MALLCOMNSEQ2 FY26November 20, 2025

Mallcom (India) Limited

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13analyst exchanges

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Management on call

Rohit Mall

ASSOCIATE VICE PRESIDENT –

Shyam Sundar Agrawal

CHIEF FINANCIAL

Angad

BATLIVALA & KARANI SECURITIES

Key numbers — 40 extracted

INR100 crore

d commercial production and the current setup is now fully operational. We have invested around INR100 crores in this unit, and we plan to scale up capacity in a phased manner. And additional capex of up to

INR10 crore

in this unit, and we plan to scale up capacity in a phased manner. And additional capex of up to INR10 crores has been earmarked for the import of new dipping line and knitting machines to support this expa

INR25 crore

our newly established Industrial Safety Shoes facility at Chandipur, West Bengal with a capex of INR25 crores is also fully operational. This facility further strengthens our integrated manufacturing capabi

INR139 crore

consolidated basis, for the second quarter of financial year 2026, our operating revenue stood at INR139 crores reflecting 8% year-on-year growth. EBITDA for the quarter came in at INR10 crores, a 37% year-on

he second quarter of financial year 2026, our operating revenue stood at INR139 crores reflecting 8% year-on-year growth. EBITDA for the quarter came in at INR10 crores, a 37% year-on-year decline w

37%

NR139 crores reflecting 8% year-on-year growth. EBITDA for the quarter came in at INR10 crores, a 37% year-on-year decline with EBITDA margin at 7.1%, lower by 513 basis points, primarily due to high

7.1%

EBITDA for the quarter came in at INR10 crores, a 37% year-on-year decline with EBITDA margin at 7.1%, lower by 513 basis points, primarily due to higher cost of goods sold. Net profit for the quar

513 basis point

quarter came in at INR10 crores, a 37% year-on-year decline with EBITDA margin at 7.1%, lower by 513 basis points, primarily due to higher cost of goods sold. Net profit for the quarter was INR4 crores translat

INR4 crore

by 513 basis points, primarily due to higher cost of goods sold. Net profit for the quarter was INR4 crores translating to a PAT margin of 2.66%. For the first half of FY '26, our operating revenue stood

2.66%

her cost of goods sold. Net profit for the quarter was INR4 crores translating to a PAT margin of 2.66%. For the first half of FY '26, our operating revenue stood at INR262 crores leaving a 13% year-on

INR262 crore

ranslating to a PAT margin of 2.66%. For the first half of FY '26, our operating revenue stood at INR262 crores leaving a 13% year-on-year increase. EBITDA for the period was INR28 crores, representing a 9% y

13%

in of 2.66%. For the first half of FY '26, our operating revenue stood at INR262 crores leaving a 13% year-on-year increase. EBITDA for the period was INR28 crores, representing a 9% year-on-year dec

Guidance — 19 items

Rohit Mall

opening

“We have invested around INR100 crores in this unit, and we plan to scale up capacity in a phased manner.”

Rohit Mall

“There will be a big difference because if you talk about 3M and Honeywell most of these brands don't manufacture themselves.”

Rushabh Shah

“And which categories will be your key focus areas so that as you say, domestic market will be the key driver for you for growth in the coming years.”

Viraj

“Or do you expect those margins -- low margins to continue for a couple of quarters?”

Shyam Sundar Agrawal

“So these are all, I would say, in the nature of temporary costs and what we see that going forward with all these units now operational, and we will be adding capacity to these units also in due course.”

Viraj

“Or do you think this will sustain the impact will be there for the rest of the year?”

Viraj

“Shyam Sundar Agrawal: Yes, that is the target.”

Viraj

“We have already taken the action and that is the target, yes.”

Rehan Saiyyed

“So can you share expected timing for approval and commercial launch and project contribution to the bio business revenue in ongoing FY '27, '28?”

Rohit Mall

“So firstly, I don't think I'll be able to quantify how much of it will be towards...”

Risks & concerns — 11 flagged

EBITDA for the quarter came in at INR10 crores, a 37% year-on-year decline with EBITDA margin at 7.1%, lower by 513 basis points, primarily due to higher cost of goods sold.

— Rohit Mall

EBITDA for the period was INR28 crores, representing a 9% year-on-year decline with EBITDA margin contracting by 250 basis points to 10.50% paid for the first half stood at INR14 crores, resulting in a PAT margin of 5.19%.

— Rohit Mall

So sir, in the previous call, you had mentioned that you are focusing more on the emerging markets because there, the opportunity size is huge and is very difficult for you to compete with the established brands in the European markets.

— Rushabh Shah

So yes, we see with respect to the European markets, it's definitely something which is growing at a very slow rate or currently not even growing, maybe on a decline also.

— Rohit Mall

So I would say that this decline which you see is in the region of one-off mostly.

— Viraj

So if you can talk about the demand outlook, both domestic and export and was there any impact of GST transition in domestic market?

