Ladies and gentlemen, good day and welcome to Cello World Limited Q2 FY 20 26 earnings call, hosted by Monarch Networth Capital Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Before we begin, please note that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Rahul Dani. Thank you, and over to you, sir.
Thank you, Saisha. Good morning, everyone. On behalf of Monarch Networth Capital, we are pleased to welcome the management of Cello for their Q2 FY 2026 earnings call. We have with us today Mr. Gaurav Rathod, Joint Managing Director, and Mr. Atul Parolia, CFO. We also have SGA, the IR advisors. Now I hand the call to Mr. Gaurav for his initial comments, and then we will move to Q&A. Thank you, and over to you, sir.
Thank you, Rahul. Good morning, everyone, and a very warm welcome to our company's earnings call. Joining me is our CFO, Mr. Atul Parolia, and our investor relations advisor, SGA. The results and presentations are available on the stock exchange and on our website. I hope you had a chance to look at the same. During Q2 financial year of 2026, we recorded a healthy 20% top-line growth to reach revenues of INR 587 crore. With this, we crossed INR 1,000 crore revenue mark on a half-yearly basis for the first time and achieved revenues of INR 1,165 crore. We saw healthy offtake across key categories ahead of festive season. The GST rate has been reduced from 12%- 5% for approximately 10% of our product portfolio, primarily within the hydration category. GST rate for all of the other products remain unchanged.
Before we delve into our category-wise performance, we are very excited to update you about our agreement with respect to Cello brand for writing instruments and stationery. We are very excited to bring this back into our company soon. Many years back, we had divested this brand to a global company. Recently, they exited this business in India and the promoter group of Cello World Limited found an opportunity to get the brand back into our fold. CPIW, a member of the promoter group of Cello World Limited, the umbrella entity holding the Cello brand in other classes as well, will acquire the trademark for stationery and writing instruments, that is, Cello brand, from the BIC Group. One of the subsidiaries of Cello World Limited has entered into an agreement to lease the trademark for Cello brand for stationery and writing instruments from CPIW.
Upon execution of this agreement with CPIW, Cello World Limited will operate stationery and writing instruments portfolio among two brands, namely Cello and Unomax. The Cello brand continues to enjoy strong consumer recall and trust in the writing instrument segment. Our focus will be on enhancing operational efficiency, optimizing costs, and leveraging our established manufacturing and distribution infrastructure to unlock the full potential of the business. Now, coming to category-wise performance. During our quarter, our consumer wear segment maintained a healthy year-on-year growth of 23%, supported by good festive demand. The festive season particularly benefited the consumer wear segment the most, driving strong sales across our key product lines. Year to date, our glassware plant had a utilization close to 55%, whereas we saw about 60% utilization levels in Q2 of this financial year. I am pleased to share that our glassware plant has achieved breakeven during this current quarter.
Despite active dumping pressure from Chinese suppliers, we have successfully scaled up production and gained market share. Our focus now is on continuing expanding our market share in the coming quarters. Currently, we have around 110 SKUs in this vertical, and we plan to expand the portfolio to about 150 SKUs going forward. We are also undertaking solar-based cost optimization initiatives at the plant, which will further enhance operational efficiency and reduce energy costs. Strategically, our focus remains on import substitution in categories such as tumblers and storage. We have witnessed strong consumer acceptance in these segments with our products now being priced at par with imported alternatives, underscoring the quality and competitiveness of our offerings. Our steel category experienced a decline during the current quarter due to supply constraints.
We had to source steel wares from other OEM manufacturers at a slightly higher cost, which affected profit margins during this quarter. Our steel plant will commence production from December of 2025. Once operational, it will significantly strengthen our supply chain. We expect this expansion to enhance our cost competitiveness, support margin improvement, and contribute to the overall growth of our steel business in the coming years. With a top line of INR 81 crores, the writing instrument segment recorded a year-on-year growth of 16%. This growth is supported by encouraging signs of revival, driven by new product launches in mechanical pencils, art stationery, and internationally licensed kids products. With the addition of the Cello brand under this portfolio, we are highly optimistic about the growth prospects of this business.
