Ganesha Ecosphere Limited (GANECOS) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Ganesha Ecosphere Ltd. Q2 FY27 earnings conference call hosted by Antic Stock Broking. As a reminder, all participant lines will be in the lesson-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 than zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahavar from Antic Stock Broking. Thank you, and over to you, sir.

Thank you, moderator. I am pleased to host today's earning call of Ganesha Ecosphere. From the management, we are Mr. Gopal Agrawal, CFO, Mr. Prashant Khandilwal, Senior Vice President, and Mr. Yesh Sharma, Director, Ganesha Ecopet, on the call. Without any delay, I would like to invite Mr. Yesh Sharma to start with opening comment. Thank you, and over to you, Yesh.

A very good afternoon to everyone and a very warm welcome to all the participants for joining. So thank you for joining and for your continued interest in Ganesha ecosphere. I hope all of you have had the opportunity to go through our results as well as the investor presentation. We are pleased to report that another quarter of healthy progress and our performance remaining broadly in line with the direction and the growth strategy that we had outlined at the beginning of the year. Demand remained encouraging across both our legacy as well as subsidiary operations, supporting better volumes and improved revenue performance during this quarter. On a sequential basis, the consolidated revenue has grown by 21.1%, while the standalone revenue has increased by 20.7%. On a year-on-year basis, the consolidated revenue has increased by 41.2, while the standard loan revenue has increased by 22%. Overall, in the first half, FY27, the turnover has increased by 33.7% on the console basis. Consolidated sales volume increased to 49,382 mt from 40,913 mt during the last quarter. Standard loan sales volume has also grown significantly to 31,800 The operating environment, however, has remained quite volatile. During the quarter, both the pet bottle scrap prices as well as the finished product prices have witnessed sharp fluctuations on both the sides, which was primarily driven by movements in crude oil, sentiments, and polymer markets owing to the ongoing geopolitical developments in the West Asia, resulting in a quite significant volatility across the value chain. Despite these challenges, we have been able to maintain the business momentum and healthy margins. Coming to our performance, the standalone business continued to operate strongly with planned utilization of about 99% during this quarter. The Varangal facility operated at around 67% utilization during this quarter. Healthy demand and operational efficiency supported the performance despite the volatile raw material environment. From a financial perspective, we have achieved a standalone EBITDA of 24.51 crores and consolidated EBITDA of 60.6 crores during Q2FI27, which is an increase of 200% over the corresponding last quarter. During Q1 FY27, Sandalone EBITDA per ton was Rs. 9396 as compared to 7704 earned during the Q2, and Consol EBITDA per ton was Rs. 4902 as a gauge 12281 earned during the current quarter. It was mainly due to the inventory gains during Q1 and loss of RPSF production at Varangal Unit phase because of the fire incident in the RPSF. On the half-yearly basis, we achieved consolidated EBITDA of 120.42 crores as against the 58.63 crores during the last corresponding FI. We generated operating cash flows of 56.91 crores during H1 FI27, deflecting the strength of our business model and our continued focus on profitable growth and cash generation. Our fourth RPEC granule production line at Warangal unit got the FSSI approvals for food grade applications and has thus become eligible to cater to the growing food grade packaging market. In August 26, we got a setback due to the fire incident of the RPSF division of our Warangal facility. This resulted into halting of the operations causing production and profitability losses while the fixed costs continued to be incurred. Quantum of loss is still under assessment, though it is adequately covered under insurances. Restoration activities are progressing as planned, and we expect the effected operations to be reinstated by Q4-FI27. Looking ahead, our growth and expansion plans remain firmly on track. The fifth ARPET granules production line is currently under installation and is expected to be commissioned during Q4-FI27. This will further enhance our capacity and strengthen our ability to serve the increasing demand for high-quality food-grade ARPED products. We are also shifting our Kanpur RPSF production line to our TEMRA unit to improve the operational efficiencies, optimize costs, and create a more integrated manufacturing setup. Overall, we are very encouraged by the performance delivered during the first half of FI27. Demand fundamentals remain quite healthy. Our expansion projects are progressing as scheduled, and we believe the momentum witnessed during the first half of the year should continue through the remainder of FY27 as well. Thank you once again to everyone for joining us today. We will be happy to take any questions now.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Dheeraj Ram from 361 Capital. Please go ahead.

