Cello World (CELLO IN) – Q4FY26 Result Update – Utilization Ramp-up Key to Margin Expansion – BUY
Published on 29 May 2026
Consumerware (66.4% of Q4FY26 revenue) reported modest performance, with the Hydration sub-segment remaining subdued due to continued steel bottle supply constraints, while Glassware and Opalware delivered steady growth due to slow consumer demand. Glassware plant utilization improved marginally to ~60%, but profitability remained at breakeven due to dumping of imported Chinese glassware products. Writing Instruments grew strongly by 64% YoY, driven by the addition of the Cello stationery brand and contribution from premium product launches. The management reiterated its target of reaching INR5.0bn+ Writing Instruments revenue in FY27. EBITDA margin remained under pressure due to low glassware utilization, higher steelware sourcing costs from OEMs, product discounting and an unfavorable product mix, partly offset by scale benefits in Writing Instruments. We estimate revenue/EBITDA/PAT CAGR of 8.6%/11.2%/9.9% for FY26-28E. We downward revise FY27/FY28 earning estimate by 10.2%/11.3% factoring in supply constraints in the steel category and underutilization of the glassware plant continuing for a couple of quarters. We assign SOTP-based TP of INR489 (earlier INR621), implying PE of 27x FY28E. Maintain ‘BUY’.