Upon completion of the transaction, the company will issue a separate communication outlining the subsequent course of action, strategic initiatives, and other relevant details. The furniture business also had a decent quarter, with an 8% year-on-year growth in revenue, which reached INR 84 crores. The growth is primarily driven by product addition into this category. These efficiencies across segments were also reflected in the working capital position. The inventory is on a reducing trend with channel stock easing out. Ecom and Quick Commerce both saw a major shift in terms of channel mix, which is also helping us in this respect. Overall, we remain on track to achieve double-digit revenue growth for the year, with EBITDA margins around 22%-23%, underpinned by strong execution, disciplined cost control, and the benefits of our capacity expansion.
With the ramp-up of our glassware plant and the steel plant, we look ahead to a stronger financial year 2027. I will now hand over to our CFO, Mr. Atul Parolia, for the financial highlights. Thank you very much.
Thank you, Gaurav, and good morning to everyone. I will be sharing the financial details for the quarter gone by. In Q2 FY 2026, we achieved a revenue of INR 587.4 crore. That is 20% year-on-year growth. EBITDA stood at INR 141.3 crore, with a healthy EBITDA margin of 24%. PAT stood at INR 85.7 crore with a margin of 14.6%. Speaking of the revenue mix, over 71.9% of revenue came from the consumer goods, 13.8% from the writing instruments, and the remaining 14.3% from the modern furniture and allied products. Sales contribution of both the generative and export are on the downtrend at 73.3% and 6.7%, respectively.
Contribution of online sales was about 11.6% and modern retail at 8.4%. In terms of segment-wise margin, writing instruments led with a 55% gross profit margin, followed by consumer goods at 50.2%, and modern furniture at 40.9%. Now coming to H1 financial year 2026 performance.
Revenue was INR 1,116.5 crore with a year-on-year growth of 13%. EBITDA stood at INR 267.6 crore with a margin of 24%. PAT was at INR 158.7 crore with a margin of 14.2%. Our cash flow from operations stood at INR 261.7 crore. On the balance sheet side, we continue to maintain a healthy net cash position. With this, I would like to open the results round for question and answers.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Yeah, thanks for the opportunity and congrats to the entire team for acquisition of Cello Pens brand. Just certain clarifications here. Authum Group has also purchased the business from BIC Cello as per the BIC announcements. If you can elaborate a bit more on the transaction of the deal, how it will be done, whether the brand only will be purchased by Cello, the rest of the business by Authum, or how is it working out? If you can throw more clarity on this. Secondly, what will be the revenue addition like the software assets, for example, distributors, retailers, all other designs, in a way all other copyrights, et cetera, everything is purchased by Cello or anything is gone to Authum? If you can clarify a bit more on that. Eventually, how do we build the acquisition in terms of numbers?
Where do you see the acquisition panning out in, let's say, FY 2027? Because I guess four months will be required for the transaction completion. So how do we see the revenues building up for pens business in FY 2027? Then last question, what will be strategy on Unomax brand? Because anyway we have an established brand in pens. Yeah, thanks.
Thank you, Aniruddha. So basically, for us, we are basically entering into an agreement with BIC Cello for the pen brand itself. So it is basically the trademark copyrights, and the brand itself will be acquired by CPIW, which will be then leased to Cello World in a separate subsidiary. On all the other numbers, I think it is a little premature for me to give you our revenue numbers and things, because once we close everything, we will issue a note on what will be the revenue potential, what is the kind of CapEx that will be required. Overall, that's how we will be issuing a separate note on this a little later.
I think on the third piece, we will be running both the brands simultaneously, Unomax and Cello. They continue to exist though we will be managing the brand. And Cello, they continue to exist in the market. I think both have established themselves.
Of course, Cello has a much higher brand equity. We will of course do justice to both by having separate teams working on this, although there will be shared infrastructure and other efficiencies that are to be gained from this transaction. So of course, we will be issuing a separate note out clarifying everything. For now, it is a little premature for me to comment on that. Thank you.
Okay, sure. Just one question still harping on that, but any royalty to be paid to BIC Cello for the brand or to even Authum Group, anything of that or nothing as such? That is one question. Lastly, with the glass plant now stabilizing, should we see that probably the initial costs are over and we should build in steady margin expansion starting with FY 2027? That is it from my side.