Hi, sir. Thank you for taking the question and to manage this for good set of numbers. Sir, could you please let me know the current change in demand scenario for RPET and if any new FASI approved recyclers that have got approved into view?

Yeah, sure. Thank you. So, the current demand of RPET remains quite strong and healthy due to the elevated polymer prices overall currently. Also, now the government mandate of using 40% digital content is definitely in place, and all the players in the industry are looking to follow the mandates. Secondly, yes, definitely there have been new capacities which have come online during the Q2. For example, IDVB has got the approvals. There's one small player in the Northeast which has got approval, and our new line has got the approval. And similarly, one more player's new line has got the approval in the Q2 from FSSAI.

Understood. And second would be, what does this FASAI approval mean? Currently, we were selling it for non-boot grade. What was the utilization rate and what could be the potential implication of this FASAI approval on your new line and what could be numbers turning out to me?

Yes. So, basically, once you get the FASAI approval, then you are able to supply the output of the line into food contract applications. Till now, we were utilizing that line mostly for our non-food grade customers and also for exports since we already had the USFD and SFA approvals for the line. So we were mainly focusing on that. Going from now onwards, obviously, since we will be able to also ramp up the utilization, which we were running for the line for at about, oddly, about 60% before the approval came through. And after that, we've been able to increase the ramp up. Understood.

And this last question is, what could be the loss on volume with this fire accident at one of the ER cases?

It is roughly about 2,500 to 3,000 ton, quarterly basis.

Quarterly basis. Understood. Lastly, could you let me know the raw material price, sir? Like this crude price, what could be the raw material price, Adam B.

So, raw material prices are moving in tandem with the prices of finished goods. So, the prices are quite volatile in the market, And it is very, very unprotectable what would be the price going ahead. But certainly at this point, these are at elevated level.

Okay. And since this is an increase in trajectory, can we expect the inventory gains in the quarters coming ahead?

Sorry, can you please come again?

So since crude prices have ramped up and we had inventory of close to three months, So, could we expect inventory gains in next quarters going ahead, or has this been baited out then through the entire quarter?

Yeah, so we are not expecting any inventory gain going ahead. Although we are having the inventory with us, but the inventory is churning out fast and the prices are also very volatile. So, the inventory is valued at about current prices only.

Okay, understood. Thank you, sir. All of this for the quarter coming ahead.

Thank you. Next question is from the line of Bharat Gulati from Dalal and Brocha Stock Broking. Please go ahead.

Yeah, hi. Thank you for the opportunity. Hope I'm audible. Just a few questions on the subsidiary business. I understand quarter on quarter, the utilization will drop because of the fire incident. Just trying to understand, what would RPET's utilization for the lines that were operational during the quarter would have been, if you can quantify that?

So, on blended basis, because one line was started in the June itself, and FASA approval we got only in this month, so the blended capacity utilization was about 75-76% in the last quarter.

Understood, understood. And the fourth FASAI approval that GASH you spoke about, should that immediately start to ramp up from Q3? So the ramp up would be in progress right now? Is that the case? And that 60% utilization should reach the 75-76 blended utilization of the existing RPET? Is that the sort of trajectory we are looking at?

Yes, yes, we are witnessing the volume growth of that line also. Capacity is increasing.

Understood, understood. So, just trying to gauge what sort of a capacity utilization just on the RPET line do we expect to close the year at? And then given that when we restore our operations back in the RPSF line also, what should the blended exit utilization for Varangal facility be? I understand you're adding some new lines. I'm talking about excluding of addition of those new lines on the capacities that have been live throughout the year. What should our expected capacity utilization on that be? And what should a sort of normalized EBITDA PERTAN on our Varangal operations look like? It's currently between 21 and 22 rupees. So what should that sort of be at?

Yeah, so we are expecting the optimum capacity to rise in about 85% of our Barangal unit and going ahead. And certainly we are looking for the EBITDA of 21-22 rupees, a KG which we are earning presently. Understood.

