribution in the first year (FY27). |
| Capacity Utilization | 75% - 80% within 2 years | Confidence stems from existing customer base and entry into two new “unique” press sizes. |
| Margin Outlook | Positive / Improving | Expected improvement as the domestic mix shifts toward value-added products and new plant costs are absorbed. |
Risks & Constraints
| Risk | Context |
|---|---|
| US Tariffs | US import duties on laminates rose to 50%; while clients currently bear the cost, prolonged high tariffs could impact volume growth. |
| Geopolitical Tensions | Ongoing conflicts in the Middle East and Europe have suppressed volume growth to ~2% despite strong value growth. |
| Execution Risk | Transitioning the domestic business from a “commodity” focus to a “brand” focus requires significant sales force expansion (100+ new hires). |
Q&A Highlights
Aica Kogyo Deal Structure
- Question: What is the option for Aica to increase stake to a majority? (Keshav Bijayratan Lahoti)
- Answer: Aica is buying 27% from the exiting family and an open offer for 26% is mandatory. If the open offer is undersubscribed, the Jagdish Gupta family might sell a small portion to ensure Aica reaches 40%, but they intend to remain active promoters (Manit Gupta).
New Plant Utilization
- Question: Will the new plant be exclusively for one US customer? (Viraj Parekh)
- Answer: No, that was incorrect information. The plant features multiple sizes, including a 7-foot size only two other companies globally possess. It will serve 70% export and 30% domestic markets (Manit Gupta).
US Market Dynamics
- Question: How are we handling the 50% US tariff? (Chirag Shah)
- Answer: Clients are reordering and absorbing the duty into their costs as the entire US market is seeing price increases. We are not sharing the 50% duty burden (Manit Gupta).
Domestic Strategy
- Question: Who will handle the domestic business now that Manav Gupta has exited? (Keshav Bijayratan Lahoti)
- Answer: Manit Gupta and Jagdish Gupta have taken over. They are currently rationalizing unwanted manpower and expenses, which should take 1-2 quarters to reflect in margins (Jagdish Gupta).
Key Takeaway
Stylam Industries reported a steady Q3 FY26 with revenue of ₹271 crores and an improved EBITDA margin of 20.51%, aided by the resolution of a long-standing family rift and a strategic partnership with Japan’s Aica Kogyo. The company is transitioning into a high-growth phase, with a ₹320 crore capacity expansion set for commissioning in March 2026, targeting a peak revenue potential of ₹1,000 crores. Management has shifted focus toward the domestic market, aiming to move away from commodity-grade products to higher-margin value-added sheets, while maintaining its status as a net debt-free entity. Despite a 50% tariff in the US and geopolitical drags on export volumes, Stylam guided for a significant revenue jump to ₹1,500-1,600+ crores for FY27. Investors should monitor the successful integration of the Aica partnership and the ramp-up of the new facility to meet these aggressive targets.
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