Huhtamaki India Q3CY26 Results (NSE: HUHTAMAKI)
Signal: Margin pressure
The read
The trajectory split in Q3: revenue accelerated to 23.1% YoY on volume and pass-through, but raw-material costs rose 33.0% YoY versus 23.1% revenue growth, compressing gross margin by 270bps; underlying EPS before exceptional items was stable at ₹4.89 versus ₹4.87, while the reported ₹3.94 EPS was hit by restructuring.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹768.84 Cr | +23.1% | +2.5% |
| EBIT | ₹49.03 Cr | -0.3% | |
| Net profit | ₹29.73 Cr | -19.1% | |
| EPS | ₹3.94 | -19.1% | |
| EBIT margin | 6.4% |
P&L walk
Standalone revenue rose 23.1% YoY to ₹7,688.4 million, but gross margin and EBITDA margin contracted as raw-material costs grew faster than revenue; EBIT was broadly flat before a ₹96.0 million restructuring charge drove PAT down 19.1% to ₹297.3 million.
Segments
The single Consumer Packaging segment generated ₹7,688.4 million revenue and ₹456.4 million result before exceptional items; the ₹96.0 million restructuring charge was entirely within this segment and reduced its after-exceptional result to ₹360.4 million.
Key positives
- Revenue from operations reached ₹7,688.4 million, up 23.1% YoY, with management attributing growth to volume gains and pass-through of material-cost increases.
- Nine-month EBIT before exceptional items rose 22.0% YoY to ₹1,528.0 million, supported by higher volumes, product mix and operational-efficiency initiatives.
- Underlying EPS before exceptional items was ₹4.89 versus ₹4.87 YoY, showing reported PAT pressure was largely exceptional rather than an equivalent deterioration in underlying earnings.
Key concerns
- Gross margin compressed 270bps YoY to 31.2% as raw-material cost rose to 71.4% of revenue from 66.0%, indicating incomplete or delayed cost recovery despite stated pass-through.
- Q3 EBITDA grew only about 1.0% YoY while revenue grew 23.1%, and EBITDA margin fell 178bps to 8.1%, reversing the margin expansion seen in the prior results series.
- A ₹96.0 million exceptional charge for accelerated depreciation and employee settlement costs reduced Q3 PAT 19.1% YoY to ₹297.3 million and reflects an ongoing facility-consolidation program.
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