Mallcom FY26: Revenue Growth Holds Up, But Margins Feel the Weight of Tariffs, Raw Materials, and a Big Capex Cycle

Mallcom (India) Limited ended FY26 with a familiar mix for manufacturing-led exporters: healthy top-line growth, but profitability pressured by costs and pricing. On a consolidated basis, operational income rose to INR 5,396 million (about INR 539.6 crores), up 10.8% year-on-year. EBITDA stayed broadly flat at INR 605 million (about INR 60.5 crores), but the EBITDA margin narrowed to 11.21% from 12.51% in FY25.

Net profit for FY26 came in at INR 300 million (about INR 30.0 crores), translating into a PAT margin of 5.56%. Management cautioned that FY26 and FY25 profitability are not comparable to the extent of a one-time capital gain in FY25 from the sale of land amounting to INR 254 million.

In Q4 FY26, the company’s revenue growth continued, but margins compressed sharply. Operational income was INR 1,467 million (about INR 146.7 crores), up 6.6% year-on-year and 11.8% sequentially. EBITDA fell 11.0% year-on-year to INR 137 million (about INR 13.7 crores), with the margin contracting to 9.34%. Profit after tax was INR 63 million (about INR 6.3 crores).

What drove the year: domestic growth, export headwinds

Management framed FY26 as a year of resilience alongside the most ambitious investment phase in the company’s history. The domestic business remained the growth engine, with management stating domestic revenue grew by approximately 20% year-on-year. Exports, however, faced pressure.

Two factors stood out in management commentary.

First, export realizations were lower in OEM markets. Management attributed this to weak demand and competitive intensity, especially in Europe. They said that, in some cases, concessions were required to retain market share and prevent customers from switching suppliers.

Second, raw material costs rose across categories. Management described the primary raw material buckets as textiles, leather, and polymers and synthetics such as PU, PC and NBR type chemicals. Many of these inputs are petro-based, and management indicated cost increases were visible broadly across the board.

In India, the company attempted to pass through cost inflation by revising price lists twice in the last quarter. But management emphasized that pricing in the domestic channel also carries a lag due to long-term rate contracts and order backlogs that need to be honored.

Product mix and capacity: shoes lead, and new plants begin ramp-up

Mallcom positions itself as a head-to-toe PPE manufacturer and distributor, with capabilities across textiles, leather, rubber, and plastic. In FY26, the company’s product revenue mix was heavily skewed toward safety footwear.

Safety Shoes accounted for 48% of FY26 revenue, Gloves 28%, Garments 22%, and Others 2%. Using FY26 operational income of about INR 539.6 crores as the base, this implies safety shoes contribute roughly INR 259.0 crores, gloves about INR 151.1 crores, garments about INR 118.7 crores, and others about INR 10.8 crores.

The strategic relevance of this mix is reflected in Mallcom’s recent capex.

The company said a newly set up unit for designing and manufacturing industrial safety shoes at Chandipur (Ghatakpurkur), West Bengal, involving capex of INR 250 million, is fully operational.

It also highlighted the Protech workwear unit at Sanand, Gujarat, which has started commercial production. The total capex for the unit stood at INR 1,050 million.

On the concall, the CFO provided an early operating datapoint for Sanand, stating the unit was running at around 50% capacity and the company was working to improve utilization gradually. With the existing setup, management targeted about INR 40 crores in annual revenue.

Mallcom also started manufacturing PU coated gloves and PVC gumboots, positioning them as import substitutes for domestic customers while also addressing overseas demand. Management said it can compete with imports on pricing when comparing standardized products, and the issue with imports is often lack of standardization rather than only price.

For PU gloves in India, management cited import data indicating India imports roughly INR 80 to 90 crores of these gloves, framing a visible addressable opportunity.

Financial snapshot: growth, but operating leverage has not yet returned

The company’s consolidated financial trajectory over the last four years shows steady revenue expansion, but a consistent margin drift.

Operational income rose from INR 4,106 million in FY23 to INR 5,396 million in FY26. Over the same period, EBITDA margins declined from 14.27% to 11.21%.

PAT has been more volatile. FY25 included high other income, which is also visible in the income statement where other income in FY25 was INR 289 million versus INR 7 million in FY26. The annual statement explicitly notes the FY25 capital gain of INR 254 million from land sale.

A notable post-capex impact is visible in depreciation and finance cost.

Depreciation increased to INR 124 million in FY26 from INR 96 million in FY25. Finance cost rose to INR 82 million from INR 61 million.

The balance sheet expanded meaningfully. Total assets increased to INR 5,125 million in FY26 from INR 4,928 million in FY25, with property, plant and equipment rising to INR 2,243 million.

Working capital remains large relative to cash. FY26 inventories were INR 1,384 million and trade receivables were INR 862 million, while cash and cash equivalents were INR 38 million.

Financial summary (Consolidated)

Note: FY25 PAT includes a one-time capital gain on land sale (INR 25.4 crores) as disclosed by the company.

Geography and market development: diversify beyond Europe and the US

Mallcom remains export-oriented, and the presentation provides a clear FY26 geographical revenue mix: Asia 47%, Europe 33%, Americas 18%, and Africa and Australia at 1% each.

Management noted that Europe was weak and that the US remained difficult given tariffs and trade policy constraints. In the concall, management explained that the US has a Trade Agreements Act list of preferred sourcing countries, and unless a trade deal is in place, shifting customer sourcing can remain challenging.

At the same time, management indicated certain export markets performed better. They mentioned South America doing well, as well as Australia and Russia. Africa was described as doing well, while the Middle East was described as okay.

To build a stronger presence in the Middle East and Africa, the company said it has set up a marketing arm in the UAE. In the concall, management said a dedicated team is working on the region.

Market development efforts include participation in domestic and international fairs and exhibitions, customer visits to facilities, and sample-driven promotion of new product launches.

Outlook: growth expected, margins depend on stability

Management’s forward commentary had two clear elements: a baseline growth expectation and a desire to normalize margins.

When asked about the ability to achieve 10% to 12% growth, management responded that it was confident that this was the bare minimum, subject to unforeseen events.

On profitability, management stated it would like to return to the EBITDA margin profile seen before the recent disruptions and the investment phase. However, management also acknowledged near-term uncertainty, noting the need for stability and indicating margins may remain subdued unless raw material costs ease or demand improves.

On capex, the CFO said the company spent around INR 34 crores in FY26 and has a budget of around INR 10 to 15 crores for the current year. The CFO added that the company expects annual capex to stay in the INR 10 to 15 crores range for now, including both maintenance and incremental additions depending on demand, across Sanand, Kolkata and Chandipur.

Regarding leverage, the CFO indicated that with major capex largely completed, and with the current level of operations and outstanding debt, the company can pay most of the debt over the next four years.

Key takeaways

Mallcom’s FY26 numbers show that the demand engine has not stalled, with double-digit revenue growth achieved even in a year marked by tariffs and weak European demand. But the year also highlights that operating leverage has not yet reasserted itself after the capex cycle, and margins remain sensitive to raw material inflation and OEM export pricing.

The strategic narrative for FY27 hinges on three levers that management repeatedly referenced: sustained domestic penetration, gradual ramp-up of the new Sanand and Chandipur capacities, and import substitution through new product categories such as PU coated gloves and PVC gumboots.

The company has outlined a relatively modest capex plan going forward. If utilization improves and pricing stabilizes, the completed investment phase could begin to translate into stronger profitability. But management was clear that the near-term margin outlook depends on external stability in demand and input costs.