Pyramid Technoplast Limited (PYRAMID) Q2 2027 Earnings Call Transcript

Hi, everyone. My name is Tamna Khadri.

It's absolutely wonderful. Thank you very much, everyone, and thank you very much for joining us.

Thank you.

Thank you. Good morning, sir.

Good morning, sir. Let's start in 2-3 minutes. We have not joined yet, but we have 2 minutes left.

Good afternoon, Jai.

Jai. Good afternoon.

Thank you.

So, let's start. Yes, I'm now I can hear you, but we do not hear it. So, we have a sound of a sound of a sound of a sound of a sound of a sound.

Hello, can you hear me?

Yes, we can hear you.

So, should we start?

Yeah, let me start the recording, then you start.

Hi, everyone, and a very good afternoon. I welcome you all to Pyramid Technoplast Q2 and H1FI27 con call. Please note that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks pertaining to the business. We have on call today Mr. Vijay Kumar Agarwal, the Managing Director and Mr. Jai Prakash Agarwal, CFO and the Whole Time Director. I now request a microphone.

So I'm going to speak in the mic, speak in the mic. Yeah, Jay, you can start your opening remarks.

Yeah, hi, good afternoon, everyone. A very warm welcome, and thanks for joining us. So for Q2 and H1 financial year 2027, we are here to receive the running calls. So I'll take you through the journey. So our operating performance for the quarter, the progress on our strategic projects, our financial results for quarter two. And the first half and our outlook for the rest of the financial year of 27. So Q2 financial year 27 was a quarter of volume recovery. Installed in production capacity for the quarter was around 20,993 metric tons and volume rose to around 14,798 metric tons, taking capacity utilization. to around 70%, up from 62% in Q1-FI27 to 62% in Q2-FI26. Volumes grew 21% year-on-year and 14% quarter-on-quarter, with year-on-year growth of all three product categories. For the first half, volumes stood at 27,789 metric tonne, at an average utilization of about 66%. Importantly, Unit economics remains well ahead of last year and constant. EBITDA per 10 was approximately 13,718 in Q2 FY27, up by 33% from 10,326 in Q2 FY26 and from 10,082 in Q2 FY25. So, average realization was about 1.61 lakh per ton, up by 22% year-on-year basis, reflecting our pricing, product mix, and the pass-through of raw material cost to the customers. Coming to the strategic developments, so our expansion in Kutch is progressing as planned. We are investing about 20 to 25 crore in a new facility with a capacity of about 10,000 IBCs per month. This facility will strengthen our presence in Kutch and Western India while providing logical benefits through lower freight costs, faster deliveries, and improved customer service. The capex will be deployed in line with actual demand, and once commissioned, the plant will add to the operating leverage of our existing network. So, we have also received government subsidy approvals for our WADA and Bharuch facilities, amounting to approximately 35 crore in total, 24.9 crore for WADA over 10 years and 10.5 crore for Bharuch. We expect to receive the WADA sanction by March 2027 and Bharuch application for sanction will be filed in the next phase. These incentives will effectively reduce the cost of our investments, support cash generation, and improve project economics, ROCE, and payback over the long term. Our WADA facility is in full swing across SDP drums, IBCs, and MS drums, and we expect overall utilization to reach around 80% during this financial year. The focus now is to sustain this production and extract further operating leverage from the infrastructure already created. Our green energy initiatives are also contributing meaningfully. The 6 megawatt solar plant and 2.25 megawatt in Maharashtra were commissioned in October 2025, followed by an additional 5 megawatt