Cello World Navigates Q3 FY26: Strategic Shifts Amidst Market Headwinds

Cello World reported consolidated revenues of INR553.7 crores with an EBITDA margin of 22.1% and PAT of INR63.6 crores, translating to a PAT margin of 11.5% for Q3 FY26.

The Consumerware segment experienced a marginal decline primarily due to stockouts in insulated steel products, which led to an approximate 40% quarter-on-quarter decline in steel revenues, impacted by BIS standards and production ramp-up.

The Writing Instruments segment delivered 11% growth in Q3 FY26. With the Cello brand acquisition, combined revenues for Unomax and Cello are expected to exceed INR500 crores in FY27, aiming for INR1,000 crores over the next two years.

Management expects margins to revert to a normalized 22% EBIT over the next two quarters as steel volumes normalize, operating leverage from new capacities kicks in, and portfolio rationalization efforts continue.

The state-of-the-art glassware manufacturing facility in Rajasthan, with an annual capacity of 20,000 tonnes, has been commissioned and is being operationalized in a phased manner. It is currently operating at about 60% utilization, with profitability expected to scale once utilization crosses 75-80%.

Long-term strategies include portfolio rationalization, premiumization of product offerings, expansion through digital channels, increasing in-house manufacturing capabilities for steelware and glassware, and disciplined working capital management.