— Viraj

We've seen some demand slowdown and customers being overstocked with products, largely due to the situation of their economy there.

— Rohit Mall

And also, sir, last quarter, when we did this call, there was no indication given whatsoever that the margins are under pressure in quarter 2.

— Manish

So you will see that during the first quarter also, there was a slight decline in the margin.

— Manish

And second thing is you will see that the sharper decline in rupee value.

— Manish

So we have an overall impact of 2.5% for the half year.

— Manish

Q&A — 13 exchanges

[Inaudible 0:06:08] established brands in the European markets. So my question was how has that changed?

Rohit Mall

I think you need to repeat your question here. Shyam Sundar Agrawal: Yes, we need to pull because the first half of the question, we couldn't hear. Can you start from the beginning? Sorry. Yes. So sir, in the previous call, you had mentioned that you are focusing more on the emerging markets because there, the opportunity size is huge and is very difficult for you to compete with the established brands in the European markets. So my question was how has that changed? Is more and more exports increasing for us in the emerging markets? And have we added any distributors to increase our exports i

Just a couple of questions. First, what was the reason for the sharp drop in gross and EBITDA margin? So if you look at our own history, we have reported one of the lowest ever recorded by the company. So is it more of a one-off? And if you can explain the reasons? Or do you expect those margins -- low margins to continue for a couple of quarters? Shyam Sundar Agrawal: No, no. So I would say that this decline which you see is in the region of one-off mostly. And looking at the overall profit, EBITDA margins as well as profit before tax, you will see that there are certain expenditures, which a

Viraj

So if I look at the gross, right, there's almost 400 basis points hit on the gross, if I compare year- on-year, we are around 35% as against 39%. So this 400%, how much of this is because of higher import or FX hit? And similarly, at the opex level, what are the costs you would think, which have hit the P&L in this quarter? So as I mentioned, the higher cost has been because of -- mostly because of import and the higher exchange rate. And other expenses, you will see that we are now because of this capex, I can like now almost completing we are hiring more of the employees to manage. Even in m

Just wanted like the -- most of the questions have answered. Just wanted to confirm on the [inaudible 0:25:47] for '27-'28?

Shyam Sundar Agrawal

Sorry. Can you -- your voice is getting muffled in between? Can you repeat your question? Yes, sure, sure. I'm saying this -- I wanted to understand regarding the opportunity of bionematicide. There is kind of a net [inaudible 0:26:27]. So could you just repeat again like that you have done new registration for bionematicide filed in U.S. in quarter 2. So can you share expected timing for approval and commercial launch and project contribution to the bio business revenue in ongoing FY '27, '28? Shyam Sundar Agrawal: The question you asked is if -- what is the approval cycle for our products wi

So my question is you in the previous call have mentioned that one of the factors for choosing Mallcom would be the after-sale services. I just wanted to know what kind of after-sale services do you provide to a customer? And how much of that contributes towards our revenue?

Rohit Mall

Okay. So firstly, I don't think I'll be able to quantify how much of it will be towards... Shyam Sundar Agrawal: Hardly anything, Rohit. We are not in the business of providing after-sale service as such, maybe some warranty or whatever we are giving. So there, if anything is needed. Otherwise, it is a simple sale. And in most of the cases, no further services required. No, no. Shyam-ji, just to add here that in terms of services, like these are not any capital goods that they require any such services. What we do is -- we definitely have a product guarantee and a warranty. So if anything happ

I just have one query. See, we have added 2 lines of the Sanand unit. So we do expect full utilization of these 2 lines? And how many more lines can be -- we will be adding? And what are the time lines for that?

Rohit Mall

So we are expecting that within the next 6 months, we should be able to run this at capacity. And we can go anywhere between 6 to 8 lines in this setup that we have done, but also we have some more land available, which we haven't fully converted into a shed, it can also be done if there need be. And the idea is that within the next financial year, we at least add a couple of more lines and then a year later add full capacity.

So in the previous call, you have mentioned that we have maintained our EBITDA margin for the rest of the year, the margins have suddenly reduced this quarter? Shyam Sundar Agrawal: Yes, I've explained already why this is only temporary in nature, and this hedge happened because of a higher increase, higher increase in raw material import and also affected by currency, dollar and euro both going up by almost 5% to 10% during this period. So -- and higher freight also. So these are all on the short-term basis only, and we are aware of this. So we need to renegotiate with our vendors as well as

Management

Yes, am I allowed to ask? Can I ask now?