in Bharuj in February 2026, with further 1 megawatt at Bharuj plant in next phase. We have achieved approximately 3.89 crore of savings in this half-year financial year 2027. And the full 14.25 megawatt capacity is expected to deliver around 15 crore for annual savings. The total investment in our solar project is at 60 crore. So about four years is the payback, what we are estimating. Similarly, our recycling plant, commissioned in October 2025, was set up with an investment of around 8 to 10 crores and an expected payback of about 2 to 3 years. The plant generated 33 lakh of EBITDA in Q2 FY27, and we estimate its FY27 EBITDA contribution at around 2 crores. Beyond the savings, the facility reduced plastic waste and strengthened our ESG credentials also, in line with India's sustainability agenda. On the financial front, our revenue grew by 48% year-on-year to 38 crore in Q2 FY27. And total income include other income was around 238 to 48 crore. Growth was driven by both higher realization up by 22% per ton and higher volume up 21% of the 77 crore increase in revenue. Improved realization contributed about 43.6 crore. Volume and product growth about 24.9 crore and trading income about 8.7 crore. Polymer drum tonnage rose 5% year-on-year basis and 16% quarter-on-quarter. IBC units grew 17% year-on-year basis and MS drum tonnage grew 73% year-on-year basis. Our value-added IBC business contributed about 32% of the revenue in this quarter Q2 FY27. Our customer base remains well diversified with over 500 customers. Our top customer accounts for about 6% of the revenue and our top 10 customers together for about 29%. On the front of GP gross profit rose about 28% year-on-year to 55.3 crore. While gross margin remained at 23% as raw metal cost rose in step with price increases. EBITDA grew 61% year-on-year to 20.3 crores with margins at 8.5% compared with 7.8% in Q2 F526. Cost discipline supported this operating expenditure, including raw material rose about 14% year-on-year against revenue growth of 48%, and employee costs were broadly flat at 6.2 crore. So, PAD grew by 54% on year-on-year basis to 9.5 crore, with margins at about 4%. PBT rose 53% to 12.5 crore, even as finance cost. It has increased by 147% year-on-year basis and depreciation by 37% year-on-year basis increased with the expanded capacity and the solar investment. For the first half, revenue grew 42% year-on-year to cost 60.5 crores. By segment, polymer drums contributed about 204 crores, IBC about 150 crores, MS drum about 64 crores, and other operating income about 42 crores. Gross profit rose 23% to 106.7 crore and EBITDA grew 55% to 41.6 crore with margins improving to 9% from 8.2% and PAT grew by 42% to 20 crores. For F527, our objective remains to deliver approximately 15% revenue growth and improve EBITDA margins towards 11% to 12% with H1 revenue up to 42%. We are well ahead on growth. On margins, H1 stood at 9% up from 8.2% a year ago and we expect 4 levers to drive further improvement in the second half. Higher utilization. Full benefit of capital solar savings, a growing contribution from the recycling plant, and operating leverage and product mix at WADA. We continue to follow disciplined approach to capital allocation with the major phase of capacity and efficiency investments now behind us. FI 27 capex is planned at approximately 20 to 25 crores, down from about 90 crores in FI 26, primarily towards the Kutch expansion and deployed in line with actual demand. To summarize, the last phase was about building capacity. FI 27 and the years ahead are about building that capacity and converting it into stronger earnings and revenue growth. and returns. With WADA in full swing, Kach adding future capacity, our solar and recycling units' initiative contributing, and a healthy balance sheet, we believe Pyramid is well positioned for the next.

