Knack Packaging Q1 FY26 Results (NSE: KNACK)
Signal: Margin expansion
The read
The key inflection is acceleration with operating leverage: consolidated revenue grew +41.1% YoY, EBITDA grew +53.1% and margin expanded 178bps to 22.5%; however, the newly established joint venture's ₹34.45 million loss is already a material drag on group earnings and requires monitoring.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹262.46 Cr | +41.1% | +22.5% |
| EBIT | ₹49.31 Cr | +55.5% | |
| Net profit | ₹30.53 Cr | +47.9% | |
| EPS | ₹3.05 | +48.1% | |
| EBIT margin | 22.5% |
P&L walk
Consolidated revenue increased to ₹2,624.59 million, +41.1% YoY and +22.5% QoQ, while EBITDA rose +53.1% YoY to ₹591.73 million and margin expanded 178bps to 22.5%; finance costs grew only 4.2%, but the ₹34.45 million joint-venture loss reduced PAT growth to +47.9%.
Segments
No operating segment table is disclosed; standalone PAT of ₹315.06 million exceeded consolidated PAT of ₹305.28 million because the joint venture contributed a ₹34.45 million loss, partly offset by the subsidiary's ₹25.38 million profit.
Key positives
- Consolidated revenue reached ₹2,624.59 million, +41.1% YoY and +22.5% QoQ, accelerating from ₹1,860.12 million in Q1FY25 and ₹2,142.70 million in Q4FY26.
- EBITDA rose +53.1% YoY to ₹591.73 million versus revenue growth of +41.1%, a +12.0pp gap, with EBITDA margin expanding 178bps to 22.5%.
- Depreciation grew 42.3% YoY and finance costs only 4.2% YoY, both below EBITDA growth; this supported the 55.5% YoY increase in EBIT to ₹493.13 million.
- EPS of ₹3.05 grew 48.1% YoY, broadly matching the 47.9% PAT growth and showing no material PAT-to-EPS divergence.
Key concerns
- The joint venture recorded a ₹34.45 million loss in Q1FY26 versus a ₹0.19 million loss in the preceding quarter, reducing consolidated PAT to ₹305.28 million from standalone PAT of ₹315.06 million.
- Cost of materials consumed increased to 69.3% of consolidated revenue from 61.5% YoY even as gross margin expanded only 80bps to 42.1%; the filing does not explain the input-cost or mix dynamics.
- The quarter's consolidated and standalone comparatives for Q1FY25 and Q4FY26 were management-compiled and had not been subjected to limited review because the company was not listed during those periods.
Research and educational content only. Not investment advice.