The quarter's performance reflects a deceleration in the company's recent growth trajectory, with revenue declining sequentially for the first time in three quarters. Net sales of ₹100.81 crores marked a 3.06% decline from Q2 FY26's ₹103.99 crores, though the year-on-year growth of 63.63% underscores the company's substantial expansion compared to the prior year. The profit decline was more pronounced, with profitability margins compressing across multiple metrics as operational efficiencies weakened.
For the nine-month period of FY26 (April-December 2025), the company has delivered consolidated net profit of ₹17.41 crores on revenues of ₹281.95 crores, representing impressive year-on-year growth rates of 116.67% and 59.24% respectively compared to the same period last year. This strong nine-month performance provides context to the quarterly softness, suggesting that Q3's results may represent a temporary pause rather than a fundamental deterioration.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Net Profit (₹ Cr) | QoQ Growth | PAT Margin |
|---|---|---|---|---|---|---|
| Dec'25 | 100.81 | -3.06% | +63.63% | 5.01 | -37.61% | 5.04% |
| Sep'25 | 103.99 | +34.79% | +68.90% | 8.03 | +83.75% | 7.81% |
| Jun'25 | 77.15 | +14.14% | +46.26% | 4.37 | +15.30% | 5.73% |
| Mar'25 | 67.59 | +9.71% | — | 3.79 | +12.46% | 5.59% |
| Dec'24 | 61.61 | +0.06% | — | 3.37 | +39.26% | 5.52% |
| Sep'24 | 61.57 | +16.72% | — | 2.42 | +75.36% | 3.98% |
| Jun'24 | 52.75 | — | — | 1.38 | — | 2.65% |
Financial Performance: Margin Compression Amid Revenue Softness
The third quarter witnessed a concerning compression in profitability metrics despite the company maintaining positive year-on-year growth. Operating profit (PBDIT excluding other income) declined to ₹14.59 crores from ₹16.83 crores in Q2 FY26, with operating margins contracting 171 basis points to 14.47% from 16.18%. This margin erosion suggests rising input costs or competitive pricing pressures that the company could not fully offset.
The profit before tax of ₹5.67 crores represented a sharp 36.17% decline from the previous quarter's ₹8.88 crores, whilst the PAT margin compressed to 5.04% from 7.81% in Q2 FY26. Employee costs increased to ₹12.00 crores from ₹10.90 crores, reflecting a 10.09% sequential rise that outpaced revenue growth. Interest expenses remained elevated at ₹5.73 crores, broadly stable from ₹5.76 crores in the previous quarter, indicating the company's continued reliance on debt financing for its expansion activities.
Depreciation charges increased to ₹4.21 crores from ₹4.06 crores, reflecting the company's ongoing capital expenditure programme to expand manufacturing capacity. The tax rate for the quarter stood at 10.41%, up from 8.67% in Q2 FY26, though still remaining at relatively modest levels. Other income declined to ₹0.89 crores from ₹1.06 crores sequentially, further contributing to the bottom-line pressure.
Operational Challenges: Balancing Growth with Profitability
Sejal Glass faces the classic manufacturing challenge of maintaining profitability whilst scaling operations rapidly. The company's return on equity (ROE) for the latest period stood at an impressive 35.32%, significantly above its five-year average of 16.98%, indicating strong capital efficiency. However, this comes at the cost of elevated leverage, with the company's debt-to-equity ratio at 4.10 times as of H1 FY26, though this represents the lowest level in recent periods.
The return on capital employed (ROCE) for H1 FY26 reached 14.12%, marking the highest level recorded and demonstrating improving operational efficiency. This metric has shown consistent improvement from the five-year average of 7.93%, suggesting that the company's capital-intensive expansion is beginning to generate returns. However, the high debt burden remains a concern, with interest coverage remaining modest as evidenced by the five-year average EBIT-to-interest ratio of -0.31 times.
