Tinna Rubber and Infrastructure Limited (TINNARUBR) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Tina Rubber and Infrastructure Ltd. Q1FI27 Earnings Conference Call. 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 the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Tana Kapoor from GoIndia Advisors. Thank you and over to you, ma'am.

Thank you, Shruti. Good afternoon, everybody, and welcome to Tina Rubber and Infrastructure Limited's earnings call to discuss Q1 F527 results. We have on the call Mr. Gaurav Sekhri, Joint Managing Director, Mr. Subodh Kumar Sharma, Director and Chief Operating Officer, and Mr. Abhay Kumar, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must therefore be viewed in conjunction with the risks that the company faces. May I now request Mr. Baurav Sekri to take us through the company's business outlook and financial highlights, subsequent to where we will open the floor for Q&A. Thank you, and over to you, sir.

Thank you, Shana. Am I audible okay?

Yes, sir.

Good afternoon, everyone, and thank you for joining us today on this call. Our financial results and earnings presentation are available on our website and on stock exchanges. I believe you have had a chance to review the same. I will briefly take you through the strategic updates, post which my colleague Subodh, our COO, will take over and give details about the operational and financial performance highlight for the quarter. We are delighted to share that we have commenced FI27 on a very strong note, delivering our best ever quarterly profitability. During the quarter, we achieved record financial performance with EBITDA exceeding 30 crores, PAT surpassing 20 crores, EBITDA margins of over 21%, and PAT margins of more than 13% on both. Stand alone and consolidated basis. This performance is the outcome of our sustained focus over the past few years on enhancing profitability through operational efficiencies, cost discipline, and increasing share of value-added products. We are pleased to see these strategic initiatives translating into tangible results, reflecting In our margin expansion and continued commitment to creating long-term value for all stakeholders. The following strategic milestones underscore the significant progress we have made towards achieving our Vision 29 objectives. We currently have a tire-crushing capacity of 185,000 pounds per annum in India and continue to strengthen our processing capabilities. As part of our expansion roadmap, we are on track to increase this capacity by 27% to 235,000 tons per annum by FI27, further enhancing our operational capabilities and supporting our long-term growth strategy. During Q1 of FI27, we have executed 27 crores of capex as part of our broader investment plan Now, around 100 crores. We continue to strengthen our focus on responsible growth with our FI26 TUV verified lifecycle assessment validating over 10.37 million kg of CO2 emissions reduction across our two fully integrated manufacturing locations. The integration of renewable energy has enabled emissions reduction of up to 58.7%, with further improvements expected through increased adoption of captive renewable energy. Our transition towards cleaner energy continues to gain momentum, with renewable energy contributing 51% of the company's total power production in Q1-27. Supported by a more than three-fold increase in fuel capacity from 1.23 megawatt to 4.48 megawatt, and a strategic third-party green energy sourcing initiatives, which have resulted in savings of 1.19 crore during the quarter. We have successfully commissioned rooftop solar plants at our Gumadipundi Tamil Nadu facility of 999 kilowatt power in June 26. Our Varale Maharashtra facility of 2218 kilowatt power in July 2026, further strengthening our renewable energy footprint. We had tension in the past and we are renewing our commitment to innovation by allocating 5 crore rupees towards research and development in FI27. During the year, We have established a dedicated R&D team focused on developing technology for high-performance, new-generation grease-hackled rubber materials and engineered plastics, advancing value-added applications for recovered fiber from passenger tires, further enhancing the PPO quality to drive greater value addition. Turning to project development, following are some key updates. The ongoing 3,500 metric ton per annum MRP capacity expansion is progressing as planned and remains on track for commissioning by Q3 of FI27, increasing the company's total MRP capacity to 20,000 ton per annum, which it is our belief is the largest capacity of MRP in the world. The tire pyrolysis oil facility at Barale. Commenced trials in Q1 of FY27, and it is expected to commence commercial sales in Q2 of FY27, with operational stabilizing by Q3 of FY27. The RCB production is scheduled to commence in Q3 of FY27, followed by operational stabilization and commercial sales by Q4 of FY27. Our DC, MB division. Continue to witness strong momentum in Q1 of FF27, with revenue increasing 3-fold to Rs. 12 crores compared to only 4 crores in Q1 of previous year. The MPCMB business is contributing 8% to the company's top line, in line with the indications given in the earlier calls. The division's initial 6,000 ton per annum capacity operates. It's operating at 82% utilization, while the commissioning of the expanded facility in Haryana has increased our total capacity to 18,000 tons per annum. With enhanced manufacturing capabilities and strong business momentum, this division is expected to contribute 10% of FI27 revenues. We have also successfully registered on the government portal. As an authorized recycler, allowing the company to generate EPR credit from the plastics recycling business from 1st of April 2026. I am pleased to also share that the TP BillTech business continues to scale up, with the Kolkata plant commissioned in Q4 of previous year progressing well, and the utilization expected to improve over the coming quarters. The business is in advanced stages of acquiring land in western Maharashtra for a new manufacturing facility to expand construction chemicals capacity and introduce new products across construction system applications. We are targeting growth of over 30% in this business and cross the milestone of 100 crore in revenue in FY27. Turning to our international projects, TINA continues to strengthen its global presence with the establishment of its wholly-owned subsidiary, TINA Rubber Chile SPA in Santiago, Republic of Chile. The initiative is aimed at enhancing the company's global ELT sourcing network and expand its international recycling footprint. Global Recycle LLC Oman. has delivered a good improvement in Q1FI27, generating revenue of approximately 9 crores and achieving EBITDA margin of 8.53 percent. We expect this to improve in the coming quarters. While profitability had been impacted in the recent quarters by elevated raw material costs and the ongoing Middle East crisis, the implementation of corrective measures In including raw material import into Oman has led to a meaningful recovery in margins and overall profitability during the quarter. Bordlai Investment Pty Ltd. South Africa continues to progress as planned. Phase 1 CAPEX has been completed, operations have commenced, and exports of semi-processed materials has already begun. We expect to break even by Q2. FY27. Phase 2 in South Africa is focused on full-scale tire recycling, and this has also been initiated where equipment to manufacture and process 9,000 tons of tires to produce crumb rubber is on the way to South Africa, and we expect to start production in Q2 or Q3 of the current financial year. In Saudi Arabia, land has been allocated to the company. We hope that we will commence the construction of this facility towards the end of this calendar year. Of course, this is subject to normalization of the geopolitical situation. We remain focused on delivering our Vision 29 objectives through capacity expansions, new product development, sustainability-led investments, and on expanding our global footprint. We are targeting presence across 10 locations and revenue of 1,000 crore by FI 29, while maintaining 25% plus revenue CAGR, 33% plus profitability CAGR, and EBITDA margins. Over 18% and ROC exceeding 30%. We believe these strategic initiatives position us well to deliver sustainable growth and create long-term value for our stakeholders. With that, I would like to hand over to Subodh for his insights on operational and financial performance. Over to you, Subodh.

