Cello World (CELLO IN) – Q2FY26 Result Update – Re-enters stationery business under “Cello” brand – BUY
Published on 12 Nov 2025
Consumerware revenue (71.9% of Q2FY26 revenue) reported strong growth supported by good festive demand. Writing Instruments grew by 16.0% with revival of demand, new product launches, and export growth. CELLO’s gross margin contracted by 210bps, impacted by underutilization (60% in Q2FY26) of its glassware plant, high cost of steelware products sourced from OEMs, and continued discounting on products. Steelware category decline due to supply constraints. CELLO expects to improve its margins led by glassware and steelware plant ramp-ups and cost saving initiatives. We estimate revenue/EBITDA/PAT CAGR of 15.5%/14.3%/15.9% for FY25-28E.We upward revise FY27/FY28 earning estimate by 7.5%/9.2% factoring in incremental revenue contribution from the stationery segment under the “CELLO” brand, following the recent trademark leasing agreement. We assign SOTP-based TP of Rs732 (earlier Rs686), implying PE of 32x Sep’27E. Maintain “Buy.”
