Chemkart India’s FY26: Strong H2 Momentum, But Margins and Cash Flow Tell a Cautious Story

/Chemkart India’s FY26: Strong H2 Momentum, But Margins and Cash Flow Tell a Cautious Story

Chemkart India Limited’s May 2026 investor presentation frames FY26 as a year of steady demand but uneven profitability. On a consolidated basis, FY26 revenue from operations increased to INR 214.83 crore from INR 203.28 crore in FY25, a 5.7% year-on-year rise. The second half was notably stronger, with H2 FY26 revenue of INR 111.60 crore growing 23.8% over H2 FY25.

The earnings picture was less straightforward. FY26 consolidated EBITDA declined to INR 28.18 crore from INR 32.87 crore in FY25. PAT also fell to INR 19.66 crore from INR 24.53 crore. In H2 FY26, EBITDA and PAT still grew year-on-year, but margins compressed. The company’s narrative links the FY26 environment to supply chain disruptions, pricing corrections across categories, and uncertainty around US tariff policies affecting certain export-oriented clients.

Chemkart operates as a B2B supplier of raw ingredients used in nutritional, sports, and health supplements across India. It combines distribution with light processing through an in-house blending and grinding setup. The presentation positions the company’s next phase around a greenfield SEZ manufacturing facility through its wholly owned subsidiary, Easy Raw Materials Pvt. Ltd. (EZRM), aimed at entering nutraceutical CDMO operations.

FY26 performance: H2 growth, but lower full-year profitability

In H2 FY26, Chemkart reported revenue of INR 111.60 crore, EBITDA of INR 14.02 crore, and PAT of INR 9.50 crore. While H2 numbers show growth versus H2 FY25, the margins weakened. H2 FY26 EBITDA margin reduced to 12.6% from 14.0% in H2 FY25, and PAT margin declined to 8.5% from 9.9%.

For the full year, the contraction is clearer: FY26 consolidated EBITDA margin was 13.1% versus 16.2% in FY25. PAT margin was 9.1% versus 12.1%. The presentation does not provide a single quantified driver of margin pressure, but points to broad category-level pricing corrections and operating uncertainty.

The company also highlights return ratios for FY26, with ROE at 15% and ROCE at 21%. These are materially lower than the exceptionally high FY23 to FY25 return profile shown in the historical section, indicating the current balance sheet expansion and profitability shift.

Revenue mix: Amino acids and sports nutrition dominate

Chemkart provides a category mix in the presentation. FY26 revenue is concentrated in two buckets: Amino Acids at 48.5% and Sports Nutrition at 30.9%. Health Supplement contributes 14.1%. Other categories are smaller, including Protein, Herbal Extract, Vitamins, Nucleotide, and Other.

The segment table in the presentation presents category revenues in USD terms across FY24 to FY26 and also provides the FY26 total aligned with the company’s standalone revenue figure. Based on the FY26 share chart, the mix underscores that Chemkart’s core business is still largely ingredient-centric, with the bulk of volumes tied to performance nutrition and amino acid demand.

Geographically, the business remains overwhelmingly domestic. The geographic revenue breakup shows exports at 1.3% and domestic at 98.7%. The company lists multiple international locations on its map, but the revenue dependence is still India-led.

Manufacturing pivot: EZRM SEZ facility is the strategic fulcrum

A central theme of the presentation is the transition from distribution and processing into manufacturing. Chemkart has announced full-scale construction of a greenfield facility at EZRM in the JNPT Special Economic Zone in Maharashtra. The facility is positioned as a next-generation nutraceutical CDMO operation, with integrated formulation, packaging, and global dispatch.

The stated design includes tablets, capsules, jars, and sachets as dosage formats. It also emphasizes export readiness, including SEZ-compliant labelling, documentation, and logistics. The location is framed as strategic due to proximity to India’s largest container port and SEZ duty advantages.

The company also stresses that novel technologies will be a key differentiator. It mentions microencapsulation, liposomal delivery systems, and enhanced bioavailability formats as focus areas. In the Vision 2030 roadmap, it further references scale-up of liposomal microencapsulation, nanoemulsion, and beadlets, along with an R&D innovation center.

Project execution details are limited to civil progress updates, but the presentation does provide a relatively specific operational snapshot: foundation and plinth-level activities are underway, with reinforcement and casting for pile caps, soil compaction, anti-termite treatment, soling, and commencement of external brickwork and lift structure.

Balance sheet and cash flow: cash up, operating cash negative

One of the more important signals in the FY26 disclosure is the divergence between profitability and cash generation. The consolidated cash flow statement shows net cash from operating activities at negative INR 2.73 crore in FY26, compared to positive INR 3.70 crore in FY25. The key driver is working capital movement, shown as a negative INR 24.18 crore in FY26.

At the same time, financing inflows were substantial at INR 43.41 crore, resulting in a sharp rise in cash and cash equivalents to INR 38.65 crore at March 2026 from INR 2.83 crore at March 2025.

The consolidated balance sheet also shows an increase in inventories to INR 34.73 crore and trade receivables to INR 49.98 crore. Short-term borrowings reduced sharply to INR 4.95 crore from INR 16.93 crore, a positive change in leverage profile, but the working capital build still matters for near-term liquidity discipline.

What management is emphasizing going into FY27

The management commentary strikes a cautious but constructive tone. It acknowledges FY26 headwinds and attributes performance to supply chain disruptions and pricing corrections, while highlighting volume growth of about 7.1% and steady demand.

The company points to progress on the EZRM SEZ facility as a foundation for the next growth phase. It also states that it will focus more on R&D, product innovation, and advanced nutraceutical technologies going forward.

A useful disclosure in the commentary is order visibility. As of 31 March 2026, the company reported advance and open orders exceeding INR 65.26 crore, along with a robust sales and project pipeline. While not a formal guidance, it provides a tangible indicator of near-term demand visibility.

Investor takeaways

Chemkart’s FY26 presentation reflects a company in transition. The core distribution and ingredient supply business delivered a strong H2 rebound in revenue, but full-year profitability and operating cash flow weakened versus FY25. At the same time, the company is committing to a manufacturing and CDMO pivot through its EZRM SEZ project and a technology-led product roadmap.

For investors, the key variables to track from here are straightforward: execution milestones on the SEZ facility, the pace at which export contribution moves beyond the current 1.3%, and whether margins and operating cash conversion recover as the business scales and the product mix evolves. The opportunity is clear in the narrative, but FY26 numbers show that execution discipline and working capital management will be just as important as growth ambition.