Mold-Tek Packaging Limited (MOLDTKPAC) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to

Multi-Packaging Limited's Q4-FY26 Earnings Conference Call hosted by MK Global Financial Services Limited.

As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. In our end of the conference, go to Mr. Rajesh Kumar from MK Global Financial Service. Thank you, and over to you, Mr. Kumar.

Good afternoon, everyone. I would like to welcome Mr. J. Lakshman Rao, Chairman and Managing Director, and thank him for this opportunity. I shall now hand over the call to him for the opening remarks. Over to you, sir.

Good afternoon, everybody. Thank you very much for participating in our quarterly and yearly ending results con call. I'm very happy to announce good results from Moltec packaging, with all the units running with better capacity utilization than the past, and especially the consolidation of five units in Hyderabad into two units, that is, unit one and ten, has improved the overall performance and efficiencies and resulted in a better EBITDA margins. Going forward, and again, one more notable thing in this quarter is the pharma packaging. It's grown by 37 percent over the Q4 of last year, and overall growth of the full year is more than 200 percent, giving us the ability to look for higher numbers going forward. We are also expanding our product range in Pharma and have ideas to add some more lines of activity in Pharma, which can take the Moltec into a decent major player in this segment. So, going forward, the Pales business, especially in the paint side, has marked a double-digit growth this year. That is one of the reasons for closing the year at around 13% sales growth, 13.4%. And though there is a disappointing trend in loops, Thank you very much.

We will now begin with the question and answer session. Anyone who wishes to ask a question, may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and 1 to ask a question. The first question is from the line of Sanma Jain from Kamayakya Wealth Management. Please go ahead.

Oh, yeah. Hi. Am I audible?

Yes, sir. Your voice is coming muffled. Can you speak through the handset, please?

Yeah. Is it okay now?

Yes, sir. Slightly better.

Yeah. So, thank you for the opportunity. I have a question regarding the collaboration with Vibe. So, was there any revenue contributions from this contract in Q4?

Yeah, I already mentioned during my previous con call that this is a long-term opportunity where we are working with Vibe on development of a new set of products. Especially closures for high-end chemicals and lubricants, and now out of three products they have given us the designs, two products of pilot molds are ready, but these molds, to become commercial and add revenues, it will certainly take two or three more quarters. So the numbers will start adding probably towards the end of this financial year, 26-27. So YB as of now is on the developmental stage, but the products which are coming out are... Two out of three are already successful in pilot trials, and more and more visibility would only come after a couple of quarters.

Okay, so you gave us the guidance of 55 to 60,000 for FY27. So, is this including this contract revenue or will it be incremental to this?

No, 55 crores is our target for the next firm financial year, 26-27. We hit 35, almost 34.4 crores. For the current financial year, so we have taken a 50% growth, so to reach somewhere around close to between 50 and 55 crores for the pharma. We are online with that, I hope.

Okay, okay. Thank you. That's it, Pharma said.

Thank you. Next question is from the line of Aricha, from Equity Master. Please, go ahead.

Hi, am I audible?

Yes.

Yeah, thank you for the opportunity, sir. Sir, could you break down the growth in the paint segment volumes, you know, with Grasim and without Grasim?

Yeah, with Grasim and without Grasim, I don't have the figures readily available, but Grasim has contributed handsomely to the growth of paint because they have been the kind of new players and their numbers are expanding more rapidly. So, the volume also has shot up by more than 60% in ABG compared to the last year because last year base was much smaller. Currently, their numbers are improving month after month or quarter after quarter. So, they are contributing handsomely and they are in the top 10 customer service.

Okay. But, sir, a few quarters ago, like, you know, there was a lot of competition coming in for Asian pain, and, you know, we had some kind of weakness in volumes there. So, has that stabilized?

Yes. Rather, we have a very healthy growth in this quarter. We have more than 17% growth coming from Asian pains in Q4 to Q4. So, that's a very healthy recovery for us from Asian pains.

Okay. And so can you also elaborate on, you know, why such a sharp decline in the lubricant segment? I mean, I'm not sure how that is with industry, but normally the industry growth is, you know, tends to be between minus 2 to plus 2. This seems to be a sharper decline. So are we losing clients or market share there?

Yes, we lost the client BPCL towards the end of last financial year, who used to, I mean, which used to contribute about a significant amount of sale, but due to tendering system and public sector, they go only by L1 basis. We couldn't match their pricing and we let it go. So, one of the reasons why last four quarters, we still have loss in sale. Last year, itself, it was more than... 14, 15 crores turnover has come from BPCL. That has gone off this full year.

Okay.

So that is one of the reasons for the drop-in loop sales.

Okay. And for capacity-wise, how much additional capacity are we targeting for grass sales? And, you know, in pharma as well, because we have some capacity. Can we explain in that segment?