Leverage Concerns Persist
Sejal Glass operates with substantial financial leverage, with debt-to-EBITDA averaging 10.83 times over the past five years. Whilst the company has demonstrated improving cash generation, with H1 FY26 cash and equivalents reaching ₹8.46 crores (the highest on record), the debt burden of ₹117.19 crores as of March 2025 requires careful monitoring. The company's ability to service this debt depends critically on sustaining revenue growth and improving operating margins.
Working capital management has become more challenging, with the company's cash flow from operations remaining negative at ₹5.00 crores for FY25, primarily due to a ₹33.00 crores increase in working capital requirements. Current assets stood at ₹141.56 crores against current liabilities of ₹104.86 crores as of March 2025, providing a current ratio of approximately 1.35, which offers some comfort on short-term liquidity.
Industry Context: Riding the Infrastructure Wave
The architectural glass industry in India has benefited from robust construction activity and infrastructure development, particularly in commercial and residential segments. Sejal Glass has capitalised on this trend, with its five-year sales compound annual growth rate (CAGR) of 84.98% significantly outpacing industry growth. The company's focus on value-added glass products positions it well in the premium segment, though this also exposes it to cyclical demand patterns.
The company's revenue trajectory shows remarkable acceleration, growing from ₹46.00 crores in FY23 to ₹243.00 crores in FY25, representing a 254.35% increase in just two years. This explosive growth reflects both market share gains and capacity expansion, though the sustainability of such growth rates remains questionable as the company reaches a larger scale.
Growth Trajectory Analysis
Sejal Glass has transformed from a ₹10.00 crore revenue company in FY21 to one generating over ₹280 crores in the first nine months of FY26 alone. This 28-fold increase in five years reflects aggressive capacity expansion and market penetration. However, the sequential revenue decline in Q3 FY26 suggests that the company may be approaching near-term demand constraints or facing heightened competition.
Peer Comparison: Premium Valuation Amid Mixed Fundamentals
Sejal Glass trades at a significant premium to its industrial products peers, with a price-to-earnings ratio of 45.13 times compared to the peer average of approximately 39 times. The company's price-to-book value of 15.94 times substantially exceeds the peer average of around 4.4 times, reflecting market expectations of continued high growth and improving returns.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Div Yield (%) |
|---|---|---|---|---|---|
| Sejal Glass | 45.13 | 15.94 | 16.98 | 3.95 | — |
| Wendt India | 61.24 | 5.51 | 16.68 | -0.28 | 0.58 |
| Tinna Rubber | 25.32 | 4.12 | 22.59 | 0.35 | 0.64 |
| Borosil Scientific | 51.27 | 2.32 | 4.53 | -0.27 | — |
| Vidya Wires | 23.57 | 5.10 | 0.00 | 0.00 | — |
| GRP | 32.92 | 5.00 | 10.59 | 0.99 | 0.85 |
The company's ROE of 16.98% positions it favourably within the peer group, exceeding most comparables and demonstrating superior capital efficiency. However, Sejal Glass carries significantly higher financial leverage than peers, with a debt-to-equity ratio of 3.95 times compared to the peer group average of under 1.0 times. This elevated leverage amplifies both returns and risks, making the company more vulnerable to cyclical downturns or margin pressures.
Unlike most peers, Sejal Glass does not pay dividends, instead reinvesting all profits into growth initiatives. This strategy aligns with the company's aggressive expansion phase but provides no income cushion for investors during periods of stock price volatility. The company's market capitalisation of ₹839.00 crores ranks it sixth among the peer group, reflecting its mid-tier positioning within the industrial products sector.
Valuation Analysis: Expensive Despite Growth Credentials
At the current price of ₹736.05, Sejal Glass trades at valuations that embed substantial growth expectations. The P/E ratio of 45.13 times compares to an industry average of 20 times, implying that investors are pricing in continued robust earnings growth. The price-to-book value of 15.94 times represents a significant premium to both the company's book value of ₹11.84 per share and peer group averages.
