Srigee DLM Ltd Q1 FY27 Earnings Analysis

- FY27 revenue target: INR 100 crores (personal target of management). - FY28 revenue target: INR 200 to 250 crores aspiration. - New R11A facility expansion with INR 50 crores capex aims to reach INR 350 crores peak revenue, potentially by FY29. - Management expects continued growth beyond INR 350 crores aiming for INR 1,000 crores eventually. - Current capacity fully utilized; new facility to provide 4x space enabling customer addition and volume growth. - ODM opportunities expanding in new product segments like hand blenders, home appliances, juicer-mixer-grinders, alongside coolers and mobile phone assembly. - Polymer compounding and tool room segments expected to contribute significantly to future growth. - Margin improvement planned through enhanced in-house processes and operational efficiencies. - New customers in pipeline, but onboarding dependent on new facility readiness (target August 15 commissioning).

- FY27 revenue target: INR 100 crores; FY28 target: INR 200 crores, with potential to reach INR 350 crores via new R11 facility by FY29 (Pg. 15). - Plans to expand vertically and horizontally at R11 facility, aiming eventually for INR 1,000 crores turnover (Pg.15). - Expansion driven by increased manufacturing capacity, stronger ODM capabilities, and new customer additions post facility move (Pg. 4, 7, 14). - PAT more than doubled in H2 FY26; management confident of sustained growth and improved profit margins with new plant (Pg. 6-7). - Margin improvement expected via in-house polymer extrusion and tool room, and operational consolidation by selling smaller plants (Pg. 11-12). - Overall, management projects steady profit growth alongside revenue expansion, leveraging increased capacity and margin enhancements (Pg. 6-7, 11).

- A new manufacturing facility (R11A) is under construction on a 10,850 sq.m plot, targeting commissioning by August 15, 2026, with expectations to significantly expand capacity and revenue. - Planned capex for this new plant is around INR 50 crores (including land), financed via a mix of INR 17 crores equity from IPO proceeds, debt, and asset sales of smaller plants. - The new facility aims for peak revenue potential of at least INR 350 crores, conservatively projected by FY29, with scope for vertical expansion (up to FAR 4) allowing future growth beyond INR 1,000 crores turnover. - Current capex use: 50% of IPO funds utilized by March 31, 2026; balance to be spent by Q2 FY27. - Additional INR 25 crores capex related to plant expansion expected by March 2027. - Strategic investment in backward integration: in-house polymer compounding segment targeting 3x expansion in capacity (from 50 to 150 MT/month) upon relocation to new facility. - Smaller existing units to be sold to consolidate manufacturing at larger plant for operational efficiency and margin improvement.

- The company plans to fund the new capex of around INR50 crores through a combination of equity and debt. - Out of the INR50 crores, about INR17 crores is equity raised from the IPO. - The remaining INR33 crores will be raised through debt and sale of smaller plant assets. - The company is in talks with ICICI Bank for debt funding approximately equal to or higher than the IPO equity, potentially by the end of June 2026. - The target interest rate on debt is between 8% and 9%, with ongoing negotiations to reduce it closer to 8.25%. - This debt and equity funding will primarily support construction and commissioning of the new larger manufacturing facility (R11A). - Management plans a phased approach in capex and expansion, with scope for vertical expansion beyond the initial building. - The intent is to expand revenue substantially, targeting INR350 crores by FY29 and aiming for INR1000 crores long-term.

- Current capacity is fully utilized, limiting the ability to add new customers or orders. - Management is in talks with three new customers (two have visited the site), expected to add business after audit clearance. - Existing clients contribute about 91% of revenue, reduced from 95%, with active efforts on customer diversification. - Space constraints are a key bottleneck; new larger facility (10,850 sq meters) under construction will enable orderbook expansion. - Planned commissioning of new facility by August 15, 2026 (may slip but before Diwali), expected to unlock capacity. - Sales targets: INR 100 crores in FY27, INR 200 crores in FY28, with further scaling possible beyond. - New facility expected to support peak revenues of INR 350 crores. - Management optimistic about adding new customers once operational capacity is increased.