Mamata Machinery FY26: A US Shock, New Markets, and a Push into Recyclable Packaging Technology

Mamata Machinery’s FY26 earnings presentation lays out a year that looks weak on the headline numbers but is framed by management as disruption-driven rather than structural. Consolidated revenue from operations fell to 23,300 lakhs in FY26 from 25,458 lakhs in FY25, a decline of about 8 percent. The sharper story was profitability. EBITDA fell to 1,911 lakhs from 5,465 lakhs, taking EBITDA margin down to 8.20 percent from 21.47 percent. PAT declined to 1,505 lakhs from 4,075 lakhs.

Management attributes the revenue decline entirely to the US business, which it says fell close to 50 percent in absolute terms during the year. The impact was amplified because the tariff disruption hit during Q2 and Q3, described as the company’s highest order intake period. Even as tariff uncertainty started to ease, fresh uncertainty from the West Asia conflict led customers to pause projects. In the last quarter, a sharp rise in polymer prices is cited as another factor that stretched customers’ working capital cycles and delayed capex decisions.

Despite the year’s compression, the presentation also highlights operational milestones that management believes support the long-term strategy. Packaging remains the stated growth engine, with wins such as a significant multi-machine VFFS order from a leading Indian snacks and namkeen brand and the company’s first packaging machine order from outside its traditional US and India markets, coming from South Africa. The company also expanded its international brand-building efforts through participation at Interpack 2026 in Düsseldorf.

FY26 performance: revenue down modestly, margins compressed sharply

The financial profile shows that the revenue decline in FY26 was moderate, but the margin impact was meaningful. Gross margin fell to 54.58 percent in FY26 from 60.77 percent in FY25. Operating expenses rose to 10,806 lakhs from 10,006 lakhs, contributing to negative operating leverage.

Management calls out several drivers behind the profitability decline. A lower export mix reduced blended margins because exports are stated to be higher margin. Product mix and commodity price inflation also played a role. In addition, the company absorbed a one-time provision of about 3.05 crore in employee benefit expenses due to labour code amendments. Exhibition expenses increased to 10.2 crore from 6.2 crore, as several marquee exhibitions fell within FY26.

The quarterly snapshot shows how weak Q4FY26 was on profitability. Q4FY26 revenue from operations was 7,375 lakhs versus 11,104 lakhs in Q4FY25. EBITDA in Q4FY26 was 71 lakhs, and PAT was 1 lakh.

Business mix and segment performance: converting remains largest, packaging seen as growth driver

Mamata positions itself as a total solutions provider for flexible packaging with presence across the value chain: co-extrusion, converting, and packaging. The presentation provides machinery-sales revenue by vertical and also gives product-wise mix in percentage terms.

For FY26, machinery sales revenue by vertical is shown as:

• Converting: 10,864 lakhs
• Co-extrusion: 3,390 lakhs
• Packaging: 4,884 lakhs

The product-wise revenue breakdown by percentage for FY26 is:

• Converting machinery: 47 percent
• Co-extrusion machinery: 21 percent
• Packaging machinery: 14 percent
• After sales: 3 percent

The presentation notes that the vertical revenue break-up on the product performance slide is only for machinery sales and does not include attachments and spares and after-sales services. Investors should treat mix percentages and absolute numbers carefully because not all categories are reconciled to the revenue from operations number.

Over four years, packaging machinery sales have increased from 2,450 lakhs in FY23 to 4,884 lakhs in FY26, supporting the company’s stated intent that packaging is a key growth driver. Converting, however, remains the largest contributor in percentage terms.

Geography and the FY26 shock: North America falls, India and RoW rise

The geographic revenue split is one of the clearest data points supporting management’s explanation. North America’s share dropped to 26 percent in FY26 from 37 percent in FY25. India rose to 37 percent from 29 percent, and Rest of World increased to 38 percent from 34 percent.

This shift aligns with management’s commentary that the decline is attributable to the US market. It also supports the claim that the organisation attempted to offset the shortfall through other geographies and business segments and recovered a meaningful part of the gap.

Management’s forward-looking commentary emphasises two parallel goals: recouping lost ground in the US as tariff policy becomes more conducive, and scaling the packaging business through new geographies and channel partners.

Technology and market development: RecTech and global exhibitions

A central strategic thread in the presentation is that Mamata aims to be at the forefront of recyclable technology. In FY26, management highlights the launch of RecTech at Plastindia 2026. RecTech is described as an advanced, fully recyclable mono-material film that delivers superior barrier protection and mechanical performance compared to conventional non-recyclable composite structures such as PET plus PE and PET plus MPET plus PE.

On global market development, the company highlights its maiden appearance at Interpack 2026 in Düsseldorf, where it showcased its complete packaging technology portfolio with the intent to strengthen the international footprint and open the European market. The presentation also shows higher exhibition spends in FY26 at 1,020 lakhs, or 4.5 percent of sales, versus 620 lakhs or 2.4 percent in FY25.

Cash flow and balance sheet: operating cash flow fell sharply in FY26

While the company describes itself as net-debt free and capital-efficient, the cash flow snapshot shows a weak year for cash generation. Cash flow from operating activities was 244 lakhs in FY26 versus 7,255 lakhs in FY25. Investing cash flow was negative 4,517 lakhs in FY26, and cash and cash equivalents at the end of the year were 1,220 lakhs.

The KPI slide also shows operating working capital improving to 9 percent of revenue in FY26 from 19 percent in FY25, but that did not translate into strong operating cash flows in the year.

Takeaways

Mamata Machinery’s FY26 was defined by an external shock in the US market and a sharp compression in profitability. Management has provided a detailed narrative on the causes: tariffs affecting peak order intake months, geopolitical uncertainty delaying customer projects, and polymer price inflation influencing customer capex decisions. The company expects FY27 to return to growth and sees profitability normalising as topline recovers and one-off costs roll off.

The presentation points to strategic continuity: packaging as the growth engine, early traction in new markets such as South Africa, and technology positioning through RecTech aligned to recyclable packaging trends. The key test in FY27 will be whether the US recovery materialises and whether operating leverage returns, given the steep margin compression seen in FY26.