Just trying to understand the sequential hit on EBITDA per ton that we saw, that was predominantly because of the RPSF line going out, right? So, shouldn't once that RPSF line come back into our business, we should normalize back to 24-25 rupees per ton? Or are we going to see this pull down on a normalized basis to 22% as it is?

Yeah, so it would be between 224 rupees a kg on Glenda's basis.

Understood. For our subsidiary business, that is.

Subsidary business, yes.

Understood, understood. Okay. And just on the demand outlook as a previous participant questioned, you know, what's the demand supply sort of mismatch? There's been quite a few approvals from FASAI that have taken place during the quarter. So, how much does that demand gap still exist, if you can just throw some broad numbers on the current approved Fasai facilities and what market share do we hold in that?

So, the current Fasai approved facility total capacity of India is about 4.2 to 4.5 lakh tons approximately, the current total approved capacity, out of which our approved capacity has now gone to 65,000 tons. But what is happening is that still some, you know, some capacities are not able to perform quite good on the operational basis. So the actual utilizations are not as high. The actual utilizations of the, you know, the industry are always oversight. So the data that we have currently on the market share side is that currently the RPED sales in the market are somewhere between 25,000 to 50,000 tons, Also, out of which we have a market share of about 5,000, 5,000 tons on a monthly basis. So, roughly about 20%.

Understood. But just trying to understand, you know, we've seen pretty, a pretty big consolidation that would have taken place due to the turmoil in the past six months. So, hasn't there been some sort of brownfield capacities that have gone bust that we could take over and sort of continue those operations? Or, I mean, just trying to understand what's The broader perspective of us expanding lines going forward, should we expect capex within our existing facilities or some sort of acquisition of players who already had facilities but aren't in operation anymore?

So, you see, in fact, the opposite has happened. So, what has happened since the last six months of geopolitical turmoil is that the polymer, the virgin polymer prices have went quite up. And because of that, the demand for recycled polymers has gone pretty high. Now, what has happened because of this is that even the inefficient players, you know, are now able to actually operate at higher utilizations and, you know, are able to sustain their operations in a quite decent way because there is a demand for the recycled polymer today because recycled polymer today is at a discount to the virgin polymer prices. And so, the broader market, you know, demand has increased quite significantly. So, in fact, the opposite has happened in the last six months. You know, the players have been able to run their line well.

Yeah, so, yeah, so we are looking for the capacity expenses, and we are already making up the expenses of the capacity at Warangal plant, brownfield expenses we are carrying out.

Yeah, yeah, right. Understood. That's helpful. That's it from my head. Thank you.

Thank you. Next question is from the line of Deepak Ajmera from Elpro International Limited. Please go ahead.

Hello.

Yes, your audible. Please proceed.

Yeah, I would like to know the current RPET volume. How much is the long-term contract versus the spot sales? And since the crude prices are too high, and given that if the crude prices falls in near term, what kind of EBITDA per kg, we are assuming in RPET, is 20-21 rupees per kg sustainable?

So, our current contracted capacities out of the total production today is currently at about 85 to 90%. So, 85 to 90% of our capacities are currently on a contractual basis in which, you know, there will be absolutely no impact of any, you know, sudden fall or decrease in the prices. Also, you know, if you're talking about the overall EBITDA average numbers, we are very confident that we'll be able to achieve EBITDAs close to 20 rupees a kg on a sustainable basis.

Okay, got it. And on the new capacity which came currently, so will you please guide once again what the optimum utilization in ARPED we can have and what we are targeting in future?

So, capacity utilization is about 85% in case of RPET. Effective utilization is 85%. It is quite difficult to achieve the capacity utilization because of the product mix which are currently being sold in the market.

Say that this 80% utilization, we can have it in the Q4 or Q3 in this year?

Yeah, we are working on the de-bottlenecking, so we are expecting to, by the end of this financing, we would be able to go by 90%.

Got it. And any greenfield plans for our new capacities and which plan was dropped from Odisha?

Yeah, so we are working on the assessment plan, and I think we would be able to come to the investors and the public in this quarter itself.

Thank you. Next question is from the line of Harsh Vidhani from India Capital. Please go ahead.

Hi. Hi, sir. Congratulations for the good sight of the results. I just wanted to know that now that, like you said, some approvals have come through in this quarter, but is it fair to say that the quality supplier remains constrained and we would be able to maintain the current margins?

