Ganesha Ecosphere (514167) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 was challenging with flat consolidated revenue, but legacy operations and profitability declined sharply due to high raw material costs and weak demand in spinning and non-woven segments.

• Overcapacity and suppressed demand, especially in yarn spinning and non-woven textiles, limited the ability to pass on cost increases.

• RPET granule business saw a 25% drop in production and sales volume due to early monsoon and high PET bottle scrap prices.

• Export share increased to 12% of consolidated revenue, aided by currency depreciation and strategic focus on overseas markets.

• Despite Q1 setbacks, demand and margins have started improving in Q2, with normalized raw material prices and increased export orders.

Financial highlights

• Q1 FY26 consolidated revenue was ₹337.1 Cr, nearly flat year-over-year and sequentially, but PAT dropped to ₹10.8 Cr from ₹22.5 Cr in Q1 FY25.

• EBITDA margin declined to 10.8% in Q1 FY26 from 14.2% in Q1 FY25, with standalone EBITDA margin dropping to 4.2%.

• Raw material costs rose to 70% of revenue in Q1 FY26, up from 64% in the previous quarter.

• Export revenue increased to 12% of total revenue in the last quarter, up from 9% year-over-year.

• Standalone revenue for Q1 FY26 was ₹221.5 Cr, down from ₹244.1 Cr in Q1 FY25.

Outlook and guidance

• Management expects demand and margins to recover in subsequent quarters, with improved order visibility until December.

• FY26 revenue is guided at INR 1,500 crore, with margins expected to surpass FY25 levels.

• Targeting value-added products to contribute ~65% of revenue, up from 40% currently.

• Plans to increase rPET granules capacity by 90,000 MTPA to meet growing demand.

• Long-term business outlook remains positive, with confidence in exceeding FY25 financials.