Thank you, Gauravji, and good afternoon, everyone. Am I loud and clear? I would like to reiterate that our record quarterly profitability in Quarter 1 FY27 marks a significant milestone in our growth journey. It reflects the successful execution of our strategy, continued operational excellence, and our unwavering focus on creating long-term value for all stakeholders. Let me briefly walk you through our operational performance during Tire fishing operations remained resilient in Q1 FY27, with capacity utilization at a healthy 88% in India and 78% in Oman. India recorded a strong 35% YUI growth in tire fishing volumes, while operations in Oman were temporarily impacted by the West Asia conflict, resulting in relatively subdued volumes. Sequential volumes for India moderated by 10% due to lower cam requirement following softer consumer segment demand. The production remains stable with an increased share allocated towards higher value products such as micronized rubber powder and reclaimed rubber. In quarter 1 FY27, MRP and reclaimed rubber volumes grew strongly by 28% and 37% on YOY basis, supporting to robust performance of the industrial segment. In Q1 FY27, the infrastructure and industrial segments recorded volume growth of 33% and 27% respectively, while the steel and consumer segment witnessed a decline in volumes. The industrial segment achieved a strong 58% bio-wide growth in revenue. Exports volume delivered robust 46% bio-wide growth despite global economic headwinds supported by a healthy auto pipeline. Rising raw material cost and increasing focus on ESG goals within the entire manufacturing industry continued to drive demand in the industrial segment. The infrastructure segment delivered 7% revenue growth in Q1 FY27, supported by increased bituminous road surfacing activity. The West Asia conflict led to temporary bitumen supply shortages and elevated prices, creating stronger demand for rubberized bitumen. While our bitumen emulsion business was impacted by supply constraints and subdued market demand, the long-term outlook for rubberized bitumen remains robust, supported by government continued focus. The company also secured a 15,000 tons of rubberized bitumen processing powder. This segment was impacted in Q1 due to a sharp increase in raw material prices following the West Asia conflict along with import-export disruption affecting the availability of key imported raw material to the turfing industry. The significant rise in binder and synthetic grass prices nearly threefold in some of the cases led to delay in tracks and turfing project execution. This segment will bounce back once these scenarios stabilizes. Steel segment delivered a stable performance during Quarter 1 FY27 with revenue remaining steady despite a margin and decline in volumes, supported by improved realization following price corrections. We further strengthen our market presence by securing the exclusive distributorship for Zeebo Tha Metal Technology China for steel abrasive across India. With customer transition underway from Q4 FY27, we remain confident of achieving approximately 60% volume growth in our steel abrasive business during FY27. Coming to financial performance, achieved record quarterly profitability with EBITDA exceeding 30 crores, PAD surpassing 20 crores, EBITDA margin above 21% and PAD margin above 13% on both At standalone and console level. On a standalone basis, quarter revenue increased by 18% and EBITDA and FAT margin expanded by 638 bps and 471 bps on YOY basis, which is a further validation of our robust performance. At the console level, revenue increased by 20% and EBITDA FAT margin improved significantly by 575 bps and 416 bps on YOY basis. Precycle Oman reported a pat of 0.34 crores in Q1, marking a 31% increase over FY26. While profitability had been impacted in recent quarters by elevated raw material costs, the implementation of corrective measures, including raw material import into Oman, led to a meaningful improvement in profitability during the quarter. Baudela and Saudi Arabia reported have combined loss of aerosols. 53 lakhs owing to initial start-up costs. The inventory of accrued EPR credits up to 31st March 2026 was fully monetized within Q1 FY27. Looking ahead, we remain confident in our growth trajectory with investment and capacity expansion, product diversification, and international markets beginning to deliver results. Backed by a strong operational foundation, robust project pipeline, and clear strategic direction, we are well positioned to sustain momentum and deliver on our vision 2029. I would now like to open the floor for question and answer. Thank you, and over to you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Beeraj Ram from 361 Capital. Please proceed.