Yeah, currently, Pharma is hardly about 1,500 tons, and we have to still make new investments in that segment to take it up to 2,500 tons in this year. And Grassium, already we have capacities created more than 12,000 tons. 5,000 at Panipat, 4,400 at Chayar, and about 2,500 at Mahad, that is through Satara. So, total 12,000 tons of capacity has been created, which is running around 65% capacity as of now, and utilization as of now, which was better than last year, which was in the 50s. So, this is one of the reasons for better performance is those plants are running now at least around. 60-65% range of capacity utilization. And as we go forward, and as their demand also picks up, their planned capacity utilization will also improve there.

Okay, okay. And so one month, you know, has already passed in first quarter, and do you have any sense of how our syntax phase could look like, given, you know, what is the impact on ice cream phase? Are you witnessing the growth this quarter?

Yeah, I can't comment much about this quarter, but April has been pretty strong, and we have seen all-around momentum, in spite of the West Asia war, which has impacted the general sentiment. But the consumption of such goods, like ice creams or curds, they won't get impacted because they are not luxury goods. And even in the case of paint, we see a strong momentum still continuing, even in the month of April.

Okay, thank you so much. I'll come back and teach you.

Thank you. Next question is from the line of Chirag from Keynote Capitals. Please go ahead. Chirag, can you please speak through the handset?

Hello, am I audible now? Yes, congratulations for a great set of numbers. My first question is related to understanding from talking about the capacity expansion from 62,000 MPPA currently. What are we looking at for next year? Because we are already reaching a 70 percentage capacity utilization now.

Yeah, our capacity is 63,000 tons and utilization is hardly 43,000. So we have a long way to go to make use of this capacity. And some more missions which were ordered last year are on the way arriving in this year because there will be always some replacement of old machinery and also expanding marginally, especially units like Mysore and Satara, These are areas of growth, and pharma will continue to add machinery to meet the increasing demand for our products. So these three areas, but we have a sharp, lesser budget of capital investment in this current financial year, which was 140 crores two years ago for two consecutive years, and 120 years in this financial year, 25-26. And we hope to control this capex to 80-85 crores in the next year, that is 26-27, as we will be going only for brownfield expansions now onwards.

Got it. Got it. And that will lead to almost like 70,000 MPP capacity by the end of FI27. Is my assumption correct?

Yeah, I think we should be close to 68, 67 because capacity-wise in pharma, the number of tons won't be too many. It may be 1,000, 1,200 tons. And brownfield expansions are only envisaged at Mysore and Satara. Satara, basically, that is Mahad plant supply. So these are the two areas. And the rest of the plants we see, and of course, North plant Paripat, where we are adding thin wall capacities. Four missions are coming in this July. So by end of this financial year, that is 26, 27, probably will be somewhere around 67, 68,000, maybe close to 70,000 dollars.

Got it. Got it. So my second question is, generally, whenever there is significant raw material prices fluctuation taking place, the players who work on low margin packaging industry face a lot of headwinds. And at that time, clients tend to shift to different layers in the industry. So we just wanted to understand this current situation which is going on due to war. Has this led to some older clients who went away from us or some new clients adding to our portfolio?

On the contrary to your expectation, in fact, we are finding our clients coming back in hoards because they are worried about the connectivity, material procurement abilities, and ability to quickly react to the international scenario. So we noticed the jump in call-ups from even old clients like Berger and Narolac, who used to give us only a few grades, have now increased their call-ups in the fear, I would say, rather not fear of supply chain disruptions in smaller companies. So, they are coming back to us in terms of increasing numbers. And also, we need to notice the bond between us and the clients has become stronger due to the external environment being fragile. So, we are, in fact, finding some of them coming back to us, and dependence on companies like Molitech is going to go up, because, of course, I don't take it as an advantage, but a scenario is such that materials, sometime in March especially, has become very difficult to procure, but due to our long-term relation with Reliance and our... Other suppliers in an oil and HTML, we could able to get the S3 material in time.

Got it. And sir, will it be fair to assume, though you have mentioned your press release that all the cost increase we are able to pass on, I just wanted to know the current scenario, like, will it be fair to assume that we would be able to maintain the 46-47% gross margin limits in the coming quarters too?

Certainly, we have passed on the entire price rise to the clients across the segments, and they also appreciated that the reality, ground realities, and even some of them have reduced the period of... Robert Hill fluctuation. That means earlier there used to be quarterly. Now they've come down to a monthly or even sometimes 15, fortnightly correction. So that way, even when the prices come down, we too will have to pass on the reduction to them. It's a fair game. But I'm very thankful to all our clients. Majority of them have accepted the price rise rapidly because the price movement in March was so rapid. From 105 rupees in the beginning, it went up to 160 and now currently hovering around 145, 150. So we are, in this kind of a scenario, found our clients very much with us, and I think we can still continue to maintain our profit margins.