Thank you for taking the call. So thanks for your remarks, sir. Request the participants to please raise their hands for Q&A round. So we'll wait for a minute for Q. Kindly raise your hands. So, the first question is from Kumar Saurabh. Please go ahead.

We are progressing, but we are not yet close there. Do you have any comments to add on these two things? Hello, sir. Please go ahead, sir.

Your strategy will be paid for profit in this year.

Thank you very much. Okay, okay, okay. And sir, second question was, if we look at our end-user industry on chemical, everybody is posting good number, but the price rise is not coming, but our number is rising, which is a very good signal that our end-client is not coming. Do you think the volume growth will come back to the chemical industry, or any comment on the end-consumer industry?

Thank you very much. Oh, my God.

So, compared to last one year, things look better. Thank you. Got it. Got it, sir. That's all I had. I'll come back in queue. Thank you and wish you a happy Diwali, sir.

So the next question is from Sushant Soni. You can unmute.

Yes, sir. Thank you for taking the question, sir. So, my question was, which is the gross profit per kg, if we look at the last five years, obviously, we're good at the volume and the realization is a bit off, right? Because it's never up or never down, but it's not on you, to be really honest. So now, the gross profit per kg, we are taking extra conversion to offset the higher working capital.

Thank you very much.

Okay. And what do you think about this steady state, sir? Depending on this state, now it's 33, 35 rupees per kg in blended. And if I look at it historically, it's 35 rupees. So do you think that even if prices come down, this would be around that 35 rupee angle?

Yeah, after that, we'll get that price down.

The second question was just on other expenses. This is a lot more, despite solar benefits, but if I look at it in terms of per kg, So, if you could just throw some more light, that would be really good.

Hello? Yes, sir.

So, we are targeting pan-India businesses. So, in this quarter, what we have done is we have approached long-route customers also. Plus, we have incurred some employee expenses. Now, every employees are back. So next quarter will be full strength. Next two quarters. So, that is where we can see some kind of jump in other expenses. Otherwise, there is nothing extraordinary.

But, sir, operating leverage should come in, no? Because if we saw it earlier, it is 17 per kg, but now it is 19 per kg. So, some of it, yes, you are right, that there is extra transportation.

I am showing you that it is because of transport costs. We were doing local supply. So the idea

is, that is why we are planning a expansion so that we can save on the transportation cost, which will benefit the company at the end.

Got it, sir. Because, sir, for us to reach EBITDA margins of 10-12%, apart from subsidy, sir, because if you want to remove it in core business, if you want to reach 10-12%, getting operating leverage in other expenses is important, right? Because you are already getting benefit of 4 crores currently, which might, on a half yearly basis, right? Which might go to 7.5 crores. So, that will increase. You should have benefit from other expenses per kg. Like transportation cost, are we getting it from consumers, which has access to transportation?

Yes, yes, we get it. We get it. When we give the price, we get the price of the transport cost.

Got it, sir. So, then, it should be less than that. It should be less than that. It should be less than that. I'm thinking a little bit different. Because if you take the transportation costs from your consumers, then it should be less than that per kg, right? What do I do, sir, at the moment? Sir, if you can just see how we can improve on the other expenses.

By the time, we don't have to see this in the final round. Let me tell you and tell you.

Shrishan, revenue and EBITDA per ton both goes up, right? So you have to look at EBITDA per ton only. The cost is also going up and revenue per ton is also going up.

Honey, I'm doing it per kg, so like other expenses per kg.

Yes, that's okay, but revenue per kg is big, and EBITDA per ton is big, so you just have to focus on EBITDA per ton, or EBITDA per kg, whatever you are looking at, that will give you a real picture.

Okay. Okay. And, sir, just one last question. The one megawatt that was released in solar, sir, when do you think commissioning will be?

It is almost started. I mean, our installation has been charged on the end. So, hopefully, by next month, we should start getting that benefit also.

Okay, sir. Thank you so much, sir. Best of luck and happy Diwali to you, guys.

Thank you, sir.

Requesting everyone, requesting everyone to raise their hand in order to ask any question. So the next line of question is from Kumar Saurabh. You can unmute yourself.

Sir, my question is, if we look at EBITDA per ton, there is a significant increase compared to last quarter, whereas the margin has decreased compared to last quarter. So my question is, should we even consider margin in this business or should we consider EBITDA per ton? Because if there is a pass-through of, you know, the cost increase, because you have also shown a realization increase. So, if there is a pass-through of any kind of price increase, should we look at margin or should we look at EBITDA per ton as a better guidance? Okay. Okay. Do you think this is sustainable or it is more because of the price?

No, not because we are constant on this and coming quarters also will be constant and we will be improving further.

Okay, okay, and sir, cash flow, which is H1 cash flow, last year negative, this year negative. So, this cash flow is in the year end. How does it get out of the year?

No, no, no, no. Now, when we were taking the price to Mars, we were able to import. When the hormones started, we were able to import. So, the total purchase is 80% to local. So, first of all, we were able to import.

Okay, okay. Okay, sir, that's all I had. Thank you.

So, requesting everyone to raise the hands in order to ask question. Next question would be taken from Alok Trivedi. Please unmute, Alok. Hello.

Yes, sir. I had two questions, sir. One was that in H1, our EBITDA margins were about 9%. And for FY27, we have given the guidance around 11 to 12%. So, sir, what would be the bridge and how much solar, recycling, mix and the operating leverage? Thank you very much.