Management

Yes. Okay. Sir, my first question is regarding, again, this margin, the contraction that we have seen in this quarter. So sir, generally, if you see in last, let's say, 5, 7 years, our exports are roughly 60% of our total sales whereas our imports are roughly 15% to 25%, so the range between various years. But if currency depreciation would have happened like you mentioned it happened. So it -- so best of understanding if our exports are higher and imports are lower, it should have positively impacted your P&L instead of a negative impact. So I -- so if you can explain slightly better as to wh

Manish

Okay. So Shyam Ji, in that case, 2 very basic questions. So now in H1, we have done a margin of 10.5%. And so now for the full year, what do you think is possible, sir in terms of margins? Shyam Sundar Agrawal: This is what I mentioned. We are trying to recover this. So on the both sides, so we are talking with the vendor as well as with the customers also to see that. From both angles, we are able to have the better pricing. And as I mentioned, there should be some improvement during the third quarter. And by the fourth quarter, we should go back to the original profitability EBITDA levels. S

Sir, a couple of questions on the domestic business. Firstly, could you give some color on how in terms of pricing, how do you stand again, let's day, companies like Karam safety. I think previously you said you are in like -- in terms of size and operations, you are at a similar scale to them. So are you priced premiumly compared to them? Or is it different?

Rohit Mall

I would say, largely around similar client traffic with -- specifically with Karam, I think they have an advantage in a better brand recall for products like harnesses and fall arresters and helmets. And for us, it's a better recall for footwear and safety gloves. So that's, I think, where both of us enjoy some premium over the other. But largely, I would say, in -- overall in terms of pricing, I think it would be similarly priced and competing in the market. And sir, if I look at margins, I see that like broadly they operate in the 20%, 25% sort of EBITDA margin range. So is this because of -

Yes. That's a very, let's say, high value-added item for us, and we are working with some of the Indian players and mills and accessory providers to substitute this sort of import, and we have been able to get some of these fabrics being developed in India. Now it's not just the fact about development, it's also consistency and the pricing, which needs to match. So we are working very hard on this project. And hopefully, in the next 6 months, we should see the ability to substitute a lot of the imported items to more local -- with more local item.

Management

I have a couple of questions. So sir, one is our depreciation costs remained almost the same in H1 this year. So this is in respect of fact that we did a huge capex. So I wanted to understand as to how would the depreciation number look like the rest of the year? Second is are we seeing any traction for emerging sectors like semiconductors?

Shyam Sundar Agrawal

So regarding depreciation, you will see that slightly it has gone up, and this is only because of - - the Sanand unit is starting its operations from September only. So you will have a spike a little bit in -- for the second half. So that has been the major capex. And definitely, the depreciation will go up for the -- now this unit has started operations. And second one, Rohit, you can answer. Yes, we are seeing some movements in the newer industries. So we've already like in the last I would say, 5, 10 years, we've seen industries like logistics and warehousing and these kind of things, aviat

I just have 1 question. In the last 5, 6 years, our working capital deployment or I should say, in terms of the days has almost doubled from almost 60, 65 days, now almost 110 days. So one reason that I can think of is because that we are trying to sell under our own brand, which I believe is slightly more working capital intensive in nature. So going forward, what do you think on a, let's say, on a steady business cycle, this number should stabilize at?

Shyam Sundar Agrawal

So let me explain you. So how it is happening. One, it is by the nature of business itself. So we are in 2 business of PPE. And you will see that leather gloves is something where you will have the minimum -- working capital requirement. So -- but over the years, we have been diversifying into other kinds of products, primarily into garments and safety suits. There, you need to have more of inventory holding because of various logistical reasons, might be we need to import more for the manufacturing of these products, also to take care of lead time. And thirdly, it also depends on to which mar

Thank you all for participating in this earnings conference call. I hope we were able to answer all your questions satisfactorily, and at the same time, offer insight into our business. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations manager at Valorem Advisors. Thank you, and wishing you all a great day ahead.

Management

Speaking time

Rohit Mall

Moderator

Viraj

Shyam Sundar Agrawal

Manish

Rehan Saiyyed

Rushabh Shah

Chinmay Nema

Manav Vijay

Angad

Opening remarks

Angad

Thanks Trisha. Good morning, everyone. On behalf of B&K Securities, I welcome you all to Mallcom India Limited Q2 FY '26 Earnings Conference Call. From the management, we have with us Mr. Rohit Mall, Associate Vice President; and Mr. Shyam Sundar Agrawal, the Chief Financial Officer. Without taking much time, I will hand over the call to Rohit sir for his opening remarks. Post which, we will open the floor for the Q&A session. Over to you, sir.

Rohit Mall

Thank you, Angad. Good morning, everyone. It's a pleasure to welcome you all to our earnings conference call for the second quarter and the first half of the financial year 2026. I'd like to begin by extending our sincere thanks to B&K Securities for hosting today's call. Let me start by sharing a few operational highlights for the quarter under review, before handing it over to our CFO, Mr. Shyam Agrawal, who will take you through the financial performance. Let me begin with the capex update. Our Protech facility at Sanand, Gujarat has commenced commercial production and the current setup is now fully operational. We have invested around INR100 crores in this unit, and we plan to scale up capacity in a phased manner. And additional capex of up to INR10 crores has been earmarked for the import of new dipping line and knitting machines to support this expansion. We have commenced manufacturing PU-coated loves, related gloves, helmets and bump caps in this facility. This is an important

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