Good to hear that, sir. Sir, from the perspective of capital allocation, as you said that this year, we would be focusing less on spending or increasing our capacity. Will it be fair to assume that the additional 40-50 crore that we are earning is going to be used for repayment of debt?

Repayment of?

Repayment of debt. We have, because of the capacity expansion, we have taken certain debt on books.

Yeah, that payment will happen from the cash accruals. But next year, you are talking about next year capital asset allocation? For S527. Budget?

Yeah, yeah. For S527, yes, sir.

Yeah, we are planning it will be in the region of around 80 to 80 crores overall. It could be mostly from internal accruals. A little bit here and there that is required.

Date will be required.

Cash generation will be much more than 80 crores. This year, if you look at the cash generation, it's around 72 plus 59, 123 crores. Depreciation, I mean, we might have given a dividend of around 20 crores. So, still 100 crores is our net cash equals. So, we'll be able to catch up with that within a minute.

So, we won't require any additional debt for the capacity. I am just understanding that.

Yeah, it could be temporary in nature, but overall, I don't expect debt to increase.

Got it. So, just one last question, and I'll join back the queue. There is one accounting understanding I want to take. This particular quarter, we have significant jumps in other expenses. Could you just highlight what is the reason we have that?

Other expenses?

Yes, sir.

Yeah, some of the reasons could be we have taken up a severe preventive maintenance and change of screws and some other parts in the machines to suit to the RCP edition, because now recycled plastic has become mandatory. 30 percent is mandatory now, and it's going to be 40 percent from next April. So the machines which are equipped with ordinary screws are not able to process such mix. And we have gone for better, technically stronger screw material and screw systems, that corrections we have done in this quarter to a reasonable extent. So this is a one-time expansion in the maintenance costs that is preventive in nature, but it has been taken in the P&L.

And this mandatory requirement of RTK is just related to the paint and lube segment, right? Good morning, everyone.

Currently, yes. Pharma and food are exempted from this, but paint glue constitute, you know, majority of our sales. So, in terms of volume, that's why we need to be ready with the missions that are suitably altered.

Thank you so much, sir. I'll turn back to you.

Thank you. Next question is from the line of Sandeep Modi and a visual investor. Please go ahead.

Yes, sir. I'm audible now.

Yeah.

Yeah, sir. First of all, congratulations to the manager for increasing the state from 33.07 to 33.19.

Okay.

And, sir, one more thing. How many pharma companies have visited our premises? Any good news about pharma business, status of new product, etc.?

Sanjay, you should be very happy to note that in the year one itself, or I would say year one of full operations, We've grown by 210% compared to the last year, from 11, 11.5 crores to almost 34 crores, 10.7 to 34.3, so that is a 219% increase in pharma sales. Of course, it's a small base, so I would still take it as a good jump, given the competitive environment in pharma packaging, because of our good product range. The ability to develop new packs faster, we are able to entrench into this field and quickly become a name in the industry.

So we have now again taken a 50%

increase as our target for this current year. So to reach somewhere around 50 to 55 crores for the next financial year. Several clients are visiting nowadays. I lost count. And several of them are at different stages. Some of them are buying commercially. Some of them are in line trials. Some of them are in establishing the ORPACs. Like that. And some two, three new products, different cap systems are being introduced. As I said, we are also looking at ophthalmic and nasal sprays and also a couple of other products which I can't divulge today because it's in the nascent stage of discussion. But be assured, we'll be widening our product range year after year and getting more and more deep into the pharma sector in the coming years.

Yes, sir. Anyway, sir, how many new products are in process now? Molds are in process in pharma?

Now, molds means I can't just give you a count. It could be 5 or 10 molds at any given time. It may be new bottles, new sizes, same sizes with different weights. So, like that, different cores and different cavities may be changed or a new, entirely new set of products are being developed. So, at any given time, you can say there will be 5 to 10 products every quarter.

Okay, okay. Yes, sir. One more thing. No margin available in exchange for multi-packaging shares. Can you give some details about this?

Oh, I don't know much about stock exchange and their loans.

First, we were pledging the shares and we were getting margin on it, and now the exchange has suddenly stopped.

Okay.

So, sir, please look into the matter and just go through. And sir, what is the status of land which we have bought? Any expansion going on there?

Yeah, yeah, the land has been just acquired, but they had to hand over the land because of various bureaucratic things. The land is earmarked now. The road in front of the land is being laid now because it is in front of our unit in Suthalpur. So we really notice it every day. Probably in this month, we should be able to get the position or agreement, and then we'll be able to start commercial construction. That's one of the reasons why the construction activity also could not be started.

Yeah, sir, there was a pharma packaging. We are trying to start some new, this thing.

Yeah, the new plant is, new land is mainly meant for pharma alone.

Okay.

So once the land is handed over, the construction activity will start immediately.

So when will that completely, this new factory start over?