Bye. 9.5% from our business plus 1.5% of our subsidy will come, so we don't understand what will come from the 11% of our business.

Plus recycling business is approaching, it is picking demand now. We are doing a lot of quantity, this quarter we have increased, next quarter also we are pushing further more increase in capacity. It will add on and it will keep on improving our EBITDA level.

Okay. Okay, sir. Noted. And, sir, another question was that the gross margin has been down 23.2% since last year. And how much raw material is passed through from contractual and how much is it from the lag? And what happens to the margin if the polymer price falls?

The next line of call is from Saket Kapoor. You may unmute second.

Hello, sir. Hello, sir. Hello, sir. Firstly, sir, this quarter-on-quarter, which we are seeing the other expenses of 4 crores, how do we understand it? What is this increase from current?

Thank you. the एस्सकोल देखा था दो कोर्ट से टांसपोर्ट बड़ा है इसमें में इसी

के करेंट से इसर हमारा यह बीटा मार्जिन भी डिक लाइन जिख है क्योंकि टैनेज भी इंप्रूवगे है विद्नेश के लिए

अधा-1 पर सिंट जो देख रहे हैं वो I'm sorry, everyone, and welcome to the call.

Sir, the utilization levels are 60-70 percent. How do you see the ramp-up in the H2 and what can be the average for this year?

The volume is now growing, and the growth is now growing, and the growth is now growing.

Okay, so the utilization levels are improving, you can see.

Improve, improve, improve.

This is our target target.

And it will be spreading on 10 years.

Yes, sir, Salana, you will see 2.5 crore benefit in March.

Yes, sir. In March, it will be a total of 1,5 crore.

And then, in March, it will be a total of 1,5 crore. It will be a total of 1,5 crore. We also invested in a machine that you had to invest in the paint industry for the customer. What is the update? What is the update of the machine?

Okay, that machine is running full-fledged.

It is surprising that, without a very short notice, it is running full-fledged now.

My plan is coming. That machine has come from above. It has started full-fledged.

Okay, Jaye-sabh, you are saying something? No, no, we might add a few more machines coming here.

Okay, so what is the potential of this? What revenue we can see? How will the margin profile remain?

Look, if you put one machine, it's about 70,000,000,000,000,000,000. In the last month.

Come again, sir, what do you want to say about 70 lakhs of revenue has come from that machine. So this is right now going on. And if everything goes well, market is open for us.

Sir, if we have a EBITDA in which you have 21 crore in the first quarter and 20 crore in the second quarter, so it's 40-41, and now we have a ramp up for the next half. So what should be factor in terms of the EBITDA trajectory, sir, on a ballpark way number? I'm going to talk to you. I'm going to talk to you. Hi, sir, we have made a lot of changes in the presentation, so we have made a lot of this format, so we will continue to keep this data points in clarity. Sir, if we have a cash flow point, please do a little clear. Hello? Yes, sir, I am doing this, but it is not a second. Good morning, everyone. Yes, sir, if you go to the cash flow statement, which we have submitted in the exchange, then we are showing interest expenses of 3.46,000,000. Because, sir, the number of 7 crore should be something. And our operating cash flow will be better than 3 crore. I think that we have something that we have done, or I am doing something that I am doing.

I'm going to check and answer your question, sir, how do you answer your question? Please give me a check and answer your question.

Thank you, sir. Our borrowing, long-term, is increased by 10-1 crore in the first half. What is the schedule for this year? Where will we stay in the next year? Okay, sir, overall, your presentation is sufficient. I've got data points. I'll be quick to join and review my questions. Oh, okay. I'll give you five minutes.

The next line of call is from Sushant Souni. Sushant, feel free to unmute.

Thank you, sir, for giving the opportunity again. Sir, I just wanted to check one thing. Sir, I just wanted to check one thing. Sir, I didn't know a little bit about vision. Because if you look, your growth is very good and already is 70%. And you said that you can go to 75-80%. Obviously, you are also expanding in IBC. Just in IBC vertical, if I think most of the sales are in chemical vertical, So, there is no plan for pharma and food grade, where maybe there are some regulations, but maybe customer stickiness will also be there.

Thank you very much.