Hi, sir. Congratulations for a great set of numbers. Thank you for taking up my question. So, first one is you've spoken on increasing realizations due to this between prices. So, how much of this increase in EBITDA margins has been factored in because of inventory gains? Do we see any inventory gains this quarter?

Hi, Gaurav here. Are you inquiring about if there was any contribution to margin because of gain in inventory relating to bitumen prices?

Yeah, not only in bitumen, but overall, is there any contribution of inventory gain across all segments?

Very marginal. Nothing meaningful to report back to you.

Okay. So last year, you've been guiding for around 18% EBITDA margin for the whole year, and that's your long-term target. So do we see any normalization of this margin as we go ahead and 2Q and 3Q?

See, we have been achieving around 17% and guiding that our aim has been to achieve 18%. Of course, that has been surpassed and we have delivered more than 20% EBITDA margin. A lot of that has to do with some optimization we have done in our raw material costs. We have spoken in the past about how we have increased optionality of feedstock to control our, you know, raw material prices better. That strategy has played out well. Also, Going more towards value-added product sales has been our focus. We have always mentioned that. That has played out quite well. So a lot of these changes are systemic in nature. They are not one-off. And, you know, I hope these margins, you know, are sustainable. There will be some increased costs, you know, down the road. In a growing business like ours, because anything new you start, there are always, the costs are, you know, front-ended, like the project in Oman and, sorry, not Oman, but in Saudi and also in South Africa, where we are right now incurring some costs for revenues and all have not yet started. So that is the nature of the business. Because of that, there will be some added cost booked. You know, when you blend that with the efficiencies, overall margins of 18% to 20% is what we believe can be delivered in a business like ours, and that is what has played out well in Clue 1.

Got it. Sure. And last question is, sir, is it possible to share segmental working capital Thank you very much.

Segmental working capital days, we won't have ready to give you. We have our blended working capital days is 50, and that is, you know, fairly consistent, actually, for our business over the last two to three years. There's, I think, hardly 5% movement in this number, plus or minus.

Okay.

Yeah, thank you.

Thank you. Participants who wishes to ask a question may press star and 1 on their touchtone telephone. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. The next question is from the line of Bipak Poddar from Sapphire Capital. Please proceed.

I'm audible, sir. Thank you very much for this opportunity. So just wanted to check, I mean, you had accrued EPR credits that you monetized this quarter. So what's the quantum? Can you throw some light on that?