I think it will go into commercial production only by beginning of next financial year, I mean next calendar year. It may take at least 8-9 months to complete the construction once the land is handed over. For various reasons, there is a delay from the industrial estate to hand over the land. We have paid for it more than 7-8 months ago.

So, around Jan 28th, Jan 2028, it will be operational fully?

Yes, 27. 27. Before end of the financial year, I think we may start the new plant because of the delay in land allotment. Otherwise, it would have gone by third quarter of this year.

Okay, okay. Thank you very much, sir. Thanks for the reply.

Thank you. Next question is from the line of Deepak Saha from Asher Constitutional Equities. Please, go ahead.

Yes, sir.

Thanks for the opportunity, sir. First of all, congratulations on a good set of numbers. Just one bookkeeping question, if you can share the IML and non-IML mix for 4Q and FI26?

Yeah, it was for the 4Q, it was around 75.5% and overall year it is 75.5%. So, in value terms, it is 76.8%. So, almost 77, you can say, percent is in IML.

You got it, sir. That's helpful. And I got a little bit late, just pardon me if I missed it. On the paint volume side, you know, we have a very meaningful growth for this quarter. Is there any one-off? Because I think for 4Q, this, you know, kind of a paint growth that we have seen in terms of volume, 26% kind of YY growth after a long time. So if you can just share some color, whether it is sustainable going ahead and what led to this kind of a growth?

26% volume growth, I didn't say. It is 14.4% in value terms and 13.5% is the growth in paint segment. That 60% what I said is ABG numbers for the quarter, this particular quarter, ABG compared to the previous year Q4, the ABG numbers have shot up by 60%.

And there is no one-off in that, right?

Sorry?

There is no one-off in the volume.

Your voice is not clear.

I think there is no one-off in the volume growth that we have seen. There is no one-off at such length.

No, you mean it is one of the times only? It's not going to recur, you mean?

Yeah, yeah, yeah.

No, no, no. It's been consistently growing around 40 to 60%. Now it is overall yearly growth, quarter growth was 60 plus percentage, and overall yearly also it is close to 60%. So every quarter on quarter, a consistent growth, because they are also maybe acquiring new market share in the paid segment. I think it will continue at this level, but the way they are aggressively marketing and aggressively ramping up their production capacities, I think we will certainly be in a strong double digits for next couple of years.

Okay, and from FI27, from FI27, a full year point of view, how should we understand the growth numbers, and if you can broadly give a break-up, because lubricants have been de-growing, paint has now started growing, you said, both Haitian paints and other players are growing recently. So, if you just can give some color on a full year basis, FI27, what kind of a warming growth we should look for, and the breakdown of that.

See, I can say two ways of looking at it in the future. Because volume growth comes from mere kgs, then pharma, even if it grows by 50%, the number of kgs it will add will be less. But the number of rupees or value-wise, it will be much higher. Because our average realization in pharma is almost double that of other segments. So, in terms of... Just volume, it might look like 10 to 15 percent, anywhere between 10 to 15 percent of growth is possible. But in terms of value, I'm sure we'll be clocking between 13 to 15 percent value growth. Like what we did this year, 13.3%. We hope that we will be somewhere between 13% to 15% in the value growth in the next financial year. That is why I said in the year 26-27, we may cross the 1,000 floor mark, sales.

Got it. So this is definitely helpful. Thank you and all the best. Thank you.

Thank you. Next question is from Ryan of Darshita from DSP Asset Managers. Please go ahead.

Yeah, thank you for the opportunity. My first question was regarding the paints growth. I think the earlier participant mentioned that the paints volume growth has been 26%. I think this is for the fourth quarter. If you could just give us some understanding as to where has this growth come from? I understand you've mentioned that a larger portion of growth has come from ABG, but has Berger and Nerolac also contributed meaningfully to this particular growth, you know, because of the raw material unavailability issue?

Bajan and Neralak started only from March. That is the time when the real war erupted and the situation became fragile. So Bajan and Neralak growth is hardly for a couple of weeks in March or last... 15 days of March. Of course, they were buying from us, but the numbers have improved from March onwards. Asian Pains and ABC were consistently growing. You know, Asian Pains was negative till the third quarter, but in the fourth quarter, it's a good positive rise of 17%, which pulled the overall number into positive for the full year. And ABC was a major contributor towards this 14% growth in Pains segment. By handsomely adding, almost 10% of the growth has come from ABG alone, the remaining 4% from Asian Pains and others.

Got it. Secondly, we've mentioned that a larger portion of the raw material price increase has been passed on to the customer. Our volume growth for the quarter, for fourth quarter is 17% and so is our top line growth. Ideally, had there been some realization growth as well, which I'm assuming would have happened in the month of March, we ideally should have seen a higher value growth because volume and there could be some realization growth as well. So is it safe to assume that a larger portion of the value growth will be seen in the first quarter numbers? I mean, the realization pass on related growth will be seen in the first quarter.

