Chaman Lal Setia Exports Limited (NSE: CHAMANSEQ) on Thursday reported a strong financial recovery for the third quarter of fiscal year 2026, characterized by a sharp sequential surge in export volumes and double-digit year-on-year growth in profitability. Following the announcement, the company’s shares rallied more than 16%, hitting a session high of ₹320.00 as investors reacted to expanding operating margins and a robust turnaround in global demand.
Surge in Export Volumes Drives Revenue Recovery
The Haryana-based basmati rice processor recorded net sales of ₹431.0 crore for the quarter ended December 31, 2025, representing a 9.0% increase from the ₹395.3 crore reported in the same period last year. More significantly, the figures highlight a 57.9% sequential growth from the preceding quarter, marking a definitive end to the volume stagnation observed during the first half of the fiscal year.
The performance was underpinned by a substantial increase in export volumes, which reached 48,965 metric tonnes (MT) during the quarter. Management attributed this momentum to strategic stockpiling by global distributors and heightened consumption linked to food security concerns amid ongoing geopolitical tensions. The company also benefited from a favorable pricing environment, realizing increases of 10% to 20% across its premium basmati categories, particularly the 1509 and 1718 steam and parboiled variants.
Financial Performance Highlights
Profitability metrics showed marked improvement as the company leveraged its integrated “farm-to-fork” model and asset-light processing strategy.
| Metric (Standalone) | Q3 FY2026 | Q3 FY2025 | YoY Change |
| Net Sales | ₹431.0 Cr | ₹395.3 Cr | +9.0% |
| EBITDA | ₹51.1 Cr | ₹39.5 Cr | +29.3% |
| EBITDA Margin | 11.85% | 9.99% | +186 bps |
| Net Profit (PAT) | ₹35.9 Cr | ₹29.0 Cr | +23.9% |
| Earnings Per Share (EPS) | ₹7.23 | ₹5.83 | +24.0% |
For the nine-month period ending December 2025, total net sales stood at ₹1,011.2 crore, compared to ₹1,127.6 crore in the prior year. Despite the year-to-date revenue decline, the EBITDA margin for the nine-month period improved to 10.36%, up from 9.55% in the previous year, reflecting disciplined cost management.
Strategic Drivers and Market Expansion
The company’s growth in Q3 was bolstered by its participation in major international trade events such as Anuga and Gulfood, which helped expand its footprint in non-traditional markets. Key growth regions during the quarter included Egypt, Malaysia, and the Israel-Palestine region.
“The focus remains on enhancing our brand presence globally while maintaining a lean working capital cycle,” noted Rajeev Setia, Managing Director and CFO, in comments regarding the operational outlook. He emphasized that the company’s financial strength allowed it to build inventory during the kharif harvest when paddy prices were lower, a move expected to support margins in subsequent quarters.
Chaman Lal Setia’s asset-light model—where 86% of its production is sourced as semi-finished rice for final processing—continues to mitigate inventory risk. The company currently operates at a processing capacity of 880 MT per day with a distribution network spanning over 90 countries.
Industry Outlook and Macro Context
The broader Indian rice export sector is navigating a pivotal period as the government continues to ease previous export curbs. In 2025, India’s total rice exports reached near-record levels of 21.55 million MT.
A significant structural tailwind for Chaman Lal Setia is the recent reduction in U.S. import tariffs from 25% to 18%. As the company already maintains a presence in the U.S. through private labels and its flagship “Maharani” brand, this reduction is expected to lower the landed cost of its premium products, further enhancing competitiveness against regional rivals from Thailand and Vietnam.
Despite a 1% appreciation of the Indian rupee, which can occasionally compress exporter returns, the company’s ability to command premium pricing in the Basmati segment has provided a buffer. With a net debt-to-equity ratio of approximately 0.1 and a working capital cycle of 188 days—significantly lower than the industry average—the company remains positioned to pursue its internal revenue target of ₹1,500 crore for the full fiscal year 2026.
Reasons to Pass on CHAMANSEQ
- Nine-month revenue contraction: FY26 YTD sales declined year over year despite Q3 rebound.
- Rebound from weak H1: Strong sequential growth follows earlier volume stagnation.
- Export-dependent model: Performance tied to global demand and distributor stockpiling.
- Geopolitical-driven demand: Recent volume gains linked to food security concerns, which may be temporary.
- Commodity and pricing exposure: Margins sensitive to paddy costs and premium pricing dynamics.
- Currency risk: Export earnings exposed to rupee fluctuations.
- Working capital intensity: 188-day cycle remains relatively extended.
- Policy and tariff reliance: Dependent on export regulations and overseas tariff structures.
- Limited diversification: Concentrated in premium basmati rice segment.