We have monetized around 100,000 units and converted it to cash in this quarter.

And what, I mean, 1 lakh units, I mean, at what price per unit?

Around 25. It is all trading at the floor price, which is around 2,500 rupees a unit.

2,500 rupees per unit? Rupees per unit. So we sold about 1 lakh unit, you mentioned, right? Yes. So around total 25 crores is what we got, right?

Yes, that's right.

So this 25 crores, I mean, this 25 crores goes straight to your EBITDA, right?

No. We had accrued these already in previous years, as and when our EPR credits start reflecting on the portal of the government, we accrue them and they fit as inventory. These have been monetized. That is what has happened.

But in terms of P&L, did the accounting have been done as per particular quarter?

Yeah, so the impact on P&L has already been taken in previous years. This is just an exercise of monetizing it, this quarter, converting it to cash.

Understood. And going forward, I mean, how many units per annum, I mean, we expect to generate for this EPR thing?

See, our revenue-wise, I can tell you, and the contribution of EPR basically comes at the PPT level for us. That number for us is approximately 25 to 30 growth annually, and this is a fairly stable number now for the last couple of years.

So, 25 to 30 crores per annum, right? That's the contribution of EPR that we get at the PBT level on an annum. That's correct. That's correct. Okay, understood. That would be it from my side. I wish you all that. Thank you so much.

Thank you. Participants who wishes to ask a question may press star and one on their touchtone telephone. Before we take the next question, we would like to remind participants that you may press... Star and one to ask a question. The next question is from the Lion of Mihir from Aquarius. Please proceed.

Yeah, hi, thanks for taking my question. So my question was basically around the global expansion piece, also what we are doing, like recently we announced an investment in Chile as well. So just getting some sense here, like Saudi project is something where we have been investing in it as yet to start. And so just something like how is the thought process here and why Chile now? Like first, why not, you know, increase our capacities in South Africa and Saudi and then move to some other jobs?

See, there are many reasons which are understood, deliberated, because of which we take a decision to enter a new geography, especially a new country. And, you know, those details are confidential, and we will not share that on OpenPAP platform. However, you know, what I can share with you is that We have reached a certain operational capability in the Middle East, and Oman being a small country, there was less scope of expansion, and Saudi became a compelling proposition for us. It just makes a lot of sense, because we already have a base there, and the operational parameters are very similar to Oman. And South Africa and Chile are both very interesting geographies from a securing end-of-life tire supply and making our sourcing more robust and protecting our business from any, you know, incidences or, you know, global events and things like that. It's a way of hedging our business. So this is why we are looking at these geographies.

So, sir, going ahead, say, next, so, bit of a longer-term question, but see, in two, three years, will we see a massive scale-up in terms of investments there, or our target continues to be that 100 crore, two-year kind of a capix?

Our capex target, we have mentioned earlier as well. We are looking to spend around 100 crores in FI27 and FI28 together. In my opening remarks, I mentioned we've already spent 27 crores in Q1. In regards to how much and to what extent will we be active in each geography, that's part of the core strategy of the company. What I can share with you is that these are all You know, businesses outside India, they add a certain hedge, a certain robustness to our core business, which is India. Our focus, our core investment will remain in India for the foreseeable future.

Sure. Okay. And so broadly, circling back to the domestic piece of business, a very strong set of numbers is what we have reported. But going ahead in terms of, say, growth trajectory in infrastructure and, you know, both the industrial and the infra, how are we seeing the traction currently given the, you know, backdrop of the current West Asia situation? Like you mentioned that we have got some benefits of, you know, moving to rubberized bitumen and all. But overall on the infrastructure segments, do we see some kind of a slowdown yet or are we seeing some kind of improvement on track in quarter two now? And we are also getting into a low base of last year.

I think your question is specifically about the impact of global events on the infrabusiness. And while, you know, there has been some impact to the road construction activity in India because of the disruption of supply of, you know, bitumen, for example. You know, our country is dependent in perpetuity to imported bitumen for our works. We don't produce enough, and we simply cannot produce enough. So while that did impact us in some localized way in some projects, but at the same time we saw increased awareness amongst contractors for use of rubberized asphalt to make, you know, higher quality roads and use less bitumen in their projects. So, overall, I believe that this reception has only benefited our business.

Okay. And, sir, in terms of industrial, the growth was mainly driven by, say, MRP, or we've added some onboarded some new client as well, which has led to this kind, you know, we have reached around 45-46 crores in the quarter. So, is it some customer addition as well, or it is the new MRP or something like that?

