Srigee DLM FY26 Concall Decoded: PAT More Than Doubled, Yet Capacity Is Still Maxed
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1. Opening Hook
Srigee DLM’s H2 FY26 profit more than doubled year-on-year. The company is now sitting at ₹72.31 cr in annual revenue and plans to build a facility 4x its current size—but won’t start until August 15, maybe before Diwali, execution risk included. Management is swinging for ₹350 cr in turnover “at least,” though the next two quarters will see production hit pause while machines are moved. The real story: growth is capped by floor space, not demand. Everything hinges on whether a new plant on a 10,850 sq m plot actually lands on time.
2. At a Glance
Metric
Punchline
FY26 Revenue
₹72.31 cr; growth stuck at 1.53% YoY.
H2 PAT
₹5.53 cr, up 105% QoQ and more than doubled YoY.
Operating Margin (FY26)
7.99%—a 236 bps drop from FY25’s 10.35%.
EBITDA Margin (FY26)
12.18% (₹9.23 cr).
Other Income (FY26)
₹3.45 cr, up from ₹0.13 cr in FY25.
Capacity Utilization
Injection molding at 218% (overshooting rated 2,750 lakhs); polymer compounding at 41.14% (slack).
Top 10 Customer Concentration
91% of revenue (down from 95% last year).
Polymer Compounding Scale
50 MT/month now; target 150 MT/month at new facility.
Capex Plan
~₹25 cr (ex-land) for R11A facility; broader ₹50 cr project funded via IPO, bank debt, and asset sales.
New Facility Timeline
Commissioning target: post-Aug 15, before Diwali; 2 quarters of production disruption planned.
3. Management’s Key Commentary
On OEM Pricing & the Margin Trap:
“In our market, the OEM business is set. That format is already set. We don’t negotiate much.”
(Translation: OEM customers dictate margins. Srigee takes what the market allows.)
“If I manufacture that same thing in-house, it will cost me INR 90… saving INR 10… 10% to 20% saving. Plus, when I sell to other customers… earning a INR 20 margin—INR 10 from manufacturing efficiency and INR 10 from the sales margin.”
(Translation: Backward integration into polymer compounding is the only lever to escape the price-taker trap—cut internal costs, then resell the same capability at a margin outside.)
On H2 PAT Growth:
“This performance… is not only going to be sustained, but it is going to grow.”
(Translation: Current results will hold. Growth is next, once capacity constraint lifts.)
“The other income… has been added… That’s why… more increase in the PAT.”
(Translation: H2 PAT jumped partly because other income hit ₹2.91 cr in Q4 alone—a 22x jump from Q3’s ₹0.54 cr. Strip that out and the operating story is steadier but less dramatic.)
On Polymer Compounding (Polymos):
“We are aiming for a 3x expansion in this polymer compounding segment.”
(Translation: Current 50 MT/month → 150 MT/month; revenue ramp from ~₹1 cr/month now to ₹2.50–₹3 cr/month this year, then double that next year.)
“Approximately INR 1 crore monthly currently from one segment; conservative basis… INR 2.50 to INR 3 crores monthly this year… almost double in this financial year, and we will 3x it in the next financial year.”
(Translation: Polymer compounding is a small revenue base being projected to triple in 12 months. “Conservative” is aspirational language here.)
On Capacity Constraint & Diversification:
“We are utilizing 100% of our capacity.”
(Translation: No slack for new customers unless a new facility lands.)
“The moment I bring them for a visit, they ask where I will do the work. There is no space.”
(Translation: Three potential ODM/OEM customers are waiting. Srigee can’t close them until it builds the R11A facility.)
On New Facility Capex & Funding:
“We are not planning the Ecotech 10 facility right now because we shifted that fund to the new, larger plot. Why spend money here, shift machines, and then move again… There was no feasibility.”
(Translation: Scrapped the smaller 2,000 sq m plan; bet the entire capex budget on one bigger facility to avoid duplication and multiple migrations.)
“Initial level discussion… around 8% to 8.25%. They are saying 9.50%, and I am saying 8.25%.”
(Translation: ICICI debt talks ongoing; cost of capital will be in the 8–9.5% range depending on final negotiation.)
On Commissioning Risk:
“Target ‘August 15’, but with contractor risk; still ‘definitely before Diwali… 100% sure’ for moving in and starting production.”
(Translation: Diwali is the real deadline. August 15 is optimistic.)
