HONASA Q4 FY26 Results Analysis: EBITDA Margin Beats Target 286 bps, PAT More Than Doubles

HONASA reported Q4 FY26 numbers with revenue of Rs. 6,570.84 Cr (+23.15% YoY) and PAT growth of +178.00% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

HONASA delivered exceptional Q4 FY26 results with EBITDA margin of 11.73% beating the 7% target by 286 bps, driven by strong operating leverage (940 bps spread between revenue and expense growth). PAT more than doubled YoY to Rs.694.38 Cr while revenue grew 23.15%. The BTM Ventures acquisition contributed Rs.865 Cr in its first full quarter. Management's 100 bps annual margin expansion target from FY27 starts from a elevated 9.86% base, providing headroom for continued profitability improvement.

Key Investment Insights

Key Positives

• FY26 EBITDA margin of 9.86% exceeded 7% target by 286 bps
• PAT grew 178% YoY to Rs.694.38 Cr (from Rs.249.79 Cr)
• Revenue grew 23.15% YoY to Rs.6,570.84 Cr with 9.23% QoQ growth
• Operating leverage: expenses grew 13.8% vs revenue 23.15%, delivering 940 bps spread
• EBITDA margin expanded 667 bps YoY in Q4 (from 5.06% to 11.73%)
• Debt-free balance sheet with 19.7% YoY equity growth
• BTM Ventures acquisition completed, contributing Rs.865 Cr to consolidated revenue
• Maiden dividend of Rs.3 per share declared

Risk Factors

• Working capital consumed Rs.599.57 Cr due to receivables increase of Rs.655.54 Cr
• CFO/PAT ratio at 0.71x, below healthy threshold of 0.8x
• Purchases of traded goods grew 64.4% YoY vs revenue 23.15%, indicating input cost pressure
• Employee costs grew 49.4% YoY, above revenue growth rate