Chatha Foods Delivers FY26 Growth Amid Capacity Expansion Plans

FY26 Revenue: ₹1,657 Mn
FY26 PAT: ₹64 Mn

Reader Takeaway: Revenue growth and margin improvement are positive, but customer concentration remains a key concern alongside expansion execution.

What just happened

Chatha Foods reported its financial results for the fiscal year 2026. The company achieved an annual revenue of ₹1,657 Mn, marking a 5.4% increase compared to the previous fiscal year. For the second half of FY26, revenue was ₹817 Mn, a slight 2.0% decrease from H2FY25's ₹833 Mn. However, profitability saw significant improvements in H2FY26, with EBITDA rising by 10.7% to ₹65 Mn and Profit After Tax (PAT) increasing by 22.6% to ₹35 Mn.

Why this matters

The results indicate operational efficiency gains, as evidenced by improved margins despite a revenue dip in the second half. The company's EBITDA margin for FY26 stood at 7.4%, up from 7.2% in FY25, and in H2FY26, it improved to 8.0% from 7.1% in H2FY25. This suggests better cost management and pricing power. Investors are also looking at the company's ambitious capacity expansion plans aimed at future growth.

The backstory

Chatha Foods is a business-to-business (B2B) supplier with a 29-year history, primarily serving over 5,000 stores and maintaining strong relationships with major quick-service restaurant (QSR) brands like Domino's and Subway.

What changes now

The company is embarking on a significant capacity expansion. Current annual capacity stands at 7,800 MT with approximately 65% utilization. Chatha Foods aims to increase this to 30,800 MT by FY28, targeting an 80% utilization rate. This expansion is geared towards supporting deeper penetration within existing QSR clients and exploring export opportunities, with a goal of over 45% export revenue by FY28.

Risks to watch

A significant concern highlighted is customer concentration. The top four customers account for 84% of the company's total revenue. Any loss of these key clients could materially impact the company's financial performance.

Peer comparison

Data on specific peers was not provided in the filing.

Context metrics (time-bound)

Chatha Foods has achieved a 12% revenue Compound Annual Growth Rate (CAGR) from FY23 to FY26. The company ended FY26 with 183 active SKUs.

What to track next

Investors will be closely watching the execution of the large-scale capacity expansion planned for FY28. Monitoring progress on achieving the targeted capacity and utilization rates, as well as diversification efforts to reduce reliance on top customers, will be crucial.