Chaman Lal Setia Exports shares zoomed 17% to ₹321.20 on the BSE in Friday's intra-day trade amid heavy volumes. According to reports from Business Standard, the stock was trading 14% higher at ₹313.15 as of 02:41 PM, significantly outperforming the BSE Sensex which declined 1.1%. The average trading volumes at the counter jumped over 10-fold with a combined 6.51 million shares changing hands on the NSE and BSE. The stock had previously hit a 52-week high of ₹395.30 on July 1, 2025.
In Q3FY26, Chaman Lal Setia Exports reported exceptional financial performance with net profit jumping 29% year-on-year and 89.9% quarter-on-quarter to ₹35.9 crore. As reported by Business Standard, net sales grew 57.9% QoQ to ₹431 crore. EBITDA rose 29.3% YoY and 110.5% QoQ to ₹51.10 crore, with margins improving 186bps YoY and 296bps sequentially to 11.85% during the quarter. The company achieved a price hike of 10%-20% across premium Basmati categories, specifically the 1509 and 1718 variants, driving EBITDA to approximately ₹10 per kg.
The quarter marked a pivotal turnaround for the company's export business with drastic surge in export volumes to 48,965 MT in Q3FY26. According to Business Standard, this surge was driven by strategic global stockpiling and rising rice consumption, partly due to food security concerns during the Israel-Iran conflict. The management attributed the volume growth to a highly favorable pricing environment and the company's strategic positioning in the global basmati rice market.
Looking ahead, the reduction of US import tariffs from 25% to 18% is expected to be a significant structural tailwind for the company. As reported by Business Standard, this tariff reduction lowers the landed cost of the company's premium basmati rice and strengthens competitiveness in the US market. The management remains confident in sustaining this growth trajectory while continuing to enhance margins and expand the company's global footprint.
Despite the impressive Q3 performance, Chaman Lal Setia Exports faces underlying structural challenges that warrant investor caution. According to recent analysis, the company's five-year operating profit growth of just 3.56% annually significantly lags its 9.70% sales growth, indicating persistent margin pressures. The company's return on equity has declined to 12.38% from an average of 18.22%, while the half-yearly return on capital employed of 16.26% represents the lowest in recent periods. Additionally, the stock's high volatility with 38.26% beta and underperformance against the sector with -9.11% returns versus 21.81% sector gains reflect market skepticism about sustainability.
India is one of the largest producers of basmati rice with balanced quantities from Pakistan, and Indian basmati rice has received Geographic Indication (GI) recognition, enjoying strong dominance in exports to 160+ countries, especially the Middle East. According to Business Standard, India exported 19.865 million tonnes of rice till March 25 in FY25, marking a ~21% increase over the previous year's full exports. The company benefits from strong global demand and rising industrial use for ethanol and poultry feed, supporting continued export momentum despite current market challenges.
