Vidhi FY26: Flat revenue, sharper margins, and a bigger push beyond food colours

/n# Vidhi FY26: Flat revenue, sharper margins, and a bigger push beyond food colours

Vidhi Specialty Food Ingredients Limited ended FY26 with an unusual mix of signals. Revenue from operations was broadly unchanged at INR 380.0 crores versus INR 382.3 crores in FY25. But profitability moved up meaningfully. EBITDA rose to INR 78.0 crores from INR 68.5 crores, and PAT increased to INR 49.0 crores from INR 43.4 crores. The year therefore read less like a demand-led growth story and more like a margin and mix story.

The management framed FY26 as a transition year. In its commentary, it highlighted a challenging global environment marked by tariffs, supply chain disruptions, inflationary pressures and geopolitical uncertainty. Yet it also pointed to converging growth engines: capacity additions, export-led growth, a shift towards specialty products, and expansion beyond food into adjacent sectors. The company also chose not to declare a final dividend for FY26, stating that reserves would be allocated towards expansion activity in the coming years.

FY26 performance: stable sales, stronger operating leverage

On a consolidated basis, gross profit increased to INR 163.7 crores in FY26 from INR 144.6 crores in FY25. Gross margin expanded to 43.1% from 37.8%. EBITDA margin improved to 20.5% from 17.9%, reflecting better realizations and cost management, as well as a higher contribution from manufactured products.

Q4 FY26 showed a stronger run-rate. Revenue from operations was INR 122.7 crores in Q4 FY26, up 12% year-on-year. EBITDA was INR 20.6 crores, up 3.3%, and PAT was INR 13.1 crores, up 10.5%. However, the quarterly margin was softer, with Q4 EBITDA margin at 16.8% versus 18.2% in Q4 FY25.

Mix matters: manufacturing vs trading

The investor presentation provides a clean split between manufacturing and trading.

For FY26, manufacturing sales were INR 330.2 crores and trading was INR 49.8 crores. In Q4 FY26, manufacturing sales were INR 96.8 crores and trading was INR 25.9 crores.

This split is important because management explicitly discussed margin differences between the two. On the earnings call, it stated that the company’s manufactured-sales EBITDA margin was close to 24% to 25%, while consolidated margins reflect the blending effect of trading. The Dahej plant slide in the deck also repeats this strategic intent in simpler terms: low-margin trading revenue is expected to be substituted with higher-margin manufactured products, which should improve the margin profile.

Capacity and growth projects: what is visible today

Vidhi’s core operations sit in a regulated and compliance-heavy category. The company repeatedly emphasized high entry barriers, including stringent regulations, batch-level certifications and long customer approval cycles. It also highlighted audits and approvals such as US FDA, BIS and multiple ISO and food safety certifications.

On the capacity front, the company highlighted Dahej SEZ Plant Phase I, where commercial production commenced on December 12, 2023, following trial production on August 27, 2023. The deck states an investment of INR 70 crores funded through internal accruals and notes that total installed capacity increased by 350 TPM, taking total to 675 TPM.

The company also laid out two additional projects for the next leg of growth:

1. Roha (Arjun Foods subsidiary) for pharma and healthcare applications. Planned capacity is 200 MT per month in two phases. The update in the deck is that the pilot plant is ready and the product is in sampling stage with marquee companies.

2. A new Dahej project targeting applications beyond food, spanning cosmetics and personal care, plastics, paints and coatings, printing inks, packaging, textiles, construction materials and more. Planned capacity is 300 MT per month in two phases. The update is that the pilot plant is ready and sampling is expected to begin soon.

CoatIcon: a strategic shift toward application-led solutions

The most prominent new business mentioned in both the deck and the call is CoatIcon, which Vidhi positioned as tablet coating systems. The management called it a strategic milestone and tied it to a broader shift from being product-focused to becoming innovation-led and solution-oriented.

In the concall, management said CoatIcon is in aggressive sampling and customer qualification stages with several pharmaceutical companies in India and international markets. While it did not disclose commercial revenues from this vertical, it discussed timelines and investments.

One investor asked for capex and commissioning visibility across new projects. Management responded that most of the capex would be spent in FY27, commissioning would take about 18 months, and that this points to the middle of FY27-28 for commissioning.

Later in the call, management stated it would invest about INR 75 crores to INR 85 crores for capex for the project taking off at Dahej, and it hoped in the first phase to achieve about INR 125 crores to INR 150 crores of sales at capex.

Geography and concentration: export strength with dependence risks

The deck shows that Vidhi’s footprint is meaningfully global. It exports to more than 80 countries across continents. Region-wise, FY26 sales were split as follows: Americas 44%, Australasia 29%, Europe 19%, Africa 6% and Middle East 2%. For Q4 FY26, Americas were 49%, Australasia 27%, Europe 18%, Africa 6% and Middle East 0%.

In the concall, management clarified that the North American share includes Mexico, Canada and the U.S. It also said exports to the U.S. are about 19% including Canada.

The concentration disclosure in the deck is direct and high: top 10 countries contributed about 72.69% of revenues in Q4 and 74.24% in FY26. Top 10 customers contributed about 56.98% of revenues in Q4 and 56.92% in FY26.

Management also discussed the impact of tariffs and geopolitical disruptions on customer inventory behaviour. It stated that customer inventory levels had reduced by about 50% during the period when tariffs were applicable, as customers tried to sell from their warehouses and wait for clarity.

Balance sheet and cash flows: stable equity, tighter cash

As of March 2026, total equity was INR 327.8 crores versus INR 301.1 crores in March 2025. Borrowings under current liabilities were INR 56.5 crores versus INR 64.1 crores.

On working capital, trade receivables increased to INR 143.0 crores from INR 128.6 crores, and inventories increased to INR 80.8 crores from INR 74.9 crores. Cash and cash equivalents declined to INR 11.5 crores from INR 19.8 crores.

The cash flow statement showed a turnaround in operating cash flow. Net cash from operating activities was INR 42.4 crores in FY26 versus negative INR 4.6 crores in FY25. Investing cash flow was negative INR 15.5 crores and financing cash flow was negative INR 35.2 crores in FY26.

What to track from here

Vidhi’s FY26 performance points to improving fundamentals in margin and profitability, even in a year where headline revenue was flat. The company is also making a clear strategic push toward value-added, application-driven products, highlighted by CoatIcon and the stated expansions at Roha and Dahej.

But the key questions are execution and timing. Management has shared high-level timelines, including an 18-month commissioning window for the capex it discussed. It also highlighted that high-margin product contribution is around 5% currently and expected to rise to 10% to 12% in FY27, subject to customer approvals.

Export dependence remains a strength, but concentration across top customers and top countries is high, and management’s own commentary indicates that tariffs and geopolitical shocks can influence customer inventory and demand.

For investors, FY27 becomes a year to watch for two things: utilization at the expanded manufacturing base, and visible traction in new verticals as sampling and approvals convert into recurring orders.