Pajson Agro India Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Revenue nearly doubled in two years: Full-year total income grew 37.19% YoY to ₹256.92 crores, driven by a dual-engine strategy of institutional B2B and a brand-led distribution model now spanning 170+ distributors.
• H2 margin compression from external shocks: EBITDA margins fell from ~18% in H1 to ~11% for the full year, hit by a 10.5% forex move, raw cashew nut price spikes, and IPO expenses entering the P&L.
• A greenfield plant is the next growth leg: A second facility in Andhra Pradesh targets commercial production in Q3 FY27, taking total capacity to 70,000 MT by FY30 and adding ~₹475 crores in peak revenue.
• The brand pivot is insulating the business: The Royal Mewa brand grew 6.5x this year, a deliberate shift from pure B2B to capture retail margins and build long-term household equity.
• What to watch next quarter: Whether hedging contracts materialize to protect against the forex and shipping volatility that compressed H2 margins, and the pace of new plant capex deployment with ₹25 crores in POs still to be issued.

The Growth Engine: Dual Strategy & Capacity

• Dual-engine model: Revenue growth came from a high-volume institutional B2B foundation and a distribution-led model that expanded to over 170 distributors across 20+ states, capturing better margins in retail-facing segments.
• Technology drove revenue ahead of capacity: Revenue nearly doubled in two years while capacity increased only 40-50%, because a November 2023 tech upgrade improved kernel recovery ratios, lifted whole-grain recovery, stopped kernel contamination, and cut energy use.
• Existing facility still has room: The 18,000 MT plant operated at 86% utilization, and management expects another 20-22% increment from current levels before the new plant contributes.
• Revenue per kg jumped: Realization moved from ₹120 to ₹161 per kg, driven by the technology upgrade improving output quality and by movement in commodity prices.
• No exports yet, but planned: The company exported some cargoes in FY25 but did not export in FY26; it will look at export markets once the new facility is in place, with long-term ambitions to serve Europe, the US, the Middle East, and China.

Pulkit Jain: "We are not just building a factory. We are building a high-margin automated processing hub that will significantly lower our per unit conversion costs."

Margin Walk: The H2 Compression

• Forex was the primary hit: Currency moved nearly 10.5% from its April 2025 base, impacting raw material procurement since the company imports raw cashew nuts.
• RCN prices spiked late: Raw cashew nut prices moved up in the later part of the year, making H1 margins materially better than H2.
• IPO costs entered the P&L: IPO-related expenses also contributed to the margin decline from ~18% to ~11%.
• Mitigation is in motion: Hedging processes with banks have been initiated, and some cost is being passed to customers via higher sales prices and to suppliers via lower purchase prices, balancing gross profit.
• Risk remains unhedged for now: Management acknowledged India could see further currency devaluation and is still talking to banks and shipping lines for longer-term contracts, with no finalized timeline.

The New Plant: Timeline, Scale & Economics

• IPO proceeds are funding it: Of the ₹74.45 crores raised, ₹57 crores is earmarked for the Vizianagaram facility; ₹39.53 crores was already committed via purchase orders as of March-end.
• Timeline: Trial productions begin November or December FY27, with commercial production from Q3 FY27.
• Ramp-up path: Management expects ~15% capacity utilization in FY27 (one quarter of operations), 65-70% in FY28, and 85-90% by the following fiscal.
• Revenue potential: The extra capacity can generate ~₹475 crores at 85% utilization.
• Margin uplift expected but unquantified: Management expects scalability to improve margins by "a couple of percent" but declined to give an exact number.
• Order visibility is thin by design: Institutional customers provide visibility of only one to three months, so no specific order backlog was disclosed, though 78% repeat revenue and an inability to serve new customers were cited as demand signals.

Brand, Distribution & the Retail Pivot

• Royal Mewa grew 6.5x: The brand moved from a pure B2B model to a brand-led model, insulating Pajson from commodity price swings and building long-term equity with Indian households.
• Quick commerce entry is in the pipeline: The company is already talking to Blinkit and Zepto, with certain prerequisites being fulfilled for listing.
• Marketing spend will be selective: A marketing budget focused on social media and online channels is being set up, but management was explicit it will not compromise margins to increase brand visibility.
• India is the anchor: Management noted India consumes 30-35% of global cashew production, making it the primary focus over exports for now.

Aayush Jain: "By moving from a pure B2B model to a brand-led model, we are insulating Pajson from commodity price swings and building long-term equity with Indian households."

Supply Chain & Sourcing Moat

• Farm-gate sourcing across seven countries: The company sources directly at the farm gate through deep relationships with local buying agents across seven producing countries, a supply chain built to withstand disruptions.
• No clear margin edge by origin: Management declined to provide a specific margin differential between Indian and African raw cashew nuts, stating pricing depends on buying throughout the season from each region to average out the purchase price.
• Inventory normalized: The increase in inventory this year reflects a return to normal operating levels after last year's plant shutdown for expansion deliberately depleted stock.
• Receivables rose with institutional mix: Trade receivables increased because the focus on growing revenue with institutional customers involves more credit, unlike last year when the plant shutdown led to a sell-off and collection of receivables.

Aayush Jain: "We don't just buy from the market. We source at the farm gate. By maintaining deep relationships with local buying agents across seven producing countries, we have built a supply chain that does not break when the wind changes."

Guidance & Commitments

Key Metrics