Right. Basically, in terms of the brand, CPIW, which is the entity that holds the Cello brand as well, will be acquiring it. There is no royalty post that, and it will be leasing it out to Cello World at no additional cost and no royalties as well. There will be no royalty in this case to Cello World at all. Secondly, in terms of the glass utilization levels, as I mentioned that it has come to about 60%. We will be most likely maintaining this as we grow our sales over the next two quarters. These utilization levels will grow slightly, but not by much, because I think currently now we have reached good utilization levels. Now as our revenue will increase, then the utilization will keep increasing. For now, the good part is that we are no longer losing money.
It is now broken even. Now it will start generating some amount of profit, though not very significant for at least the next couple of quarters. But it has started generating a very nominal profit for now.
Okay, sure. This is very helpful. Many thanks.
Right. Thank you so much.
Thank you very much. Ladies and gentlemen, a reminder to press star and one in order to ask a question. I repeat, kindly press star and one in order to ask a question. The next question is from the line of Mr. Rahul Dani from Monarch Networth Capital Limited. Please go ahead.
Yeah. Thank you, sir, and congratulations on a good set of numbers. Just a couple of questions from my end. Just wanted to get some sense as to what kind of utilization have you reached for the opalware division right now, and incrementally, would we be looking to increase capacity here?
Right. So in opalware, we are about close to about 85% utilization levels. I think post this, we will now be a little circumspect. Because currently, putting up a new plant is basically adding a significant amount of capacity. So opalware, because it is a furnace, we need to add a significant capacity to make it viable. So I think for now, we will try to first utilize 100%. That will be our first priority. Post that, if the market is also aligned and we think that this category can grow at that pace, then of course, we are open to expanding this capacity going forward.
What kind of growth would we have seen in the opalware division for the quarter, if you could just quantify the percentage?
We do not give out separate contributions for each category. Maybe if there is a question on that, I can answer it offline later.
But would that be a double-digit kind of growth with the opalware division?
Yes.
Okay, sure. Just wanted to get some sense on the molded furniture business. Just wanted to get some outlook here, because margins have contracted quite a bit. Just how are we looking at this division in the future?
Molded division, as we have always maintained that it is going to be an up and down kind of a path, because we do not see too much growth potential in this business in terms of revenues. Our only thing is to keep premiumizing, adding outdoor furniture, which is a little premium, and slowly increase that to increase our EBIT margins. We do not see very high revenue potential here. But having said that, we are always looking out here to add newer categories apart from molded furniture, which we are still thinking on, and eventually there will be something else that will also come up here. I think future, there will be some expansion here for into different category.
Sure. Thank you so much, and all the best.
Thank you very much. The next question is from the line of Praveen Sahay from PL Capital. Please go ahead.
Yeah, thank you for the opportunity, and many congratulations for a good set of numbers.
Thank you.
The first question, sir, related to your commentary. You had mentio ned that the new capacity coming on stream across plasticware and the steel bottles. If you can give some color on that, how much is the potential increase in the capacity and impact on the revenue because of that?
Right. In this quarter also, I think our major pain point was steel category, because we saw a little contraction there. Mainly because the demand was there, but the contraction was due to supply shortages. As you all know, there are no more imports that are possible, and we have to rely on some of the OEM manufacturers that have already started capacities in India. But even after that, they are not able to fulfill all the demands or all the SKUs. I think with the expansion that we have done already in this category, we are starting that facility next month, and that should basically stabilize in the next four to five months. I think then that will fulfill the demand. This is more substitution of the imports rather than expansion of capacity that will happen.
In terms of plastic houseware, we are starting a very small amount currently. We are just adding some amount of capacity with the steelware. Not very significant, but for the potential is to add more in that particular area, where our glass plant also is at in Rajasthan. As revenues grow there, we will keep adding capacity further.
Okay. Secondly, you also highlighted related to the steel prices, which has actually impacted your margin. So with the opening of such kind of capacities, are you hopeful the margin to come back?
Yeah. See, basically, currently we are trading, right? So trading margins, whatever, the OEM suppliers also have, with manufacturing, we will be able to bring it down a little bit. So I think that is where the margin growth will happen, because currently we have lost a little margin there because previously when the imports were on, the pricing was much better. In India, the pricing is a little higher for every manufacturer. So I think whatever the trading margins are there, we will be able to gain through manufacturing. I think that is why the margin profile should improve.
