Pakka (516030) Q2 25/26 earnings summary

Executive summary

• Innovation and new product launches, especially in Food Services and Flexibles, drove growth, with B2C revenue doubling and key accounts like IRCTC onboarded.

• Asset-light strategies and outsourcing are being implemented to optimize production and scalability.

• Project Jagriti and the Kawok moulded fibre project are progressing, though Jagriti faced delays due to funding and supplier issues, with completion now targeted for Q2 or Q1 of the next financial year.

• Leadership is focused on strengthening execution capabilities and maintaining long-term sustainability commitments.

• Total income for H1 FY26 was ₹16,269.46 lakhs, down from ₹21,411.76 lakhs in H1 FY25, with a net loss of ₹363.83 lakhs.

Financial highlights

• Food Service revenue for the quarter was ₹15.74 Cr, up 14% year-over-year, but the segment reported a PBT loss of ₹1.06 Cr.

• B2C channel revenue doubled from ₹40 lakhs to ₹80 lakhs between April and September.

• Q2 FY26 revenue was ₹78.39 Cr, down 32% year-over-year; Q2 FY26 PBT was ₹0.40 Cr, a 98% decline year-over-year.

• EBITDA margin dropped to around 2% due to shutdowns, higher costs, and increased B2C marketing spend.

• CapEx incurred on Jagriti is about ₹400 crores, with ₹350 crores pending; total project cost revised from ₹675 crores to ₹750 crores.

Outlook and guidance

• Profitability is expected to improve as production stabilizes and new products are commercialized.

• B2C sales channels are set to increase from 3 to 10 in the next 6 months, with new product launches and portfolio expansion planned for Q3 and Q4.

• Project Jagriti is optimized for commissioning by July 2026.

• Guatemala project to be expedited with a smaller initial investment, aiming for production by Q4 2026 or Q1'27.

• The merger of Pakka Impact Limited is pending regulatory approval.