Yes, definitely, Harsha. So, what is happening is that now even the industry is realizing, you know, the difference in the polymer quality being supplied by different players. So, we are obviously, we are performing pretty well on that side, and the demand for our products is going higher and higher, and in fact, we are constrained by our capacity right now and not by the suppliers. So, we think that definitely we will be able to perform much better than the industry overall.

So, sir, is it fair to assume that the ramp-up of the new line that came in would have been very quick as soon as we got the PASAI approval?

Yes, yes, yes. In fact, in just a period of a month's time, we have been able to, you know, achieve very high utilizations, yeah.

So, yeah, we are already utilizing the capacity, about 60% capacity utilization was already there of this line where we are utilizing the material for non-food applications. So, there will be some ramp up in the capacity utilization after the FASAI approval.

Understood. And, sir, what is the expected volume increase for food grade ARPET now on a quarterly basis?

So, quarterly basis, it is around 1,500 to 2,000 times.

Got it. And then we also have another line coming in January. So, that would, like this line, prior to PASAI approval, will be able to operate for non-food grade applications, right? Understood. And, sir, one last question from my side, sir. So, is it clear to assume that the cost of the fire incident will be contained in the, have been contained in this quarter, and there would be no more cost implications?

So, basically, there are two implications of this. One is we are losing the EBITDA margins which we are earning on the PSF. So, the production is completely halted, and so we are losing the EBITDA on that. And further, we are incurring the fifth expenses, fifth part of this RPSF because of the halting of the production.

So, they are double impact as of now.

I understand. Thank you. Thank you, sir.

Thank you. Next question is from the line of Kostab Bugna from Kamana Holdings. Please go ahead.

Yeah, I'm fairly new to this company, so if you could explain, you know, so when crude prices go up, you're getting an advantage over the substitute product, right, virgin pet, right, but what's happening with your margins at the same time? So could you explain your raw material stocking days and the contracts you have in terms of cost push with your customers, if you could explain that? And also, if you could explain if crude comes down drastically, hypothetically, then how does that affect your demand from here on? So those points, please.

Yeah, so basically, definitely the increase in food prices and the increase in the virgin polymer prices has increased the demand of recycled products. But on the other side, the prices of finished goods has, in case of fiber, the entire series is for sale. So definitely the prices have increased of finished products. But at the same time, prices of scrap has also gone up to that extent. So, basically, we are maintaining the EBITDA, but there is not any increase in the EBITDA margin. And in case of our ARPED business, our 85-90-point capacity is a contracted price. So, there our margins are fixed.

This environment even?

No, basically, so we are having the contract of cost, raw metal prices plus yield plus the fixed conversion cost. So whatever the raw metal, the raw metal fluctuations are there, it is poised on to the buyer.

Is it instantly passed on?

It is with a lack of one month. So it is 1 plus 1. So current month's prices are poised on to next month.

Okay, and how long are these contracts? Because your client doesn't try to negotiate if the prices have gone up? What is the bargaining power of your customer, basically, if your raw material prices go up, like, in the situation today?

So, no. So, the contracts, first of all, the contracts are annual, so they are one year long. Secondly, there is no negotiation that happens on the formula pricing because that's what has been agreed on, you know, in terms of the pricing. And obviously, you see, it's just a lag of one month. So definitely, you know, what happens is by the end of the year, it all gets averaged or it all gets neutralized any which way, you know, automatically. So there is no such a negotiation that happens, honestly, on the contract formula, I think.

Okay, and this last point on this.

Sorry to interrupt, Mr. Bhugna, may we please request you to rejoin the queue, sir, for the follow-up question. Thank you. Next question is from the line of Deepak D from Sundaram Mutual Fund. Please go ahead. Thank you for the opportunity.

Am I audible? Yes, please proceed. Yeah, hi, sir. Congratulations on delivering a good set of numbers. So, sir, my first question is on volumes. So, if I look at our standalone business, so this quarter, you know, we are almost looking at a 32,000 sort of run rate in 10-inch basis and a 25% QOQ growth. Just wanted to understand what changed in this quarter for the volume to jump to short plane QOQ basis, and how should we think about this run rate going into H2?