Okay. Also on the guidance, 12%-15% of growth with a 23%-23.5% of margin for this year.
Yes.
Where it is now?
Currently in H1, we are at 13.5% for the first six months of growth, and we are at about 12.7%. My bad. In terms of EBITDA margins, we are at about 24%, which is with the other income as well. If I remove that, we are at about 22%. I think we want to be in the 22%-23% range without the other income portion of it. I think operational income is what I am talking about. I think we are on track to achieve this 12%-15% for the year. If this kind of momentum continues, which we have seen in the last quarter, we should reach there pretty easily.
Got it, sir. Also on the brand acquisition, that is BIC Cello Group brand. With this brand acquisition, do you see what revenue the BIC Cello must be do? You can able to garner such numbers?
See, I think BIC already has a certain amount of revenue that is there, and I think we understand this category very well. With the Cello brand, if Unomax is garnering these kinds of margins with Cello having a stronger brand equity, I think we can turn this around. Of course, it will take some time, but in the next one and a half year, we should be looking at similar numbers like Unomax.
Okay. Do you have a capacity for this kind of revenue?
Yes. Already we had about 30%, 35% capacities that were empty in our Unomax facility. This is not very difficult to expand. It is more expansion of machines. If you have a little bit of space also in your facility, by just expanding some machines and some production lines, you are able to. Because these are all seven, eight times return kind of product lines, you are able to increase capacity pretty swiftly. I think the idea would be to use our current infrastructure, and as we grow, we will add infrastructure. With that, we will come up with a separate note on what will be needed at least for the next year or so to achieve the growth, or at least have the number that currently they are doing.
Right. The major focus would be on the domestic market?
Yes. Cello, of course, has a much higher base when it comes to the domestic demand. More than Unomax also currently. Traditionally also it has been a leader in this category. I think by doing some tweaks, getting some good products in the market, I think we will be able to gain a little bit of market share in this particular category.
Right. Coming to your export business, because this quarter we had seen a good 12% of growth you had given for a quarter in the export. Is that export especially in the writing segment has a revived comeback or such kind of a momentum to continue?
I think export has actually come back to its previous level, where it was. It had declined a little bit. Having said that, I think we will continue at this level. It will not dip I feel for the year, it does not seem like. Because we have not been hit by the tariffs as yet. The orders have not slowed down. But we have a decent amount that we sell to the U.S. as well. So if nothing gets hurt there, I think we should continue to do these numbers.
Right. Thank you and all the best. I have some more question, I will come in the queue.
Sure.
Thank you very much. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Jay Doshi from Kotak. Please go ahead.
Yeah. Hi, thanks for the opportunity and congratulations on acquiring the Cello brand. My first question is on demand. You have seen a good uptick in demand this quarter and partly probably attributable to early festive or strong festive. So how do you see the demand environment continuing post-festive? Is there an improvement in the underlying sort of demand across your categories, across markets? Or what we have seen in September quarter, was it a function of early festive or is there an improvement per se?
Thanks, Jay. Basically, yes, there was an uptick for sure. This actually could have been slightly better if the GST announcement had not come in, because we have not really benefited a whole lot from the GST side of things. Of course, from the sentiment we have, of course, benefited, I feel. Other than that, it seemed like this thing is back. Because this has been by far the best quarter in terms of demand. The festive demand, I feel we got a bit of October also, early festive had a certain role to play. Even the most part of October was pretty good. The traction seems good. But we have to wait and watch how things will pan out in terms of the overall demand. Across categories, across geographies, we have seen a growth. That's definitely there in the consumerware side for sure.
But what we need to see is that the demand stays where it is. Of course, it has also helped that a lot of channel stock has been cleared. So we are hopeful that this demand will continue to see a growth or at least this demand will be steady for the next few quarters.
Sure. That's helpful. Second is, on a sequential basis, your gross margins have come off sharply, even in consumerware segment. I think with scale-up of glassware business, we thought that gross margins would be stable, if not better. So what's driving that and how should we think about the trends there?