Yeah, your guess is correct, because in the last two weeks of March only we got the price hike, because the war erupted in 1st of March, so we have to obviously keep the pricing stable till middle of March, some cases 25th of March. So hardly a week the price is reflective of high price, but you will notice that in Q1 more significantly.

Got it. And because of us taking price hikes, I'm assuming that our raw material quality property would have gone up by at least 25-30 odd percent. Have we lost any customers given that we may be revising the price more often than just what we usually do? I'm guessing 15 days or one month or so. Have we lost any customers because of that?

You know, all our clients are blue-chip clients in their respective segments, be it ice creams or curds or, you know, paints or loops or food, oils. So they cannot afford to reduce their presence in the market. Producing their products at the same pace as of today. I don't know how bad it can become, worse it can become, but as of now, we don't see any demand downturn in any of our top clients. So that's a very reassuring fact, which we are also observing. And we very rarely, out of our 100%, hardly 4% to 5% or max 6-7% of our sales would go to, I mean, non-blue-chip clients. So our impact, if any, would happen in those 5-6% to the tune of 1-2%. But while we lose 1-2% of such business, our major clients, Asian paints and ABG or even HUL, they are all going in full guns with their demand increase because it's mainly meant for local consumption. And in pharma, there's a replacement demand. We are replacing others due to our better quality and consistency. That is how we are penetrating in the Indian pharma industry, which is meant for exports. But the penetration is mainly into the replacement demand. And the growing demand for pharma also, you must be noticing that all the sanctions, again, as pharma exports have been completely removed, at least as of now. So all the pharma companies are in a full way, they are going forward with their expansion plans. So we don't see any impact immediately unless some new sanctions are put on pharma exports. So, given this scenario, most of the cases, 98 to 99 percent of our clients are safe, and they are growing with the domestic growth in demand, which is somewhere around 6 to 8 percent, you know that. So, that way we are safe, and because of the replacement demand in pharma and other areas, and more and more IML absorption coming from Asian paints, we are confident that we'll be able to sustain the growth.

Got it. Thirdly, on the FMCG or the FNF segment growth, how should we think about it, specifically just the FNF growth from FY27, for the year FY27, and more so from the Panipat facility? We had onboarded a few customers. I think we've added a few more customers in 4Q. If you could just throw some light on what the capacity utilization for the Panipat plant for FMCG was in third quarter, and what was it in fourth quarter, and how do you think about this in FI27?

I didn't have perfect numbers, but I can get the feel of that. Q3 was hardly anything because that is the time when we started the Panipat tin wall production. But Q4 started in decent numbers, somewhere around a couple of crores of turnover has come in the month of March alone from QPAC and tin wall together. And the numbers are increasing and the client number is swelling actually. We have signed recently a couple of big clients who are buying from our other competitors in that area, and North is going to significantly add to the numbers in the next financial year for sure. So food and FMCG from, if you see only thin wall, it is 15.4%. If you combine the thick wall also, food is around 18%. But this 15.4%, I'm sure it will be looking at at least 20% growth in the food and FMCG, including the North numbers. Put the next one on to you.

Got it. And if you can just share some light on what is the peak revenue potential from the Panipat facilities that we should think about and how long will it take for us to reach the peak capacity utilization there?

You see, in ABG plant that is mainly meant for pails and Q-packs, we are hardly reaching around 60% capacity utilization in Panipat. And in Thinwall, which is hardly four or five months old, we may be around 20%, 25% capacity utilization. So there's a long way to go, and we are, in fact, adding four more machines in July for Thinwall, so which will expand the capacity there by another 100%, and capacity utilization next year, even if we reach 50%, that will add handsomely to the numbers. So, Panipat has a long way to go, and the new building is completely ready now, the second building for the food and FMCG, and it has four machines, there will be eight from July. So, now we are getting ready for the festive season that starts sometime in July. So, I think next year there will be a good jump. I don't think it will go to 80% capacity utilization, but at least from current 20%, it may go up to 40-50% on a bigger capacity.

Thank you.

I'm sorry to interrupt. If I may, please come back. Thank you. A kind request to all the participants. Kindly limit yourself to two questions for participants. And we join the queue for a follow-up. The next question is from the line of Akhil Parek from 361 Capital. Please go ahead.

Yes, thanks for the opportunity and many congratulations, sir, on a very good set of numbers. My first question. On the Ebitda Park EG, right, and we have shown good improvement, what should that number look like, say, in FY27 and FY28?