We are adding customers all the time. We are also increasing our production of MRP, which has also happened in Q1. So it's a combination of factors. Our exports have grown 46% in Q1 year on year. So these are all contributing factors to the results that we have shown.

Okay, sir. So just finally, last question here. So we have been increasing the MRP capacities and, you know, across space, we have been increasing the capacity and seeing our margin profiles as well have been quite lucrative. So just one thing what I wanted to understand here is that what makes it, you know, difficult for the competition to enter the similar segments or a new player to enter the similar segments what we are in, just seeing at the margin profiles of the business.

See, there is multiple things. Nothing is, to be honest, that difficult if one puts their mind to it. I mean, in 2015-16, when we started MRP from scratch, our sales were not even 100 tons a month, and now our capacity is going to be 20,000 tons per annum. But there is a lot of learning. There is technology efficiency, which I believe we are excelling in. There is, you know, a lot of effort and convincing needed for onboarding customers. It's a fairly long process where I believe we just seem to be more resilient than our competition and more committed. And this is, you know, this is what has brought us results.

Got it, got it. Okay, sir. Thanks.

Thank you. The next question is from the line of Kushal from Asian Broking. Please proceed.

Hello. Yes, sir. My question is regarding other expenses. It has increased by around 5.4 crores from previous quarter, March 2026. What component has increased? I just wanted to know that.

I think we will need a little bit of time to give you that detail. If you send us an email, we can reply you better. But our other expenses, you know, may have increased because of, you know, our, you know, expansion of businesses outside India. And I think once again, our CFO may have a little more clarity to give. See, our other expenses table, as I see it, it was 29.85 crores in Q4, and now it is 30.58. Yeah. That's comparison to previous quarter. Does that give you clarity or no?

No, sir. 29th cruise was in which quarter?

Previous quarter. Q4.

Okay. Here it is showing 27.19th cruise in previous quarter. Take care. Thank you. Okay, thanks.

Thank you. The next question is from the line of Arsharay Seth from Venture Securities. Please proceed.

Yeah, good afternoon, sir. Congratulations on a wonderful set of results. There would be two questions from my side. Firstly, on the 100 cores that were outlined as KPEX over next two fiscals, how much that would be capitalized over FI27 and how much of that would be capitalized over FI28? Can you give a breakdown of that? And I'll ask my second question later.

We would be capitalizing around 60 crores.

Okay. And secondly, sir, what is the targeted blended utilization? I will be looking at once all the plants are operational across India, Oman, and South Africa, and these plants are operational and scaled up. What is the blended utilization I will be looking at at the closing of this fiscal?

So, hi, Subodh here. So, on the capacity to utilization, you're asking?

Yes, sir.

Yeah. So, currently, also, we are, you know, utilizing our capacity for tire recycling close to 88% in India alone. And, but the value-added product like MRP and Reclaimed Rubber we are growing. So, capacity utilization on PCMP business side, that will reach somewhere around... Around how much? 60% this year and will contribute 10% to our revenue of this site. So, combining everything together, we feel we should be somewhere around 75-80% of the past utilization.

And that would be across all geographies? Okay, okay. Fair enough, sir. Thank you for answering my question.

Thank you.

Before we take the next question, we would like to remind participants that you may press star and one to ask a question. Participants who wishes to ask a question may press star and one at this time. The next question is from the line of Navani Niretti from Niretti Investment. Please proceed. Hello.

Yes, ma'am. Yes, ma'am. Please proceed.

Okay. Thanks for the opportunity. So I've got a few questions. So my basically first question is, like, where is the EPI monetization is being booked?

What do you mean by where is it being booked?

I mean, is it in other income or is it an industrial segment? Where have you booked the revenue? Because you told us about...

Hi, this is Dabey. Actually, monetization of APR has been knocked off against the unbilled revenue.

Okay. Okay, got it. And my second question is, as we are facing the bitumen shortage in infrastructure segments, and also there will be a delayed monsoon, so I feel like Pluto will be highly impacted, especially the infrastructure segment will be highly impacted due to this. And also, this month, this quarter, we have just 20% top-line growth. And in order to meet your goal, like for the full year, 25% top-line growth, like how will you be able to address it if you can just clear out this?