Right. I think because in the glassware side of things, the costs are still high, right? Because utilization levels are still low. And utilizations are low also because of sales catching up. Because we are not making money in the glassware business. So if glassware would have contributed to the overall margins, then you would have seen a 1.5% extra margin growth. So though it has contributed to revenue, it has not contributed to the overall margin profile. Second of all, I think the product mix also in our kind of categories does play a role. Sometimes, 1% or 2% year-on-year could be there in terms of what kind of products have been sold. Also in the last quarter also I mentioned that we have still not been able to raise prices as the costs have gone up.
Because every year, of course, the costs are going to go up, and we were able to pass it on. This year, though, hopefully from now onwards, if the demand stays good, we will be able to see an improvement there in terms of lesser discounts that we would have to pass on. I feel this is a function of two to three things. It is not that it is going to be like this. It should improve only from here. Also the steelware, as I said, also had something to do with it because the margins there have also contracted because of supply shortages, because of OEM manufacturers that are selling to us at a slightly higher cost today.
With manufacturing coming in there, those efficiencies should also kick in and lead to slightly higher gross margins there. I think all these factors once they are back on track, we should see a good number there again coming back.
Sure. The final one. I know you cannot disclose everything or all details on Cello Writing Instruments yet. First is, when do you expect to close this transaction? Following which you indicated that you will come out with a detailed press release. Is it expected very soon in a week or two, or could it take more time?
They are very close. I think this should close within this month itself, and we should ideally start seeing revenues in Cello World by January. By the last quarter, we should see revenues in Cello World.
Okay.
That is what we are currently looking at. Of course, there are some details to be closed. Post that, we will have a better idea of things.
Sure. You did mention that in one and a half years' time, Cello World should be at a similar level as Unomax. Were you referring to profitability or were you referring to top line?
Profit—
Because top line, I feel that Cello World should be ahead of it, right? Cello World is already clocking better top line than Unomax as of now.
No, it is actually not clocking currently. Currently, because that also includes their exports, which will be kind of dual exports. They do exports in the BIC name as well. That is why it also includes exports. They have significantly gone down. But of course, still doing better than Unomax. But I think what we are going to be more concerned about is to bring back revenues with profitable growth. That is why, of course, we are still thinking about how we are going to be going about it. And that is why once we are fully aligned and fully know the numbers, I will be in a better position to tell you what exactly we are looking at for the next year, and post that also, what we are thinking of, what numbers are achievable with the same kind of margin profile as Unomax.
One final question. You started Cello Writing Instruments business in 1995 and then exited in 2015. So, it is practically a 30-year-old brand. If I remember correctly, in 2015, that scale was INR 600 crore plus top line and 25% margin. Is that correct understanding?
Correct. Absolutely. Yeah.
Is there any structural change in the market or brand equity in the last five, 10 years after you sort of that we should be aware about, or you think that the brand equity is still as strong and structurally from a distribution standpoint, it is still a very solid brand or trademark that you have acquired?
I think the equity is very strong. I think there were managerial inefficiencies that were the leading cause of the contraction in revenue. Even if you go two, three years back, the revenue was still pretty good. The last two, three years has been very bad. I think two, three years does not underscore the entire brand equity, and I think the brand equity still remains very strong. We have spoken to a lot of the channel partners of Cello as well, and we feel that operationally how things were done and whatever the product mix and the product innovation was not there, which had really caused the contraction. I think just doing some things right will lead to good numbers here. I think we understand this category extremely well. Turning it around should not be very difficult.
But we will, of course, look at the details of how we are going to get around it. But I believe we are pretty confident.
Sure. Thank you so much, and congratulations.
Thank you very much. The next question is from the line of Mr. Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Yeah. Good morning. Thank you for the opportunity. Two questions. One, I couldn't follow the explanation, what you gave with respect to the gross margins. The gross margin on a quarter-over-quarter basis, I'm talking from first quarter to second quarter, the consumer wear is down from 56%- 50%, and writing is down 58.8%- 55%. I was just curious to figure out what has driven this and how do we see it going forward? You did indicate your guidance on the EBITDA margin, but I'm just trying to figure out first from the gross margin level.