Our plant is already approved for food industry, so that's not a challenge, and we are already doing business with pharma,

their ancillary industries, and food industries. What does pharma mean? I don't do it in the business, so I don't speak pharma.

Okay, sir. Thank you, sir. And, sir, how much of our food is in IBC? Do you have any ideas? And how can we grow it? Maybe there will be chemicals in there?

I don't have a different number. I'll do that too. I don't have to say anything about food. I don't have to say anything about it.

Okay, sir. This is very helpful. Got it, sir. And, sir, this transportation cost, as you were saying, you are sending in South, so the transportation cost has increased, so, sir, do you have a plan to go to South? Because, obviously, there is a lot of volume.

I am thinking, sir. Work in progress, sir.

I am thinking, sir. Got it, sir. And, just one last question. How much time will this capacity increase in VADA? Because, you have everything planned together.

We will talk about it after March.

Yes, sir, we will start with March because you told us that you have to do it after March. But how much time will you go after March?

It will take 6 months.

It will take 6 months. Okay, sir. Thank you so much, sir.

So, the next line of question is from Preeti Agarwal.

Yeah, thank you so much for the opportunity. I was thinking that our utilization level is 70% as against 80% of FY27. So, what is the demand and revenue visibility ahead?

There is demand, madam. There is a demand. There is a sale. We are increasing the volume of the sales. We are increasing the demand and the volume of the sales. We will reach 75 to 80. We will add some machines.

I understand. And H1 revenue is 40% year-on-year-up, and FY27 guidance is 15%. Is this guidance a little conservative for FY27?

Thank you very much.

Okay, sir. Thank you.

So, the next line of question is from Saket Kapoor. Saket, you can unmute.

Sir, one of your cash flow was related to the cash flow. You can also note that the tax payment is 4.80,000,000. So, sir, this is our refund factor. I wanted the advance tax number, which you have given for the first half. So, this is a detail you will provide. When you will have cash flow, you will be able to give it.

How much is the advance tax?

How much is the advance tax? First, how much is the advance tax? The advance tax is the advance tax. Mr. Jaye Saab, you have focused on recycling, and you have told us that it will remain value, and the margin will expand. So, what do we expect in that process? What do we expect to do with this improvement?

In the recycling process, our people have reached 25 percent. I am a 75% of the money. I think that within 3-4 months, we will go there.

After this, we will see the increase in profitability. How much of the profit is going to be in this year?

We will see how much of the growth is going to be in this year. So, we will see the growth of the cycle of the plant. 9 crores. You do. But the next year, the next year we have seen the earnings from the next year. The next year, the next year, the next year, the next year.

What we have envisage from the solar facility benefits in the power of that is all flowing into the bottom line as per our plan.

Almost. I have 90% of people achieved this. It's 89 percent, 100 percent, but it's not even worth it. It's 80 percent, but it's worth it.

Yes sir, on my side, sir, tell us about the rest of the question. Overall, you said that month on month, we are seeing our demand. Growth, growth, we are seeing the volume. So that is all alluding to the capacity enhancement. So there is nothing that we have seen in the business sentiment.

The price of the price of the price of the price. So, this time you can see the volume growth. And now you can see the advance tax. 2,25,000,000,000.

Hello? Yes, 2,25,000,000. Okay, sir, because the number of cash flow is mentioned, it's just 5 crore.

The first one will be able to do it.

It will happen.

It will happen. It will happen. It will happen. It will happen. I will be able to do it. Thank you.

So for any further questions, please raise your hand. In case if there are any questions, please raise your hand. As I can see, no one has raised their hands. So, thank you for your time, everyone. I request the management to give the closing remarks.

Well, see, our performance is increasing on quarter basis. And it is constant. More importantly, it is constant. So, we see a very healthy growth coming up in next quarter. So we, as a pyramid coordinator and as a shareholder, I would request to keep supporting us, keep joining, keep teaching us, and keep learning. Thank you.

Thank you so much.

Have a good day. Happy Diwali, sir. And I will become very happy Diwali. Thank you very much.

Thank you. Happy Diwali, you too. Happy Diwali. Let's go. Dhan Lakshmi, you have a good news and a good result. So, let's move forward. Okay, thank you. We'll close the call now. Thank you.