FI27, as I expected, we are aiming at at least 42 to 43, 42.5 could be a good estimate for the full year. And then how it frames in Pharma, Q in 28, probably we can aim it around 43 to 44 range. So definitely the uptrend will continue now because two things. It's not just the growth in the different segments, but the consolidation of our operations in Hyderabad, where we reduce five plants to two plants. Now only Anaram and Sultanpur is two units which are producing all the products which were earlier made in five plants. So, thereby getting the better efficiencies, overhead reduction, and movement of goods has come down. All this is yielding to better productivity. All this consolidation happened only till January this year, that means until Jan-Feb. So, the full benefit of this consolidation and improved efficiencies would be reflective in the next financial year. That itself should add a rupee or so to the already 40.7. What we have achieved this year compared to 37.6 in the previous year. So there's a jump of 8.4% increase in the EBITDA margin, which is a substantial jump which we lost during the last couple of years we recovered. And going forward with these efficiencies kicking in, and more and more HDL levels also being made in-house, and new ways of automation, which we have taken up in various areas to reduce the manpower dependency, is going to improve the efficiencies going forward. And ABG plants, even today, are hardly around 60 percent capacity utilization. And I hope next year they will be reaching 70 plus, which will be a very good attitude to the bottom line. So going forward with the only brownfield expansions, which will marginally may require capital, but increase in the capacity utilization will kick in. So I look at very positively for 26-27 and to aim at least 42.5 to 43 range for 26-27. 27-28 may be a little difficult to predict now. Maybe we may touch even 45 given a good win in pharma. If it happens, we may aim at 44-45 also for next 27-28. But I can give a better picture going forward in the next couple of quarters.

Great, sir. And just reconfirming your growth guidance for 27, you suggested 10 to 15 percent volume growth and 13 to 15 percent value growth. Did I hear it correctly?

Yes. The volume growth is 10 to 13, 10 to 13 percent because pharma won't add volumes. It will hardly be in few tons. So even the rupees become... Up by 50%, volume-wise last year it was hardly how much?

853 tons.

So last year it was 853 tons, and so the next year, 26, 27, it will hardly touch 1200 to 1300 kgs. So, sorry, tons, 1,100 to 1,300 tons, even if you achieve a 50% increment. So, volume-wise increment might look 10 to 13%, but value-wise increment we are aiming at 13 to 15%.

Okay, okay.

So, that implant, we should easily cross to 100 crore of revenue by 528, which was the past guidance, I believe.

I hope so, but I am sure this year we will be aiming at 1000 plus for sure.

Thank you. Akira, I will request you to come back for a follow-up question, please. Participants kindly limit yourself to questions for participants. Next question is from the line of Deepak from Sundaram Mutual Fund. Please go ahead.

Yeah, thank you for the opportunity. Have I audible?

Yes.

Sir, my first question was on paint. So, if I do a small back calculation, even your non-ABG paint volumes, you know, for Q4 would have grown at roughly between 13% to 15%, which was kind of a declining trend or a flattest trend for the first nine months. So, just wanted to understand, you know, what has changed this quarter, because you did highlight that, you know, one change that happened is IML adoption by Asian paints. So, just wanted to understand how sustainable is this double-digit volume growth non-ABG, which we have seen in Q4, and what is the growth outlook on the volume front for non-ABG clients in FI27?

Yes, you said the reason. The IML adoption by Asian Paints and more and more brands is one of the reasons of us getting back their higher volume of business, and that will, I hope, will continue because their artworks are very critical. If you notice their pails in the market, they have metallic IML, which is a top-class IML to handle both technically and visually. So visually, it gives an excellent outlook, and technically, it is very complex to handle. So I don't think we lose that edge in the next couple of years, and we may continue to gain traction with Asian paints, given their... Because on their commitment, we invested on several new initiatives in the printing and even in the robotics, and they generally very much respect their commitment. So I still look at double-digit growth from Asian prints in the coming years.

Okay, got it. And, sir, as you earlier also highlighted that, you know, in terms of price highs, because of this steep inflation in polymer prices, that we are able to initiate some price highs. Would it be possible to call out how much price highs haven't taken versus, you know, the steep increase in raw material prices?

Completely offsetting the price increase in raw material. It's not any percentage. Whatever is the price hike, they have passed on in their pricing, and they increase the prices accordingly.

Thank you. Deepak, I'll request to come back for a follow-up question. Next question is from the line of Shirish Pradeshi from Motila Laswal. Please go ahead.

Good evening, sir, and thank you for the opportunity and congratulations. My question is specifically on the paint, sir. If we have reported a 42.1% EBITDA per kg, how the paint EBITDA has moved over YOY?

See, I always tell you, Pales and Squarepacks EBITDA is in the region of 32.35 per kg. And what pulls it up is food and FMCC and pharma, overall average. So, I have no detailed discussion, I mean, EBITDA, Turquoise, of each segment, but it will lie in the region of 32, 33, 35.

The reason I'm asking, we have, as you said that, we have passed on the price increases. So, will this EBITDA per kg, despite ABG's growing upward of 60%, will show the upward trajectory in FY287, or will it remain in the same range?

