Huhtamaki India Q2 FY26 Earnings Call — Analysis (NSE: HUHTAMAKI)
Huhtamaki India reports robust Q2CY26 with 23% net sales growth and 55% EBITDA jump, delivering best-ever quarterly EPS.
The take
Q2FY26 Net sales ₹723 Cr ( +23.1% YoY ) . New guidance — huhtamaki india volume growth in line with the market (4–5%) . New story: Selective profitable growth strategy .
Results
Net sales ₹723 Cr +23.1% YoY; EBITDA margin 10.5% (+220bps); EBIT margin 8.5% (+72% growth in EBIT); PBT up 77% YoY; EPS growth 77.3% YoY.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Net sales | ₹723 Cr | +23.1% | yoy · Q2FY26 · vs Q2FY25 |
| EBITDA margin | 10.5% | +220 bps | yoy · Q2FY26 · from 8.3% in Q2FY25 |
| EBIT margin | 8.5% | +72% (EBIT value growth) | yoy · Q2FY26 · EBIT growth figure; prior year EBIT margin not explicitly given |
| Earnings per share growth | 77.3% | +77.3% | yoy · Q2FY26 |
| Cash & liquid investments | ₹395 Cr | point_in_time · Q2FY26 · ₹270 Cr cash + ₹125 Cr liquid MF as of Jun-26 | |
| Net debt | nil | point_in_time · Q2FY26 · as of Jun-26; gross debt stable |
Guidance
Management aims to grow volumes broadly in line with market (4-5%) but cautions against extrapolating the 23% revenue growth rate.
What management committed to
- Target volume growth in line with the market, which management estimated at 4–5% — in line with the market (4–5%)
- Sufficient capacity exists to meet future volume growth for at least the next couple of years without major capex, driven by productivity improvements — no major capex needed, FY28
- Solar captive generation power plant at Khopoli will be operational in Q3CY26 (this quarter), supplying approximately 50% of the plant’s power — online in Q3, 50% of power, Q3FY26
Key themes
Margin expansion, selective growth strategy, supply-chain resilience
How the narrative shifted
- Selective profitable growth strategy: Management insists volume growth is now aligned with profitable product–customer mix after earlier consolidation, and this is the structural driver behind expanding margins.
- Middle East crisis and raw material volatility: The supply-chain disruption caused by the geopolitical crisis led to raw material cost spikes, but Huhtamaki managed to pass through most of the cost via pricing and transparent contracts.
- Customer consolidation around reliable suppliers: Larger customers are valuing Huhtamaki’s reliability, contingency support and raw material security, which is driving wallet-share gains and insulating volumes.
- Productivity-led capacity headroom: Continuous productivity improvements are freeing up capacity; management sees no need for near-term capex to support growth, keeping capital discipline intact.
- Sustainability as a commercial enabler: Blueloop and renewable energy projects are positioned as differentiators, though adoption is slow; management is not pressuring short-term returns and uses assets for conventional products.
- Macro growth backdrop supports packaging demand: The domestic packaging market is growing at 4–5%, and Huhtamaki expects to grow at least in line with that rate, with no structural headwinds cited.
Operational commentary
- Broad-based volume growth in high single digits, almost equal across domestic and exports; no sacrifice of profitable growth principle
- Raw material cost pass-through largely successful despite Middle East supply-chain disruption; transparent indexing and extraordinary escalations managed with customers
- Customer inventory buildup observed due to crisis; magnitude unknown but could normalise; festive season provides near-term support
- Productivity improvements sufficient to absorb current growth; no capacity constraint expected for at least a couple of years
- Blueloop adoption still below 30% of sales, but same assets used for other products at >70% utilisation; no near-term ROI concern
- Home care and beverage categories driving volume, aligned with selective high-margin product strategy
- New solar captive generation plant at Khopoli to be commissioned in Q3CY26, supplying ~50% of plant’s power
- Taloja plant implemented mechanical vapour recompression for zero liquid discharge; ongoing water recycling and rainwater harvesting
Analyst Q&A
Q. Is the current ~10% EBITDA margin sustainable?
I can't answer whether it's going to be 10%, 15% or 8% next quarter because there are always external factors working for or against us. We are quite committed to our strategy of profitable growth.
Q. What portion of the volume growth was due to customer inventory buildup?
We feel there is some part of that, but it's very hard for us to estimate. I think we will be more clear in quarter 3 when we understand how much inventory is there.
Q. Can you give specifics on land monetisation beyond Daman?
We would not disclose that on this call. You will see whatever we do in our annual disclosures.
Q. Any plans to bring the unlisted Huhtamaki Food Services Packaging under the listed entity or any inorganic acquisition?
We don't have any specific disclosures right now with respect to nonorganic growth. We are focused on organic growth through modernisation and capex. We keep evaluating opportunities but have nothing to announce.
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