Ganesha Ecosphere (514167) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 was challenging with stable operational revenues but the lowest RPSF and yarn business performance in several quarters due to a spike in raw material prices and demand slowdown, especially in spinning and non-woven segments.

• Gross margin for standalone business dropped to 30% from 36% in Q4FY25, with capacity utilization declining to 95% and Warangal operations to 55%.

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

• Export share increased from 8% to 12% of consolidated revenue quarter-over-quarter, with improving export orders from Europe.

• Promoters infused INR 104 crore via equity warrants, and brownfield expansion at Warangal remains on schedule.

Financial highlights

• Q1FY26 consolidated revenue from operations was ₹337.1 Cr, down from ₹344.4 Cr in Q4FY25 but up from ₹336.5 Cr in Q1FY25.

• Consolidated PAT for Q1FY26 was ₹10.8 Cr, down from ₹23.8 Cr in Q4FY25 and ₹22.5 Cr in Q1FY25.

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

• RPET granules traded at a 35%-40% premium to virgin due to high scrap prices, but the premium has since reduced by about 20%.

• Export revenue increased to 12% of total revenue in the last quarter, up from 9% the previous year; expected to reach 15%-20% this year.

Outlook and guidance

• Revenue and bottom line for FY26 are expected to surpass FY25, with guidance of around INR 1,500 crore.

• Margins are expected to be maintained, especially in the RPET granule business, as demand and offtake improve.

• Capacity expansion of 90,000 tons planned by FY27, taking total granule capacity to 132,000 tons.

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

• Focus on expanding overseas presence and increasing market share in technical and household textiles.