Arrow Greentech FY26: Green Segment Grows While High-tech Recalibrates

Arrow Greentech closed FY26 with a softer set of consolidated numbers, but with one clear offset: its Green segment expanded meaningfully even as the High-tech business contracted. For the full year, consolidated revenue from operations came in at Rs 2,005 million, down 17.6 percent year-on-year from Rs 2,434 million. EBITDA was Rs 646 million with a 32.2 percent margin, versus Rs 884 million and 36.3 percent in FY25. Profit after tax was Rs 474 million, translating to a 22.7 percent margin, compared with Rs 630 million and 25.3 percent in FY25.

The company’s commentary framed FY26 as a mixed year. It described a strong pickup in its Green offerings, while the High-tech segment went through a phase of recalibration. The management also highlighted that the year was used to strengthen operational foundations through cost discipline, deeper customer engagement, continued R and D, and a product mix shift toward higher-value offerings.

FY26 performance in context

The quarterly picture underscored the slowdown. In Q4 FY26, revenue from operations was Rs 418 million, down 27 percent from Rs 573 million in Q4 FY25. EBITDA declined 35 percent to Rs 104 million, with margin compressing to 24.8 percent from 28.0 percent. PAT fell 35 percent to Rs 74 million, and the PAT margin softened to 16.8 percent from 19.3 percent.

Despite weaker reported numbers, the consolidated P and L shows gross margin resilience. FY26 gross profit margin was 54.5 percent versus 54.0 percent in FY25. However, EBITDA and PAT margins compressed as operating profitability fell in line with lower scale.

Segment mix shifts: Green gains share

The segment disclosure in the presentation shows a clear divergence. Green Products revenue rose to Rs 369 million in FY26 from Rs 243 million in FY25, a 52 percent year-on-year increase. Management also stated that the Green segment contributed 18 percent of FY26 revenue. By implication from the disclosed totals, the High-tech business contributed the remaining share and reported Rs 1,636 million in FY26, down from Rs 2,191 million in FY25.

In Q4, Green Products were steady at Rs 71 million versus Rs 70 million a year ago, while High-tech revenue fell to Rs 346 million from Rs 503 million.

This mix change matters because it signals where demand is currently supporting the business. The management commentary explicitly pointed to increasing acceptance of sustainable offerings and stated that opportunities for environmental friendly packaging should continue to grow.

Business model pillars: WSF, security, and pharma films

The presentation positions Arrow Greentech across multiple verticals.

One pillar is Water Soluble Films, marketed under Watersol as the flagship brand. The company describes WSF as a Polyvinyl Alcohol based film that dissolves completely in water, with end uses spanning detergent unit-dose packaging, agrochemicals, dyes and pigments, healthcare laundry bags, embroidery backing materials, and other industrial and consumer applications. The company also lists value-added processes such as embossing and printing.

A second pillar is Security Products, including anti-counterfeit products for high security papers and brand protection. The company states it has proprietary technology, an in-house R and D center, and supplies to leading paper mills.

A third pillar is intellectual property. The company states it has more than 50 patents globally, with 24 currently in force, and an active pipeline of patent applications. It also states it monetizes key patents through out-licensing and production of patented products. Trademarks are also highlighted, with 40 registered trademarks in India and additional applications under process.

A fourth pillar is its pharmaceutical films platform under Arrow RX through Avery Pharmaceuticals, a wholly-owned subsidiary. The presentation describes Avery’s Mouth Dissolving Strips platform as an embedded water-soluble film technology that enables rapid oral delivery through lingual, sublingual, and buccal routes. It also states the subsidiary operates a WHO GMP approved manufacturing facility in Sanand, Gujarat, and holds multiple certifications. The presentation lists a large nutraceutical portfolio under FSSAI and a set of Rx approved products, including nicotine, ondansetron, sildenafil, and other molecules at various approval stages.

The strategic framing is that these pillars share common know-how in film casting and embedding, and that innovation and IP creation remain central to Arrow Greentech’s long-term approach.

Cash flows and balance sheet: liquidity remains comfortable

The consolidated cash flow statement shows operating cash generation remained positive. FY26 net cash from operating activities was Rs 431 million versus Rs 676 million in FY25. The company reported a working capital outflow of Rs 94 million in FY26, compared with a marginal inflow in FY25. Investing cash flow was negative Rs 259 million and financing cash flow was negative Rs 71 million for FY26.

On the balance sheet, total assets increased to Rs 2,558 million as of March 2026 from Rs 2,084 million as of March 2025. Liquidity appears strong, with cash and cash equivalents of Rs 268 million and current investments of Rs 764 million. Total equity was Rs 2,362 million, while total liabilities remained low at Rs 196 million, indicating a relatively conservative capital structure.

The P and L also reflects low finance cost of Rs 4 million in FY26.

What management emphasized going forward

The Chairman and Managing Director’s note contained several forward-looking themes, though it did not provide numeric guidance such as revenue targets, capex numbers, or margin bands. The company stated that opportunities for environmental friendly packaging should grow and that its brand protection solutions are positioned to participate across India and global markets.

On the High-tech segment, management acknowledged a period of recalibration and stated it is being actively addressed through focused initiatives to restore momentum and align with evolving customer demand, also noting external disruptions such as turbulent geo-political events.

Across the portfolio, the company described a long-term operating lens that prioritizes sustainable and responsible growth, and cited actions taken during the year: enhancing cost discipline, deepening customer engagement, investing in R and D, and shifting the product mix toward higher-value offerings. It reiterated that innovation and IP creation remain central.

The Board also declared a dividend of Rs 5 per equity share for FY2025-26.

Takeaways

FY26 was a year where headline growth reversed, but the underlying mix moved in a direction the company wants to scale. Green Products grew strongly and increased its share of revenue, while High-tech revenue fell sharply and weighed on consolidated performance. Profitability remained healthy in absolute margin terms, even though margins compressed versus FY25.

The next set of disclosures will matter most around execution on the stated High-tech recalibration and whether the Green segment can keep compounding from a larger base. The presentation’s emphasis on patents, R and D, and film-based platforms across packaging, security, and pharma provides the strategic narrative. But investors will likely look for clearer milestones and measurable progress as the company moves into the new financial year.