The company's enterprise value-to-EBITDA multiple of 23.29 times and EV-to-sales ratio of 3.55 times further underscore the premium valuation. Whilst the PEG ratio of 0.19 suggests that the valuation may be justified by growth prospects, this metric should be viewed cautiously given the company's elevated debt levels and recent margin pressures. The stock's valuation grade has been classified as "Expensive" since May 2025, having previously oscillated between "Very Expensive" and "Expensive" categories.
The stock has experienced significant volatility, trading in a 52-week range of ₹321.10 to ₹1,037.80. At the current price, the stock sits 29.08% below its 52-week high, suggesting some correction from peak valuations. However, it remains 129.23% above its 52-week low, indicating substantial appreciation over the past year. This volatility, with annualised standard deviation of 56.08%, classifies Sejal Glass as a high-risk, high-return investment.
Shareholding Pattern: Stable Promoter Base with Limited Institutional Interest
The shareholding structure of Sejal Glass has remained remarkably stable over recent quarters, with promoters maintaining a consistent 75.00% stake across the last five quarters. This unwavering promoter commitment provides confidence in the company's long-term prospects, though the lack of stake reduction also means promoters have not capitalised on recent share price appreciation to reduce leverage or diversify holdings.
| Quarter | Promoter | FII | MF | Insurance | Other DII | Non-Inst |
|---|---|---|---|---|---|---|
| Dec'25 | 75.00% | 0.21% | 0.00% | 0.00% | 0.46% | 24.33% |
| Sep'25 | 75.00% | 0.21% | 0.00% | 0.00% | 0.47% | 24.32% |
| Jun'25 | 75.00% | 0.21% | 0.00% | 0.00% | 0.47% | 24.32% |
| Mar'25 | 75.00% | 0.21% | 0.00% | 0.00% | 0.47% | 24.32% |
| Dec'24 | 75.00% | 0.21% | 0.00% | 0.00% | 0.40% | 24.38% |
Institutional participation remains minimal, with foreign institutional investors holding just 0.21%, mutual funds at 0.00%, and other domestic institutional investors at 0.46%. The total institutional holding of 0.67% represents one of the lowest levels among listed industrial companies, suggesting that large institutional investors remain cautious about the company's leverage profile and relatively small market capitalisation.
Non-institutional investors hold 24.33% of the equity, with minor sequential changes over recent quarters. The promoter group is led by Trushti Enterprises LLP with 32.18%, followed by Chandrakant Vallabhaji Gogri at 25.00% and Jaya Chandrakant Gogri at 16.34%. Negligible promoter pledging at 0.16% provides comfort that the controlling shareholders are not under financial stress, though this also means they have limited ability to raise additional capital through pledge-based financing.
Stock Performance: Exceptional Long-Term Returns Despite Recent Volatility
Sejal Glass has delivered exceptional returns to long-term shareholders, with the stock appreciating 66.00% over the past year, significantly outperforming the Sensex return of 8.33% by 57.67 percentage points. The two-year return of 145.27% and three-year return of 169.62% further underscore the stock's strong performance trajectory, though recent months have seen increased volatility and correction from peak levels.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +11.40% | +2.14% | +9.26% |
| 1 Month | -13.91% | -2.51% | -11.40% |
| 3 Months | -17.05% | -0.44% | -16.61% |
| 6 Months | +45.75% | +3.74% | +42.01% |
| YTD | -17.09% | -1.89% | -15.20% |
| 1 Year | +66.00% | +8.33% | +57.67% |
| 2 Years | +145.27% | +15.99% | +129.28% |
| 3 Years | +169.62% | +37.43% | +132.19% |
However, recent performance has been challenging, with the stock declining 13.91% over the past month and 17.05% over three months, significantly underperforming the broader market. The year-to-date decline of 17.09% reflects profit-booking following the sharp run-up in 2025, as well as concerns about the sequential slowdown in quarterly results. The stock's beta of 1.11 indicates higher volatility than the market, consistent with its small-cap nature and leveraged business model.
