Melt n Mellow posts 16% EBITDA margin after FY26 turnaround

Melt n Mellow reached a 16% earnings before interest, tax, depreciation and amortisation (EBITDA) margin in Q2 FY27, reporting Rs 3.53 crore of EBITDA on Rs 22.50 crore revenue, after becoming EBITDA-positive in FY26, one year ahead of management’s original target.

How did Melt n Mellow turn EBITDA-positive ahead of plan?

Melt n Mellow moved from an EBITDA loss in FY25 to EBITDA-positive status in FY26, according to the presentation, which says the milestone was achieved one year ahead of management’s original target. The stated result establishes a change in the segment’s reported profitability before the Q2 FY27 performance, rather than merely a revenue-growth target or an expansion announcement.

The Q2 FY27 figures show the profitability measure during a period of continued expansion. Revenue was Rs 22.50 crore and EBITDA was Rs 3.53 crore, producing the stated 16% EBITDA margin. The presentation reports year-on-year revenue growth of 65%, EBITDA growth of 566%, and a margin improvement of 1,200 basis points, where one basis point equals one-hundredth of a percentage point.

The comparison between FY25 and FY26 is directional because the presentation identifies FY25 as an EBITDA-loss year without publishing a loss value, while FY26 is identified as EBITDA-positive. The comparison within Q2 FY27 is more specific: the stated 1,200-basis-point improvement and 16% margin indicate that the reported margin was higher than in the corresponding prior-year quarter.

What distribution scale supports Melt n Mellow’s growth?

Melt n Mellow had more than 18,750 deep freezers across retail touchpoints, following the addition of 1,472 freezers in Q2. Management’s FY27 target is 26,500 freezer units, making the freezer rollout a disclosed part of the plan to increase product availability in a category dependent on cold-chain placement.

The company reported more than 205 distributors across Mumbai, Pune, Hyderabad, Bengaluru, Goa and Nagpur, with distributor retention of 95%. It also had more than 13 company depots in key markets; the presentation says these depots are intended to improve availability, service efficiency and response time across the operating network.

Tamil Nadu became a new operating market through five locations covering Vellore, Hosur, Erode, Tiruvannamalai and Salem. That entry adds a southern state to the cities already listed in the distributor footprint, while the presentation describes the five locations as a platform for further market penetration rather than disclosing sales from the state.

Melt n Mellow’s business mix was reported as 96% business-to-consumer and 4% business-to-business. This mix means the freezer estate, retail touchpoints and distributor system are principally aligned with consumer sales, while business-to-business remains the smaller reported channel.

Which products and manufacturing assets are part of Melt n Mellow’s expansion?

Melt n Mellow reported more than 196 stock-keeping units, or SKUs, spanning cones, kulfi, choco bars, tubs and 700-millilitre family packs. Its listed core ranges include 12 cone flavours, six kulfi flavours, six choco-bar flavours, 12 Creamy Bliss tub flavours and 16 family-pack flavours, giving the brand offerings across single-serve and take-home occasions.

The six newer formats are Novelties, Cakes, Charms, Marvel Bars, Pastries and Zero Added Sugar. They contain 6, 6, 4, 11, 2 and 3 SKUs respectively; pack sizes range from 15 millilitres for Charms to 1,000 millilitres for Cakes. The Zero Added Sugar range includes products from 100 millilitres to 500 millilitres, while the presentation says the range has no added sugar.

Production is based at an Aurangabad, also called Sambhaji Nagar, facility with installed ice-cream capacity of 1 lakh litres a day. The same site has milk-products capacity of 20 metric tonnes a day and bakery capacity of 10 metric tonnes a day, alongside automated extrusion and stick lines, cone filling and a blast rotary tunnel.

The presentation also identifies a dedicated research and development centre for flavour innovation and product development under Melt n Mellow. Its planned branded-retail addition is the first Mellow & Co franchise-owned, company-operated store, which the company says is expected soon; no opening date or store-level revenue forecast is provided.

What industry changes does Melt n Mellow identify for its next phase?

Melt n Mellow operates in an Indian ice-cream market that the presentation expects to reach Rs 45,000 crore by 2028 and more than Rs 90,000 crore within about eight years. The cited industry material says consumption has grown fourfold over the past decade, although the presentation does not state Melt n Mellow’s market share or its contribution to that industry growth.

The company identifies six demand shifts: consumption moving from seasonal to year-round, traditional to premium, frozen desserts to dairy ice cream, out-of-home to at-home, classic to innovative flavours, and indulgence to health-aware choices. Its 700-millilitre family packs and Creamy Bliss tubs are positioned for at-home consumption, while the Zero Added Sugar line addresses the health-aware part of the stated product strategy.

The presentation also notes that goods and services tax on ice cream was reduced to 5% from 18%, effective 22 September 2025. This is a policy change disclosed in the industry section; the company does not quantify its effect on Melt n Mellow’s revenue, pricing, margins or consumer demand.

Conclusion

Melt n Mellow’s reported progression is from an EBITDA loss in FY25 to EBITDA-positive status in FY26, followed by Rs 3.53 crore of EBITDA and a 16% margin on Rs 22.50 crore of Q2 FY27 revenue. The result coincided with a network of more than 18,750 freezers, more than 205 distributors and entry into Tamil Nadu through five locations, linking profitability with broader distribution and format expansion.

The next disclosed milestone is the FY27 target of 26,500 deep freezers, compared with more than 18,750 currently, alongside the expected first Mellow & Co franchise-owned, company-operated store. Progress in those initiatives, and whether the reported 16% Q2 FY27 EBITDA margin is maintained while the company uses its 1 lakh-litre-a-day ice-cream capacity, are the operational developments to watch next.