It will definitely remain positively for all the clients, especially ABG in particular, because ABG, we have now establishing Mahad during the current year, and that numbers will keep improving handsomely. Next year, also, we look forward to a strong growth in the pain segment.

Okay. And on the last question on the food and FMCG, I think the mix as the new clients are coming, and you have given the existing client is also expanding their business. So, how we should look at the food FMCG and the number of clients which we have added? Is this number going to exceed FY26 or will remain similar level? In terms of growth and in terms of margin, if you can give some qualitative comments.

Definitely. I'm very confident that more and more number of clients will be added in 26-27 than last year, basically because our North plant has started operations from October-November, and slowly there is a traction that is being created. As I said, in the month of March, we have made some sales worth around 3.5 crores for both QPAC and food together, which was zero last year. So going forward, that itself is indication that 35 to 40 crores of new addition in business can come from north. In QPAC and FoodTogether. So, that is still less than 50% capacity utilization, but will be handsome number new edition. So, in my opinion, 26-27 will have many more client editions in Food and FMCG from the north compared to overall year 25-26.

Thank you. Shri, I'll request you to come back for a follow-up question. Next question is from the line of Raj from Fiden Asset Management. Please go ahead.

Yeah, thank you for the opportunity. My question again is on the volume growth that you have highlighted for 26-27 of around 13-15%. So, I mean, if we are saying that ABG should grow at around double digits plus, sorry, AsianPen should grow at double digits and ABG is growing much faster for us, plus food and FNCG, I think our volumes are growing at 20-25%. So, I just wanted to understand where is the disconnect? I mean, if that kind of growth we are able to see, then FY27 ideally should be much better for us in terms of volumes. So, just wanted to understand.

No, I said the volumes are not 10 to 15. I said 10 to 13 percent volume increase because the pharma numbers will be less. And I said 13% to 15% for the value in terms of value. Having said that, loops is one area where we don't see any major increase in the even next couple of years because it's stagnating market. The industry itself is not growing. It's growing only in single digits, sometimes not even there. So, there we have substantial 17-18% of turnover comes from that segment. So, that segment, I am not anticipating any major growth. A couple of points of growth may come in Castrol, but I don't foresee a lube will be pulling us up. So, what pulls us up is Asian pains and ABG, as you correctly said, because Asian pains growth, Even in this full year, if you take, though it is 17% in Q4, full year it is hardly around C3.5%. So that 3.5% becoming 10% will be a good. Value-add for us in the year 26, 27, we foresee for that. And loop being a laggard, that's why we are aiming between 10 to 13 percent volume growth.

Understood. And steady state, I mean, X of the increase in raw material prices, the realizations for us in paints has been flattish, but now with Asian paints also increasing their IML consumption, plus we are now at a decent scale for ABG as well. So do we see realizations improving or our pricing power improving because of IML in paints, X of the price increase that we take because of raw material inflation?

Yes, that's why I'm positive about the EBITDA growth from 40.7, which we achieved this year, to 42.5 levels. It could be a little better. Let's see how the war and the other economic things play around.

Thank you. Raj, I'll request you to come back for a follow-up question. Next question is from the line of Paaz Gohil from Omkara. Please, go ahead.

Congratulations to the team and the entire Niagin for the performance. Sir, my question is pertaining to the lubricant segment. Do we further foresee or anticipate any loss of volume in coming quarters or we can say that it has normalized at this level?

Yeah, I think you have a very smart question. In fact, I am also thinking it will stay there, because we have no more public sector units to lose, and all the private sector companies value our relation and our quality and the consistency, which is very important. I am not saying it's not for public sector, but public sector has more valuation for pricing than anything else, and it's their policy. And having lost all the PSU business now, we may sustain at the current levels.

Thank you.

A request to all the participants. Kindly limit yourself to one question per participant. Next follow-up question is from the line of Cheraak from Keynote Capitals. Please go ahead.

Thank you for the opportunity again. Sir, just wanted to understand your view related to the ROCs for the company. We used to be a company where we were generating 20% ROCs. Is our target staying back? And secondly, we wanted to understand our working capital days are getting stretched. So what is the outlook on that?

See, working capital stretch is basically you are looking at a higher valuation also because the last three weeks we have been purchasing material at higher price and that has indirectly might have impacted the value to look higher. And the inventory days also have become a little longer because in pharma. One has to keep three months material ready because sudden requirements generally come up in batch quantities for pharma, and their pickup times are a little late, and their payment terms are also longer. Pharma industry has been following the 90-day to 110-day payment cycle. So that's why you might notice that debt hard days and inventory days are stretched a bit. Coming back to ROC, yes, the ROC is leaped by about 15% from 10.2% to 12.4%, and probably it may hit around 13.5% to 14% in the next financial year. And it was 17, 18 percent two, three years ago, I agree. That was when all these greenfield projects have been started. Investments have shot up in the last three years. And these investments start yielding now. This year, I would say, they crossed 50 to 60 percent capacity utilization. But next year onwards, I'm confident it will be 70 plus, and they will be yielding to the bottom line. So, probably the ROC will start looking at around 15% by 27-28.

