Pajson Agro’s FY26: Scaling an integrated cashew platform after a milestone listing

Pajson Agro India Limited closed FY26 with a bigger operating base and a clearer growth plan. The company, listed on the BSE SME platform in December 2025, operates an integrated model that starts with sourcing raw cashew nuts from Africa and ends with graded kernels sold through distributors, institutions, and a small but growing consumer brand.

In FY26, total income rose to 256.92 crore versus 187.28 crore in FY25. EBITDA increased to 37.82 crore from 30.26 crore, while PAT grew to 24.78 crore from 20.41 crore. H2 FY26 continued that momentum, with total income of 138.54 crore compared with 100.85 crore in H2 FY25, and PAT of 10.57 crore against 9.70 crore. The numbers reflect a company that is expanding throughput and widening its customer funnel, while also absorbing the near-term cost and working-capital pressures that come with faster scale.

Under the hood, Pajson Agro’s model remains anchored in kernel sales. Cashew kernels contributed 93.49 percent of FY26 revenue, up from 89.23 percent in FY25. By-products and other lines are still small, but the mix shows the company is starting to monetise more of the value chain. The broader story is less about diversification today and more about building the capacity, sourcing resilience, and institutional relationships that can support much larger volumes over the next few years.

H2 FY26 performance: growth, but margins softened

H2 FY26 revenue reached 137.35 crore, up from 100.84 crore in H2 FY25. Total income was 138.54 crore, a 37.38 percent year-on-year increase. EBITDA rose 18.68 percent to 16.76 crore, and PAT increased 9.04 percent to 10.57 crore.

But profitability ratios declined. EBITDA margin moved to 12.10 percent from 14.00 percent, while PAT margin fell to 7.63 percent from 9.61 percent. The cost structure explains much of the squeeze. Raw material expense in H2 FY26 was 105.94 crore versus 76.00 crore in H2 FY25. Employee costs increased to 6.41 crore from 4.56 crore, and other expenses rose to 9.44 crore from 6.16 crore. Finance cost also rose to 1.65 crore from 0.79 crore.

This pattern fits a typical scale-up phase in commodity-linked agri processing. Volumes and revenues expand quickly when supply and demand align, but the margin line can move around with input prices, processing efficiency, and working-capital needs. For investors, the key question is whether margin dilution is temporary and whether planned capacity additions can improve unit economics through better throughput and automation.

The engine: institutional demand and a widening channel mix

Pajson Agro’s sales model has two strong pillars: a distributor network and an institutional customer base. The company reported 170 plus distributors across 20 plus states and union territories. At the same time, institutional revenue contribution has been rising.

In FY24, distributors accounted for 80.42 percent of revenue and institutions for 18.54 percent. By FY26, distributors were 65.21 percent and institutions had expanded to 33.96 percent. This shift matters because institutional demand can be larger and more recurring when relationships are stable. The company stated that 78 percent of revenue came from recurring customers as of March 2026, supporting the view that customer stickiness is improving.

The geography also shows where the current demand concentration sits. In FY26, Delhi contributed 24.76 percent of revenue, followed by Maharashtra at 13.40 percent and Rajasthan at 12.94 percent. Andhra Pradesh contributed 12.00 percent, while Uttar Pradesh was 9.11 percent and Haryana 7.27 percent. The spread suggests the company has moved beyond a single-region footprint, but it is still reliant on a few large markets, which makes distributor depth and institutional penetration critical for de-risking.

Product-wise, cashew kernels remain the main revenue driver. FY26 revenue mix was 93.49 percent kernels, 4.65 percent raw cashew nuts, 0.85 percent by-products, and 0.97 percent others. The kernel dominance is typical for processors, but the gradual appearance of by-products indicates a push toward near-zero waste utilisation, which management highlighted as part of value extraction.

Processing scale, sourcing reach, and the next capacity step

The company’s current installed capacity is 18,000 MTPA with about 86 percent utilisation as of March 2026. The processing facility is in Andhra Pradesh, and the automation stack includes shelling machines, silos for holding and drying, colour sorters, peeling machines, and sorting systems for peeled kernels. Certifications include HACCP, ISO, and Halal.