So, because the demand was, the sale volume was quite low in first quarter and second quarter of this calendar year. So, there is some pent-up demand also in Q3. And we also liquidated our inventory. So, we are looking for the normal demand would be there going forward.

Okay. So, would it be fair to assume that the regular 29,000 to 30,000 volume, which we used to clock earlier, that should continue on to H2?

Yes, yes. Because we are also liquidating most of our stock. Now, the run rate would be $28,000, $29,000 going high on a quarterly basis.

Got it. And so, secondly, on EBITDA per tonnage basis, so, you know, despite all the challenges in the raw material front, we are still clocking somewhere around, you know, 7 to 8 rupees EBITDA per kg, right, in our standalone business. So, would it be fair to assume that this sort of run rate would be maintained going forward, I'd say in H2 and also next fiscal?

Yeah, you are very right. There is a lot of fluctuations and variation in the prices of our material. But ultimately, on every basis, we are able to maintain the EBITDA margins of 720p kg in if-and-run business. And we will be able to follow up to maintain it in coming quarters also.

Okay. And so, it would be very helpful if you could just call out, you know, what is the current price difference between RPSF and Virgin PSF and also RPIT and Virgin PET? Just wanted to understand from trend perspective, how is it looking at, let's say, two months back and current?

So, the RPSF prices are currently very volatile. You have to understand, first of all, you know, you're taking the current numbers. There should not be any benchmark as such. So, the current RPSF prices are in the range of 110 to 114 per kg, whereas the VPSF prices are in the range of 130 rupees a kg. And on the other side, in RPEDs, the current RPED prices are at about Rs.150 a kg, and VPED prices are at about Rs.140 to Rs.145 a kg. But it's very volatile and very fluctuating, so, you know, I mean, definitely it's going to change.

So, yeah, I understand, but that's what is surprising, because generally, I had an understanding that, you know, that PET waste price has its own supply-demand factor. But now, these crude prices are also impacting this. I think it is because of the demand shift, which you might be incurring, and hence, the PET-based prices are also going up as people are looking for substitution. Is that the right understanding?

Exactly. Exactly. You are absolutely right. Yeah, that's what happens.

Okay. Okay. Got it. And one last question. So, you know, we have been maintaining our EBITDA guidance. I understand that EBITDA guidance is a little bit tricky, depending on a lot of factors. So, do we still maintain that 225 crore to 230 crore EBITDA guidance for 27 or do you feel that, you know, since this FASI approval has come through and your volume mix will also go towards the higher margin product now in H2 that we can surpass this 230 crore EBITDA in F523 itself?

Yeah, so we have given the guidance of 225 to 250 crores, and so we are expecting each other to the higher end of the EBITDA, like close to 235 to 240 crores.

Okay, okay, sir. Very helpful, sir, and thank you, and all the best.

Thank you. Next question is from the line of Suraj Malu from Katamaran Ventures. Please go ahead.

Sir, thank you very much for this opportunity. Sir, from the presentation, if we just look at CY29 or F530, India paid bottle number, which is supposed to go to 23 lakh tons rate, and if we consider the 80% recycling target, the industry can be around 18 lakh tons. So, do we target like 20% of that capacity, which will be around 3.5 lakhs roughly by F530 or RPEG?

No, so we are looking for the ARPET demand would be around 1 million ton of the overall demand, overall ARPET consumption. So, we are looking for 25% market share on that capacity, on that demand of 1 million ton.

Got it. And sir, for that, what is the amount of CAPEX that we'll need? Like, right now, after the current line 5, I believe we'll go roughly to 90,000, to go to, like, let's say, 2.5 lakhs. What is the CAPEX that we'll need to do, and will that happen entirely in Varangal?

No, so we are not going to incur any further capex in the Warangal, so we would be having around 100,000 capacity in Warangal, so we would be, we are looking for putting up the capacities in some other place, like in the northern India or some other place.

Got it, and will that be like 500,000 crore capex equivalent or?

Yeah, so for roughly for 50,000 capacity, the capex would be around 300 crore. 250,000. 250,000.