So, hi, this is Subodh here. So, on the infrastructure segment, like, in fact, we have, you know, seen even in the Q1, you know, despite of all these challenges, what has come up due to this West Asia conflict, but the overall infrastructure segment has grown by almost 7%, you know, and that is majorly because of the cost. Where bitumen itself is, you know, short in supply and very, very expensive, so in that case, the rubberized bitumen came as a bone and people have, you know, started using more of rubberized bitumen because it was the only inexpensive proposition available to them. So, that's the reason, you know, that business has grown and, in fact, historically, also, if you see the quarter one is the peak season for executing the road was. So, no, none of the contractors want to hold the job and they continue to work using the modified bitmap to make the place because otherwise quarter two historically because of monsoon is weak. So, right now, we can see when the monsoon is also not that. You know, penetrating that well. So, we feel even, you know, going forward, the demand will be maintained the way it was, you know, executed in the previous quarter.

And let me just add to Subodh's comment, this is Gaurav, in regards to how will we meet this year's target with these current situations. I had clarified in my opening remarks that the revenues from the expansion and setting up of the TPU and the RCP plant have yet to come in. These will start coming in from Q2 and steadily increase. In Q3, when the RCP production also starts, our PCMB business is in a ramp-up stage, and that is very visible. What we have done over the last two, three years is we have built these, you know, many businesses within our business to counter any kind of cyclical issues or geopolitical issues, and that is what is giving our business the robustness. Compared to some of our competition.

Got it. But then, as you are saying that the South Africa plant and everything, so like it will take time because there are geopolitical issues again, which are going on. So like if the geopolitical situation doesn't soften, then what will we do? Like will we be able to achieve the target because everything is dependent upon geopolitical scenarios? So how are you planning to mitigate those risks?

Ma'am, we have already taken steps to mitigate as best to our ability. Now, if there are certain things which are beyond anyone's control, and the comment you made, I agree with it. If things become so bad globally that, you know, shipping stops and, you know, power outages happen and other kind of things happen, then certainly what you say is right. Everyone will be impacted, including us.

Yeah, so, okay. So, I just hope that it works out and everything works out in favor since I have been following this company for so long. And so, I just have one or two last questions. So, like, it's regarding the consumer segment. So, it has been down by 20% in volume. So, like, what is the concrete recovery timeline for the consumer segment? And have you planned to hedge raw material costs? Is there any way we can do that?

Let me, Gaurav here, and then Subodh can add to what I'm going to say. Our hedge itself is that we are not dependent on consumer business alone. Our consumer business is about 10% of our total business. 8 to 10%. So that's point number one. Our hedge comes from the fact that we cater to consumer business, industrials business, infra business, steel, now PCMB, and also TPU and RCP. That is our hedge.

Right, right, right. I get it. Okay, so like going forward, in

fact, in the consumer segment also, the price is not with the product, the price issue is with the binder, what the contractor used during the turfing application, which is beyond my control. But this business has it as intact as and when the things will improve. I mean, the market is there, the demand is there.

Got it. And will we be able to meet? Sorry to interrupt, ma'am.

May we request you to join the question queue again for your follow-up questions?

No problem. Thank you. Thank you so much. Wish you all the best for future.

Thank you. The next question is from the line of Viraj from MoneyGro. Please proceed.

Hi, Gaurav. Congratulations on the good results. Sorry, I wanted clarity around this EPR accounting. So it was mentioned it was adjusted against non-billed revenue. So can you elaborate, please, a little further on that? And I wanted to know if the 21 crores of PAT for the quarter is excluding any EPR impact or including?

No. Hi, I'm answering your first question. Actually, whatever the EPR has been monetized during Q1, that have been knocked off against the unbilled revenue, both in FY2526.

Okay? This is clear? Hope this is clear to you.

No, not clear. I don't know. So, does 156 crore include or exclude EPR in your revenue line item?

Viraj, you are mixing the monetization of EPR credits that we have accrued from previous year, but monetization has happened in Q1 with the financial performance of Q1. These are two different things.

So, is the 156 crore revenue and 21 crore PAC excluding any monetization of EPR?

So, the 156 crore revenue has some accrued EPR income, but that is relating to only Q1. Understood. And this 21 crore is relating to the EPR credits of previous financial year. I hope you are clear now.

Okay, got it. And out of the 21 crores, if one were to exclude the EPR of the previous financial year, what would the clean operating profit be after taxes?

You cannot mix previous years' accrued EPR credits monetization of 21 crores to the current year's P&L. These are two different things. That's what I've clarified to you.