Gross margin, when I spoke about the contraction, there are two to three factors, as I said. One is that the glass sales are higher, which is from the new plant, which currently adds higher costs. That basically is captured here. Second is also the steelware, which there is a contraction of gross margins there for the moment, which will come back. The third is discounts. The discounting has still been there, basically, and the costs have gone up. The costs have gone up from June itself, and the product has also changed. A lot of our products, actually, 2%-3 % I would attribute basically to glassware and steelware. The rest, 1%- 2% will always be varying because of what sells.
Because we have such a wide portfolio of products, sometimes the premium sells a little more, sometimes the more cost products that are more price sensitive, we sell more. So 1%- 2% variation will always be there. [This 6% will affect the temporary reset which will approxy coming back on the next] two quarters.
Fair point. Is it fair to say that on an annual basis, if I look at across these three segments, they should be maintained, or we should see some contraction at each of these segment-level growth months on an annual basis?
For this year, we still maintain that the overall margin profile will be at about 22%-23% EBITDA, mainly because we still need a couple of quarters for the Cello glass to scale up, because we cannot increase utilization levels until our revenue catches up. Because if we start increasing that, we will only increase stock levels, and this is a continuous plant. You cannot afford in a continuous plant to keep stocking up. I think that is one thing that is going to play a part. Having said that, the trend is, of course, upwards. In the steelware plant, it will take about five to six months, as I said, to stabilize and give those efficiencies. I think post that, you will be able to see things improve a lot more. In the first quarter itself, I think of financial year 2027, you should see a lot of improvement.
Just to clarify this 22%-23% EBITDA margin, is it including or excluding other income?
It is excluding other income.
Okay. Understood. If you were to club September plus October,
Yeah.
What that growth would be at the company level, would that still be 20%, or would that be more of 10%, 12%? I am just trying to get a sense about your early festival impact on the GST impact and put together everything.
Early festival, of course, has played a little bit of a part. Having said that, yes, of course, it cannot be in the same lineage as what it was last year. It has come down from there a little bit. But having said that, the secondary sales have improved a lot on the ground. Channel stock is very low. That itself should hopefully lead to a good November, December.
Understood. Any quantification you could do? How much was earlier and how much is now, secondary channel stocking?
I don't have a specific number for it. The overall sense is that it has improved a lot more because overall, the cash flow has also improved. Our outstandings have also been cleared very quickly. I think these are all indicators of a much better thing. Plus, we've been talking to a lot of our channel partners, and we see that their stock levels have been quite low on their side as well. Their secondaries have been much higher than their primaries.
Understood. I think those were my questions. Just a clarification on the Cello brand acquisition.
Yeah.
Is it right that you've not acquired the plant and machinery, you've just bought back the brand. Have I understood right?
Absolutely. You're right.
CPIW has actually bought the brand, and it will lease to us, just the way for other categories.
In the process stage. We haven't closed, but in the process, very close to closing.
The mechanism is the same, right? The timing, I understand, maybe a month away or something.
Yeah.
But if I understood right that it is with CPIW and they will lease it to Cello World.
Correct. That is exactly how the other brands are leased. The same way.
Understood. All right. That is helpful. Thank you so much.
Thank you so much.
Thank you very much. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead.
Yeah. Hi, Gaurav. Can you talk on opalware? How the opalware is performing, how is the competitive intensity in the segment?
I think opalware for us has performed decently well. Of course, we are no longer in opalware looking at 30% plus growth. But having said that, it is a good growth for the quarter. I think there have been new entrants in this particular category. Currently, of course, it has been very premature. They have not really made any dent in the market as of now. But going forward, competitive intensity in this segment will increase a little bit. But having said that, we are already at about 85% utilization level, so we are not very concerned. We are, of course, more concerned on when we can expand, which, of course, we know very soon in the next five, six months, if there is any scope of expansion in this category.
But we sit pretty good at the numbers that we are at today. Maybe by end of this year, we will know if we are able to add any more capacity or we continue for the time being with the capacity that we have.
Can we expect the Q3 and Q4, we have a higher auspicious marriage day, so we can expect a better demand across segment and opalware will be higher growth trajectory in Q3?
Yeah, I think the marriage season plays a part in opalware, and it seems like a good marriage season, so hopefully, things will be good in the next couple of quarters.
