Sunrakshakk's Guwahati plant ran at half capacity. Management had guided 85%.
The FMCG contract manufacturer missed its Q4 capacity ramp target by a wide margin, yet still claims a ₹1,000 cr FY28 revenue goal.
What's new
- Q4 FY26 revenue was ₹197.59 cr, up 92% year-on-year and 20% sequentially.
- FY26 revenue hit ₹607.75 cr, up 237% year-on-year, with FMCG crossing the ₹500 cr milestone.
- The Guwahati facility, commissioned in January 2026, is running at 45-55% capacity utilization in both soap noodles and cosmetics.
Themes from the call
Execution gap
The Guwahati ramp is far below the 85% target management set four months ago, creating a gap between guided and actual operational scale.
Margin pressure
FY26 EBITDA margin fell to 9.66% from 14.24% in FY25 due to a product-mix shift toward lower-margin categories; Q4 showed sequential improvement.
Capital allocation
Preferential issue proceeds are deployed in Guwahati and the edible business, with no major new capex planned to reach the ₹1,000 cr FY28 target.
Guidance watch
- Management reiterated a medium-term target of ₹1,000 cr in revenue by FY28, calling it an 'important milestone'.
- PAT margin target for FY27 is 7%, up from 6.12% in Q4 FY26, driven by absorption of fixed costs across existing facilities.
- Edible business is targeted to grow 20% annually.
Risk flags
- The 45-55% utilization at Guwahati versus the 85% guidance erodes credibility on operational ramp forecasts.
- YoY margin compression from product mix is described as temporary, but the trajectory shows it hasn't reversed yet.
- The ₹1,000 cr FY28 goal relies on 10-15% organic growth from an annualized Q4 base of ₹800 cr, a path that looks thin given the Guwahati miss.
Key quotes
-
"And by end of the quarter we are expecting almost more than 85% of the capacity utilization."
— Sunrakshakk management, Feb 2026 call -
"In our Guwahati unit, we are utilizing approximately 45-50% of our capacity in the cosmetics segment. For the soap noodle capacity we built there, we are also in the same range of 45-55%."
— Saurav Chhabra, Jun 2026 call
The brief
Sunrakshakk's contract manufacturing business is scaling fast. Revenue jumped 92% in Q4 and the company crossed the ₹500 cr FMCG milestone for the year. But the quarter's central fact is a missed target that management hasn't explained. Four months ago, CEO Saurav Chhabra projected FMCG capacity utilization would top 85% by end of Q4. The new Guwahati facility, the centerpiece of the capacity expansion, finished the quarter at 45-55%. The gap between 85% and 45% is not a rounding error. It's a miss that calls into question the ramp assumptions behind the ₹1,000 cr FY28 revenue goal. Chhabra framed that target as an 'important milestone,' achievable through 10-15% organic growth from an annualized Q4 base of about ₹800 cr. The math works if Guwahati and the other facilities absorb fixed costs and customer volumes scale. But the current run-rate from Guwahati suggests it's contributing less than half of what was planned. Profitability is moving in the right direction sequentially. PAT margin improved to 6.12% in Q4 from 5.74% in Q3, and management is targeting 7% for FY27. Year-on-year, the picture is different. EBITDA margin fell to 9.66% from 14.24% in FY25, a consequence of the product mix shifting toward higher-revenue, lower-margin categories. Management says this is temporary. The Guwahati miss makes that assurance harder to take at face value. The business has real foundations. Sunrakshakk serves over 200 customers including ITC, Godrej, and Patanjali. The FMCG intermediates business is 85% external sales. The edible segment is targeted to grow 20% annually. The question is whether management's operational forecasts are reliable enough to underwrite the next phase of growth. The Guwahati data says wait.
Sunrakshakk's top line is growing, but the Guwahati miss undermines the forecasts the ₹1,000 cr target depends on.