A central part of Pajson Agro’s investment case is the expansion plan. The company has acquired 7.73 lakh sq. ft. of land in Vijainagaram, Andhra Pradesh for a second processing facility and has guided to add 35,000 MT of additional capacity. Trial production is targeted to commence in Q3 FY26, and the long-term target capacity is 65,000 to 70,000 MT by FY30. In the management commentary, the Chairman and Managing Director also referenced an expansion from 18,000 MTPA to 55,000 MT.

Progress on the greenfield site is described as tangible. Site clearing and land leveling are complete. Production shed foundation work and the raw cashew nut warehouse foundation work are ongoing. On approvals, approval from the Irrigation Department has been received, CTE has been received, and approvals from VMRDA are under process. On procurement, purchase orders issued up to 31 March 2026 totalled 39.53 crore, with 10.47 crore advanced against issued POs. The company planned to issue additional POs of 25 crore in Q1 FY27.

Sourcing is the other half of the scaling story. Pajson Agro sources raw cashew nuts mainly from African origins, including Ghana, Ivory Coast, Nigeria, Guinea-Bissau, Tanzania, Togo, and Burkina Faso. The company positions multi-origin procurement and farm-gate relationships as a structural advantage to manage supply and price volatility. For a processor, this matters because raw cashew is the largest cost item, and procurement consistency influences both utilisation and gross margin.

The market context provides supportive demand signals. Global raw cashew production is estimated at about 5.5 to 5.8 million MT annually, concentrated in Africa and Asia. West Africa contributes nearly 60 percent of global production. India is also a major consumption market, accounting for over 30 percent of global consumption, with annual kernel consumption estimated at 4,25,000 MT, equivalent to about 1.8 million MT of raw cashew nuts. Demand drivers cited include healthy snacking and growing usage in food processing and ingredients.

Royal Mewa: small today, but a signal of downstream ambition

Pajson Agro’s consumer-facing brand, Royal Mewa, is still a small contributor, but it is growing quickly. The presentation highlighted that Royal Mewa revenue increased more than 6.5 times within one year. Revenue contribution rose from 66.13 lakhs in FY25 (0.35 percent) to 432.96 lakhs in FY26 (1.68 percent). Online channels cited include Amazon, JioMart, and Snapdeal, with products including cashews, Iranian pistachios, and almond.

This part of the story is important not because it changes the FY26 financial profile, but because it shows how the company thinks about value capture. A branded portfolio can support margin stability over time, but it also demands investment in packaging, marketing, and distribution. Management has stated an intent to develop Royal Mewa into an India-led consumer brand targeting 20 percent of revenue over the next 3 to 5 years. For investors, the key is to watch whether the company can scale branded sales without distracting from the core B2B engine that currently funds growth.

What FY26 signals for investors

FY26 looks like a bridge year between a strong operating ramp and a larger capacity-driven phase. The company delivered higher income and profits year-on-year, supported by a kernel-led product mix and improving institutional contribution. At the same time, H2 FY26 margins declined, which is a reminder that cashew processing economics can tighten when raw material costs rise or operating leverage is not yet fully captured.

Balance-sheet metrics indicate strengthening liquidity, with current ratio improving to 2.51 in FY26 from 1.64 in FY25. Debt-to-equity was 0.25 in FY26 versus 0.33 in FY25. ROE and ROCE moderated to 18.22 percent and 21.09 percent, respectively, which the company attributed to higher equity following IPO capital raise.

Management commentary frames the year as a milestone, combining financial growth with the BSE SME listing and a push toward the next expansion. The company’s stated path is clear: scale processing capacity, deepen institutional relationships, build sourcing resilience across Africa, and selectively grow the Royal Mewa brand.

The near-term investor lens should stay focused on three practical checkpoints. First, whether the new capacity comes online on schedule and lifts utilisation and operating leverage. Second, whether institutional share continues to expand while maintaining recurring demand. Third, whether working-capital intensity stays manageable as volumes rise. If execution remains steady, Pajson Agro’s integrated sourcing-processing-distribution model has the ingredients to move from a fast-growing SME processor into a larger, more systematised agri-processing platform.