Okay. Thank you.
Thank you very much. The next question is from the line of Praveen Sahay from PL Capital. Please go ahead.
Yeah. Hi, sir. Thank you for the follow-up question. This Cello brand is largely for the pen.
Yes, pen and stationery. It includes a lot of other things, like a pencil, a crayon. It can be used for anything. Basically, anything in the stationery segment.
Just a clarification. It is like 80% is the pen and the rest 20% is other stationery. Is it like that or different?
No, current revenues, we do not know, sir, how the split is. We will know that soon. What I am saying is this brand is for everything. It does not exclude any product.
Right, sir. Second clarification on the glass plant which is impacting your margin. At what level of utilization of the glass plant do you see the impact of the higher cost will nullify?
I think at about 70%- 75%, we will start looking at good margins coming in. Before that, we might not have very good margins. Though we are not going to lose any more money, we are going to make a little money. Having said that, 75% is what we are looking at. And that utilization will hopefully grow quickly. We are putting all our efforts to grow that quickly. Having said that, it does take a little time because we are building this demand from scratch. And this is a 10-year horizon because these plants don't require much CapEx after this now. And once we build that demand, we keep increasing our profitability margins also, of course, also the product mix.
Right, sir. Second, on the receivable days, which has increased, and it's the nature of business, I understand that first half usually are higher. You had also mentioned that you are getting a good payment profile improvement and all. Is that easing out very fast in the month of October?
October, we had a very good collection. Basically, that is why I was saying that September will of course show higher because the sale was higher. But in October, our collections were good, and based on that, we are seeing that the improvement in stock positions at our channel partner end as well. Because otherwise, payments would always come in slightly slower after the festive season, because even the other partners, like the dealers, pay a little later. But if the dealer profile improves, then our distributor channel payments also improve, which we have seen in October.
Okay, good to hear that. And the last questions are related to the CapEx. Can you give 2026 and 2027 CapEx for a year?
Yeah. I think this year would be a CapEx of about INR 150 crore. That includes, of course, the steel plant expansion, which is close to about INR 75 crore with land and building. The rest is, of course, maintenance CapEx.
Okay. In 2027, sir?
Going forward, this will be, I think next year it should be around INR 75 crore maintenance.
Okay. Thank you, sir.
Thank you very much. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Deepesh J. Sancheti from Manya Finance. Please go ahead.
Hi, am I audible?
Yes.
Yeah, hi. Gaurav, congratulations on a great set of numbers and for the acquisition of Cello brand. My question was regarding with Cello. On an average, last three years, it has done a sales of around INR 400 crores. Do you think with this acquisition, we will be able to achieve that kind of sales in the next, maybe by FY 2027? Do we have the bandwidth in terms of our capacity utilization on our existing Unomax plant?
Basically, a lot of their sales also covers exports that they were doing to their own clients. I think we will have to look at that number very differently. We will, of course, come up with all the details about it once the acquisition is done. The thing is that we want to grow this category, and hopefully we are able to grow it very quickly. But we will grow it profitability. We would not like to compromise on certain things, and the quality, of course, because from what we heard, there were some things that were not the best, which we would like to improve and grow it sustainably for the future. I will come up with more details soon on that once the acquisition is done, and we will also have a better insight.
What you mentioned in the previous question about your CapEx, will that CapEx also increase in terms of the writing instruments also?
I think currently we do have the capacities. Of course, some CapEx will be needed for the writing instruments, but will be very limited and within our own facility. We will be adding machines, we will be adding same molds, we will be adding some tape machines, some molding machines. That could be the only thing that will be added. And with that, we will come up with a CapEx that will be needed for at least a year in the writing instrument segment.
Great. Thank you so much, and all the very best.
Thanks.
Thank you very much. A reminder for participants to press star and one in order to ask a qu estion. As there are no further questions, I would now like to hand the conference over to management for closing comments.
Right. Thank you very much for all your participation. If there are any further questions, you can please reach out to our IR advisors at SGA. We are very excited to bring the Cello brand back, and I think it is a great journey, and I think we will do our best to achieve the numbers that our shareholders wish. Hopefully, we will be able to do a good job. Thank you so much.
Thank you very much. On behalf of Cello World Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.