Right. So it's very hard to extrapolate what this 21 crores means for the year, right? Because if 5 crores out of that is EPR, and you've done it for the entire prior year, then it's very hard to tell.

This 21 crores, this 21 crores, Viraj, has nothing to do with the profitability of current financial year. Does that answer your question?

Yes, it does. Thank you. Yeah. Okay.

Thank you. The next question is from the line of Nikunj Banushali from Walford, PMS. Please proceed.

Hello. Hi. Congratulations on a good set of numbers. And also good to see that you responded on the margins that they are now structurally, they will be between 18 to 20%. I had two queries. One thing is on advocacy at the India level on the main business. We have already reached 80-85% capacity, which means that the demand is quite piped in. So how do we increase the capacity, enhance the capacity? Are we looking to enhancing this capacity further in India itself, first of all?

Thank you for your question. We are working on exactly what you have just highlighted. Our demand is very robust for our products. We are looking how to first de-bottleneck and increase capacity, but also exploring options of possibly a new greenfin plant and other ways of enhancing capacity. That is in the works.

Okay. And secondly, as we are enhancing capacities across the globe, and once we have our pyrolysis, our RCB, and all the capacities in place, and we said that we'll be utilizing, we'll be at a capacity utilization of around about 80-85%. So at that peak, what would be our revenue? So that would be close to 1,000 crores, or we are still away from the 1,000 crores where another capex would be required?

Sir, we are targeting revenue of 1,000 by FF29. For that, we have already indicated about a 100% of capex during this and the next financial year. It is also likely that we may increase the capex, you know, if the demand continues to be so strong. We will certainly not forego that opportunity. But as per the current plan that we have and the vision we have, it is to reach 1,000 crores per FI 29.

Perfect. And lastly, if you can permit me, so you have mentioned that, you know, obviously the bitumen prices have increased and that's why the demand for the modified bitumen has increased. So firstly, are we expecting that this demand continues? And secondly, is there any directive from the government wherein know that certain percentage should be, you know, mandatorily incorporated as part of the infrastructure lane?

So, hi, sir. This is Subodh here. So, on, you know, on your query, like, you know, modified bitumen or rubberized bitumen is a reality. There is a continuous demand for the product. It depends its offtake basis on the progress of the projects on the ground. So, in the quarter one, basically, due to the shortage of bitumen, contractor preferred to execute the work where the modified bitumen was, you know, available to them, and, you know, they can overcome with the bitumen shortage by using more of a rubberized bitumen. In the long run, yes, demand will remain like this only, and... A government initiative towards reducing the dependence will further help to build the demand for, you know, rubberized equipment in the country.

Okay. Great, sir. And all the best to the entire team. Thank you so much. Thank you so much, sir. Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press star and want to ask a question. Participants who wishes to ask a question may press star and 1 at this time. The next question is from the line of Saurabh Gupta. Please proceed.

Hello.

Yes, please.

Sir, I just have one question. So, if you can provide, sir, guidance for FY27 for top line and for EBITDA margin, as in Q1, we have posted 22% EBITDA margin. So, what will be the guidance for the whole year?

Yes. So, hi. I think we have reiterated, you know, the guidelines for this current financial year is somewhere around 670 to 700 growth on the top-line side. Though we wish to, you know, maintain these kind of margin profile, what we have achieved in the Q1, but to stabilize somewhere 18 plus to 20 in between, as you know, we feel is achievable.

Got it. Got it. Thank you, sir.

Thank you. Participants who wishes to ask a question may press star and 1 at this time. The next question is from the line of Amitrati from CAGR Quest Capital. Please proceed.

Hi, I'm a audible.

Hello?

Yes, yes, please go ahead, please go ahead.

Yeah, hi. So my question is on the margins actually. So kind of depending upon which quarter do I look at or maybe last financial year, the margins have jumped up by 400 basis points to 500 basis points. So can you decompose or give me a breakdown of where is this incremental margin contribution come from actually? Because you did say that, okay, inventory might have played a marginal role and not a major role. But for example, if I see the material to material plus inventory cost ratio, then I compare it with sales. On an average, that is for various quarters as well as for FY26, that has been greater than 51%. But this quarter, it is 46% material plus inventory cost to sales ratio. So I was under the assumption that okay, maybe a decent contribution has come from this side. So if not, then as I said, could you just give me a breakdown of this 400 to 500 basis points increment margin? I mean, where does it come from?

