FNS International: The Premium Cutlery King That’s Losing Its Shine

India loves its shiny spoons. For over 15 years, one homegrown brand has quietly ruled the premium stainless-steel cutlery and tableware space — FNS International.

Designer dinner sets in 5-star hotels? FNS. That sleek spoon in your Myntra gift box? Probably FNS. From Taj to Amazon, everyone stocks it.

The brand is strong, the distribution is wide, and the company is finally preparing for an IPO.

But the numbers? They’re telling a very different story.

The Growth That Wasn’t

• Revenue grew just 7.4% — the slowest in years.

• Profit crashed 63%.

• Operating margin dropped from 10.2% → 7.3%.

• EBITDA fell from ₹6.9 Cr → ₹5.4 Cr.

Why Does Profit Fall Even After Revenue Rises?

• Revenue Up by ₹6 Cr (67→74 Cr) → Good

• But Costs Rose Faster:

  • Materials: +₹2.5 Cr (38→40.5 Cr)

  • Employees: +₹1.7 Cr (14.7→16.4 Cr) → This grew faster than revenue

  • Only these two costs ate up ~70% of the new revenue.

• Other hidden expenses (overheads, interest, taxes, etc.) likely also increased, pushing total expense growth beyond the ₹6 Cr revenue gain.

• Result: Profit margins get compressed — more money comes in, but even more money goes out, leading to lower profit.

Profitability Under Pressure – Margin Analysis

Key Metrics (FY24 → FY25):

• Gross Margin: 55% → 51.50%

• EBITDA Margin: 10.20% → 7.30%

• PAT Margin: 4.40% → 1.50%

What’s Happening:

1. Cost of Sales is Rising Faster Than Revenue (Gross Margin Decline: -3.5%)

• Even with higher sales, raw material or direct production costs are increasing at a higher rate

• Shows fundamental pricing pressure or input cost inflation

2. Operational Inefficiency is Growing (EBITDA Margin Decline: -2.9%)

• Operating expenses (employee costs, admin, other overheads) are rising sharply

• Each rupee of revenue now carries heavier operational burden

3. Profit is Getting Squeezed from All Sides (PAT Margin Collapse: -2.9%)

• The combined effect of higher production costs AND higher operating expenses

• Further impacted by potential interest costs, depreciation, or taxes

• From every ₹100 of revenue, only ₹1.50 remains as profit vs. ₹4.40 previously

The Cash Burn Story

• FY25 operating cash flow improved only because they squeezed suppliers.

• The company is still burning cash every year.

• Cash balance has collapsed from ₹2.18 Cr → ₹0.17 Cr in just two years.

Where Did the Money Go?

Working capital is eating the business alive.

Key takeaways:

• Inventory is piling up.

• Receivables aren’t improving.

• They’re paying suppliers faster.

This is the classic working capital trap.

Balance Sheet: Looks Safe, But…

Debt increased 4 Cr, while profits collapsed. Interest cost shot up from ₹2.1 Cr → ₹2.7 Cr, eating whatever profit was left.

What’s Going Right?

• One of India’s strongest premium cutlery brands

• 3,500+ retail outlets + modern trade + e-commerce presence

• Strong hospitality segment with sticky institutional clients

• In-house manufacturing with quality control

• Backed by Ankit Mittal and Mavua Capital (₹3 Cr pre-IPO) in 2024.

What’s Going Terribly Wrong?

• Growth has stalled

• Margins are collapsing

• Working capital inefficiency is killing cash flows

• Debt is rising fast

• Profit fell 63% in one year, with no recovery in sight