The stock trades below all key moving averages, including the 5-day (₹715.61), 20-day (₹754.08), 50-day (₹834.43), and 100-day (₹817.99) averages, suggesting near-term technical weakness. The 200-day moving average of ₹650.04 provides a long-term support level, though the stock has retraced significantly from its 52-week high of ₹1,037.80 reached in recent months.
Investment Thesis: Growth Story Faces Near-Term Headwinds
Sejal Glass presents a compelling long-term growth narrative built on India's infrastructure and construction boom, but faces near-term challenges related to margin pressures and elevated leverage. The company's transformation from a ₹46.00 crore revenue business in FY23 to one generating over ₹280 crores in the first nine months of FY26 demonstrates exceptional execution and market opportunity capture.
The proprietary Mojo Score of 63 out of 100 reflects a "HOLD" rating, balancing the company's impressive growth trajectory against concerns about valuation, leverage, and recent margin compression. The score improvement from 56 in July 2025 acknowledges the strong nine-month performance, though the expensive valuation and below-average quality grade limit upside potential at current levels.
Key Strengths & Risk Factors
KEY STRENGTHS
- Exceptional revenue growth trajectory with 84.98% five-year CAGR demonstrating strong market position
- Improving return metrics with ROE of 35.32% and ROCE of 14.12% in recent periods
- Strong promoter holding of 75.00% with negligible pledging indicating confidence
- Robust year-on-year growth of 63.63% in Q3 FY26 revenue and 48.66% in profit
- Nine-month FY26 performance showing 116.67% profit growth demonstrates underlying strength
- Positioned to benefit from India's infrastructure and construction boom
- Improving working capital management with cash position reaching ₹8.46 crores in H1 FY26
KEY CONCERNS
- High financial leverage with debt-to-equity of 4.10 times and debt of ₹117.19 crores
- Sequential revenue decline of 3.06% and profit drop of 37.61% in Q3 FY26 signals momentum loss
- Margin compression with PAT margin falling to 5.04% from 7.81% quarter-on-quarter
- Negative operating cash flow of ₹5.00 crores in FY25 raises sustainability concerns
- Expensive valuation with P/E of 45.13x and P/BV of 15.94x limiting margin of safety
- Minimal institutional participation at 0.67% suggests limited professional investor confidence
- High volatility with 56.08% annualised standard deviation and beta of 1.11
Outlook: What to Watch
POSITIVE CATALYSTS
- Recovery in sequential revenue growth in Q4 FY26
- Margin expansion back towards 7-8% PAT margin levels
- Sustained strong year-on-year growth momentum
- Improvement in operating cash flows and working capital efficiency
- Debt reduction or stabilisation of leverage ratios
RED FLAGS
- Further sequential revenue or profit declines in upcoming quarters
- Continued margin compression below 5% PAT margin
- Deterioration in working capital or cash flow generation
- Increase in debt levels or interest burden
- Stock breaking below 200-day moving average of ₹650
The Verdict: Hold for Existing Investors, Wait for Better Entry for Fresh Investors
Score: 63/100
For Fresh Investors: Avoid initiating positions at current levels. The expensive valuation (P/E 45.13x, P/BV 15.94x) combined with sequential growth deceleration and margin pressures suggests limited upside and elevated downside risk. Consider accumulating only on significant corrections towards ₹550-600 levels, which would offer better risk-reward.
For Existing Holders: Continue holding with a medium-term perspective. The strong nine-month performance and robust year-on-year growth provide confidence in the underlying business momentum. However, closely monitor Q4 FY26 results for signs of margin recovery and sequential growth resumption. Consider partial profit-booking if the stock approaches ₹850-900 levels.
Fair Value Estimate: ₹650-700 (11.71% downside to 4.88% downside from current levels)
The investment case rests on the company's ability to sustain high growth whilst improving margins and managing leverage. The Q3 FY26 results represent a cautionary signal that warrants careful monitoring, though they do not fundamentally alter the long-term growth thesis. Investors should demand evidence of operational improvement before committing fresh capital at current premium valuations.
Note— ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Investments in equity shares involve risks, including the potential loss of principal.