Hi, Gaurav here. The main contribution has come at gross margin level that gross margin expansion has happened by a combination of both more efficient raw material costs as well as higher realization due to value-added product sales.

Okay. Okay. But we won't be able to put a number to it, right? Or can we?

See, our overall margin at EBITDA level has expanded by about 4%. So a very large contribution of this has come at the gross margin level. And some on account of efficiencies because of scale.

Sure. Yeah. Okay. That was my only question. Thanks very much.

Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press star and want to ask a question. The next question is from the line of Ajit Sethi. Please proceed.

Yeah, thank you for the opportunity. So my question is on EPR credits. So you have mentioned that EPR credits revenue recognition, this 21 crore revenue recognition is already happened in Q1, Q2, Q3, Q4, FY26. It's on an accrual basis accounting. Is my understanding correct?

Correct. Absolutely correct, sir.

And this Q1 FY27, we have monetized this EPR credit, so we received the cash, 21 crores, correct? Correct. So my question is, so in FY26, and you said that the EPR credit is basically done on PBT level. So in FY26, we have done a PBT of 72 crores. If I minus this EPI credit of 21 crore, we remain with... Uh, around... Around 51 crore. So we are actually, we have actually degrewed our PBT on 25 or 26 basis via one. So, and, and if I see our current PBT level, which we have done in Q1 is 28 crore, taking 5 crore quarterly on a PBT level. So it comes around 23 crore at a PBT level. So we have actually not grown this quarter. Is my understanding correct?

Your numbers are correct, sir, but EPR earnings and income is now an integral part of our business. Now, whether you consider it to be separate and wish to account for it separate, that's your choice, but EPR earnings and the credit is an integral part of any recycling business.

Okay, so, and EPR is accounting happen on PBT level. It doesn't come in EBITDA, right? You said that.

It comes at PBT level, so it translates and drops down to EBITDA level.

Okay, sure. Follow-up I will take on this e-video in e-mail. Sure.

Thank you. Before we take the next question, we would like to remind participants that you may press star and want to ask a question. The next question is from the line of Hemant Soni and An Investor. Please proceed.

Sir, thank you for providing me with the opportunity. I just wanted to check with you on the guidance which you gave for FOI 27. Did I hear it correctly, sir? Is it 670 to 700 crores for FOI 27?

Yeah, that's correct, sir.

And sir, one more thing which I wanted to ask you is, since we have done an EBITDA margin of 22% in the last quarter, and we have guided for 18 to 20% EBITDA margin, so shall I consider that there will be a drop in the EBITDA margin going forward?

Sir, Gaurav here, we have achieved 22% in Q1. That is a reality. But when we are asked by the investor community, you know, on some guidance and estimates, etc., you know, we like to consider all factors like ongoing new expansion, some new additions to our costs because of expansion of business. All the costs are always front-ended. They can have some impact. So, we prefer to be a little cautious. And therefore, the guidance that we would like to give you is 18 to 20%. Just like previous year, we've been giving guidance of around 18% as our aspiration, and we were achieving about 17%. And this quarter, we have delivered 22%. Now, that's a reality. Now, you can please interpret it as you please. But I will neither confirm that we will achieve 18% nor will I confirm we will achieve 22%.

Hmm. So how shall I interpret it, sir? Since this is a guidance from your end, so on.

I think you go by the history, by what we have guided, what we have delivered. I think that is the best way to see. We are standing by our guidance that we are on target to revenues of between 675 to 700 crores. We are standing at 22% of margins, but our guidance for the year as given previous year remains to be 18% plus.

Okay, sir. And one more thing which I wanted to ask you, sir, how much will RCB and TPO contribute to overall revenue in FI27?

Approximately about 7% to 10% of total revenue will come from the pyrolysis, the TPO, RCB business, sir.

So, 50-60 crores in absolute numbers, right?

That's correct, sir.

Okay, sir. Thanks a lot.

Thank you.

Thank you. Due to time constraints, I would now like to hand the conference over to the management for the closing comments.

Hi, is anyone from Go India on the call?

Yes sir, Sanama, your line has been unmuted.

It's okay. I think we can proceed to, you know, we would like to sincerely appreciate the participation of everyone on this conference call and trust we have effectively addressed all your queries. If you have any further question or information, please feel free to contact our investor relations team at Go India Advisors. Thank you, everyone, once again, and thank you, moderator, for arranging the call today.

Thank you. On behalf of Go India Advices, that concludes this conference. Thank you for joining us, and you may not disconnect your line.