This article first appeared on GuruFocus .
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Revenue:Rs. 526.7 crore for Q1 FY27.
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Gross Margin:52.4%, reflecting sequential margin improvement.
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EBITDA:Rs. 117.1 crore, with an EBITDA margin of 22.2%.
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Profit After Tax (PAT):Rs. 73.4 crore, with a PAT margin of 13.9%.
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Revenue Mix - Consumerware:Contributed 63.6% of total revenue, with a gross margin of 55%.
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Revenue Mix - Writing Instruments:Contributed 21.2% of total revenue, with a gross margin of 53.8% and 52% year-on-year growth.
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Revenue Mix - Molded Furniture and Allied Products:Contributed 15.2% of total revenue, with a gross margin of 39.5%.
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Channel Mix - General Trade:Contributed 71.1% of total sales.
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Channel Mix - Online:Contribution increased to 16.3% from 10.4% in Q1 FY26.
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Channel Mix - Export:Accounted for 7.3% of sales.
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Channel Mix - Modern Trade:Contributed 5.3% of sales.
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Release Date: August 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Cello World Ltd ( NSE:CELLO ) reported a 52% year-on-year growth in its writing instruments division, driven by the CELO brand.
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Gross margin improved sequentially to 52.4%, supported by price increases implemented across most product categories.
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E-commerce channel contribution rose significantly to 16.3% of total revenues from 10.4% in Q1 FY26, with healthy profitability.
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The company has commenced in-house manufacturing of steel bottles at its Rajasthan facility, with eight operational lines expected to ramp up over the next few quarters.
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Channel inventory levels have normalized, with secondary sales improving, positioning the company for better momentum in upcoming quarters.
Negative Points
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Consumer demand remained subdued due to inflationary pressures and macroeconomic uncertainties, impacting the consumerware segment.
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Steel bottle sales were not comparable to the prior year due to a lack of imported inventory, with only 20-25 SKUs available versus the previous 150.
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Glassware capacity utilization remained at 60%, with scale-up slower than anticipated due to continued dumping from China.
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Export demand weakened across most products during the quarter.
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Input costs, including polymer and gas prices, rose significantly (gas up ~80% from March), leading to price hikes of 7-20% that temporarily impacted volumes.
Q & A Highlights
Q: What is the current status of the in-house manufacturing of steel bottles, and when can we expect the sales lost due to the non-availability of imported inventory to be fully recovered? A: Gaurav Pradeep Rathod, Joint Managing Director, stated that the company is ramping up production at its Rajasthan facility with eight lines operational. However, the product range is currently limited to about 20-25 SKUs compared to the 150 SKUs available during peak imports. The company plans to expand this to 50-55 SKUs over the next couple of quarters, and it will take another two quarters to see the full impact of regaining the lost sales.
Q: Can you provide an update on the glassware business, including capacity utilization and the impact of Chinese dumping? A: Gaurav Pradeep Rathod noted that capacity utilization remains at about 60% due to the continued dumping from China, which has slowed the scale-up. However, sales from the plant have increased by 30-35% year-on-year in Q1 FY27. He added that at another 10-15% utilization, the plant will reach healthy profitability, and the company stands by its investment decision.
Q: What was the extent of the price hikes taken across product categories, and have they been absorbed by the market? A: Gaurav Pradeep Rathod explained that price increases ranged from 7% to 20% across different product lines, with an overall average of about 12-13% at the company level. He acknowledged that these hikes, driven by significant input cost inflation, initially impacted volumes but have now been absorbed by the market.
Q: What is the outlook for the molded furniture and alloy products business, which has seen a decline in recent quarters? A: Gaurav Pradeep Rathod clarified that the molded furniture segment is not expected to be a revenue driver, as it is a heavily crowded market. The company's focus is on preserving current revenue and profitability. He noted that the quarterly fluctuations are normal due to the timing of institutional sales, and the company expects to maintain its top-line rather than see a declining trend.
Q: What is the steady-state margin expectation for the writing instruments segment following the Cello acquisition? A: Gaurav Pradeep Rathod stated that the gross margin contraction is transitionary due to the rationalization of unprofitable products in the Cello portfolio. As newer products are introduced and the portfolio is realigned, the company expects margins to reach similar levels to the Unomax brand within the next couple of quarters.
Q: What is the peak revenue potential for the glassware and steelware facilities? A: Gaurav Pradeep Rathod revealed that at peak utilization, the glassware plant could generate revenue of about Rs. 250-275 crore, while the steelware plant with its current eight lines could reach about Rs. 300 crore. He added that the steel plant is a brownfield project, and additional lines will be added over time.
Q: How is the company planning to utilize its cash balance given the limited CapEx plans? A: Gaurav Pradeep Rathod stated that the company continues to look for inorganic opportunities and is preserving cash for that purpose. He emphasized that the company prefers to deploy cash into newer businesses for growth rather than ineffective uses like buybacks.
Q: What is the current status of the merger with Vimplast, and when will shares be credited to investors? A: Atul Parolia, CFO, confirmed that the share allotment process has not been completed due to some technical glitches. He assured that the process will be completed within a few weeks.
Q: What is the company's marketing spend, and how is it positioning its brands in the consumerware segment? A: Gaurav Pradeep Rathod stated that advertising and marketing costs remain at about 2.5-3% of overall revenues. He emphasized a focus on in-shop and ground-level marketing, which is more effective and cheaper than above-the-line marketing, along with an increased focus on digital marketing.
Q: How has the demand environment been in July, and what is the current channel inventory level? A: Gaurav Pradeep Rathod noted that channel inventory correction has happened, with primary sales dropping but secondary sales improving. He stated that channel partners are now at a comfortable inventory position, which should help improve momentum in the coming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