Thank you. Next follow-up question is from the line of Sarshuva from DSP Asset Managers. Please go ahead. Ravshita, may I request that I need to align and proceed with your question?

Yeah, sorry, sorry, sorry. I hope I'm audible now.

Yes, ma'am.

Yeah, thank you for the opportunity again. Sir, could you just tell us what is the total, what will the total capacity be for FMCG once the four more units come in at the Panipath facility?

Currently, I think it is about 1,200 tons or 1,000 tons. It will become 2,000 tons of food and FMCG there. And QPAC also we're adding a little bit. So it will become 2,000 to 2,500 tons per annum, including QPAC.

And secondly, just on the raw material availability perspective, are we facing any issues currently for polypropylene supplies, and for how long have we covered at this point?

We have well covered for almost two months. That is what is shown in inventory days. So we have that coverage of two months, which is there in physical form also. So material availability has improved because Reliance has started its production on a regular basis from middle of March, and they are indicating and assuring us that there won't be any shortfall. One or two grids, especially in pharma or in little short supply, that is where we are concentrating.

Thank you. Does she have to kindly come back for a follow-up? Next question is from the line of Transkar from Iraya Capital. Please go ahead.

Hello. Yeah, sir. Most of my questions have been answered. I just wanted to understand on the growth perspective. I have answered on... I just wanted to get that you are guided going forward on maintaining around 20% growth in terms of profitability at EBITDA impaired level. So, are you maintaining that or is there any upward or downward region?

I think we'll certainly be there. We are aiming at at least 210 crores EBITDA for next financial year up from 173. Now, that's a 20% rise. I think we are definitely going to achieve that in view of not only the increasing business, but our internal improvisations and efficiency creation, what we are bringing through the consolidation of units. It might, I mean, if things go well, I mean, nothing, further damage happens through this war. We should be looking better than that expected a bit.

Okay, thank you.

Thank you. Next question is from the line of people from Sundara Mitchell Fund. Please go ahead.

Yeah, thank you for the follow-up opportunity. I just had one question on the wall. So, if I look at our growth rates, you know, QOQ, we have done 44% plus, and even YOY, it's a very good number at 30%, which was around 13% to 15% in the first nine months. So, just wanted to understand, let's say, if I had to break down this growth between, let's say, your other plants and Panipat, and how much of this growth is driven by, let's say, new SQ addition or new client addition. Just wanted to have some flavor on the growth breakup of what is leading to such a high growth number and how much of that is sustainable going forward.

In QPAC?

In 10 volts.

Thanks, everyone. See, the number is not 30 percent. It is 15.4 percent in value terms, 18 percent if you include the bulk food packs. So, 18 percent is the number what we achieved in the year 26-27. And why my conference says it can be better is because of our Panipat additional capacities are getting created, and several new client inquiries are being received in that area, North and the region. And we have started adding clients who have started buying from March onwards decent numbers. And going forward, definitely they will appreciate the quality and supply service abilities of Moltec, which they have not seen because of our distance in the last few years. So now with our presence in Panipat, I'm sure we'll be able to add many clients in that region, which will contribute to the increased

Okay, but what about the existing clients? Are we seeing any growth there or is that, you know, majority of the growth is coming only from this Panipat side?

No, no, no. All our clients are growing. You take Milky Mist, you take Hudson, you look at Walco, our quality walls, their numbers are all going up. The ice cream or yogurts, whatever products they sell, their numbers are all going up. Only Cadbury's M2K is stagnant, but for that top brands, all top brands are growing in double digits. So that growth will definitely accrue to us. Apart from that, how we can go beyond that is what I am explaining, is through Panipat.

Okay. Okay. Helpful, sir. All the best.

Thank you.

Thank you. As there are no further questions, I'll now hand the conference over to the management for closing comments.

Thank you all for showing your interest in spending time to attend the conference call today. I especially thank Rajesh Kumar of MK for arranging this call and the operator who has patiently conducted the call in a question manner. I also appreciate people's interest in our company and be assured that we are on a good track. And more and more product range also we are looking at, which may not – I'm not very clearly on the drawing board now, but it will happen during the next three, four quarters, in pharma especially. And we are also looking at efficiencies. To improve cost controls, and now we have created teams of finance and HR admin at all the units who will be directly monitoring and controlling the cost elements closely. With this new kind of managerial outlook and consolidation of units, I think we are on a... Strong wicket to perform better in the coming quarters, and I also hope peace will prevail soon, and all the economies, and especially our Indian economy, will catch up with the speed which it is about to catch, about to reach. So, thank you all once again, and bye-bye. Good evening.

Thank you very much, sir. On behalf of MTA Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.