Got it. If I may ask one last question, like the EBITDA per kg at that scale, like when we are at 2 lakh or 2.5 lakh, the EBITDA per kg, assuming we have FSSI approval, that will be like 24-25 rupees or will it be 20 to 22 rupees?

Yeah, so we are having the guidance between 22 and 22 rupees.

Thank you very much, sir.

Next question is from the line of Shubham Agarwal from Berman Capital. Please go ahead.

Hi, sir. Thank you for the opportunity. I had two questions. Sir, one is the RPSS line which got impacted in Marangal due to fire accident. When is that expected to come back online?

So, basically, the OEM got the visa only in the current month, and they visited the plant in the last week. And so, they are assessing the loss, what is the repairable, what is to be replaced. So, we are expecting by the end of February, March, we would be able to restore the line, Depending upon the procurement time of the imported equipment from the OEM.

Understood, sir. Specifically for this portal, what was your output for just RPET?

The total production volume is about 15,500 tons, including the PSF and the RPET and the yarn.

But specifically, can you give for RPET if that's possible?

So, basically, we are giving the blended numbers.

Understood. Understood. Thank you for answering my questions.

Thank you. Next question is from the line of Bhavya Gandhi from Bajaj Alternate Investment Management Limited. Please proceed.

Yeah, thanks for the opportunity and congratulations, Yash, as well as Gopalji on good set of numbers. Sir, my question is regarding the global opportunity. Let's assume that if at all there is a supply-demand mismatch in the country, which are the countries globally who have already this RPT regulation in place as a backup just wanted to understand, and are we allowed to export? Is there any restrictions on the exports? Yeah.

So, Bhajda, currently some states in the U.S. and also Europe has already has the mandatory RPED regulations. A lot of countries currently, you know, have developed and are targeting to start the RPED mandates pretty soon to someone, some countries in 2028, some countries in 2030. So, it's a global phenomenon that is taking place, number one. Number two, yes, obviously, we are allowed to export. Since we are USFD and SO certified, we are allowed to export to multiple countries, just that for the specific country, you have to take the food safety regulator's approval before you are able to supply it. So, that is something that you have to do. Otherwise, you are absolutely allowed to supply to any country whatsoever.

Got it. And at the bottler level, if you can quantify how much percentage of compliance are they fulfilling, because this year mandates around 40%. So, if you can just throw some light at the large bottlers or the beverage companies, what is the average compliance that they are following percentage-wise, at least?

I think it's very difficult to exactly, you know, give the numbers because obviously we don't have access to such information, but they are trying to, you know, go as high, you know, provided they are getting the quality material feedstock. The problem today is that they are not able to get that much amount of quality feedstock from the industry, and that is why, you know, they're getting sort of blocked by that. What we hear from the industry experts is that the current rate is somewhere between around 25% for the current year totally. They are trying to increase, but obviously there is a big challenge in availability of high-quality Arapet pitch stock.

Got it. Fair enough. And thank you so much and all the best for you. Thank you.

Thank you. So, next question is from the line of Naman Maheshwari from Srojan Alpha Capital. Please go ahead.

Yeah, hi. Am I audible?

Yes, please proceed.

Yeah, congratulations on a good set of numbers. Just wanted to get a clarity. Addressing to a recent participant, you just said that the approved capacity for India right now is somewhere around 4.2 lakhs to 4.5 lakh metric ton. And the current demand is 30,000 metric tons, which implies a total demand of 3,500,000 metric tons per annum. So, has the situation changed from, has the situation changed from when we earlier said that the approved capacity is less and the demand is more, to now the approved capacity being higher and the demand less?

So, please understand that the 30,000 metric tons is not a demand number, it's the actual sale number. The demand today is much, much more higher than that, probably more than even 2x. The problem is that the material is not available for sale. So, that's how the numbers are, you know, getting blocked today.

Okay, and so, what is the gap actually? Is it because these facilities are not able to run at these optimum levels? So, there's some quality difference?

So, you take it like this, all the brand owners have not started to utilize the, to use the mandatory consumption of RPET, not the industry as a whole. So, most, though some of the brand owners have started, so the actual demand is basically, yeah, outpace the numbers of available quantity, but certainly the demand would be higher when the entire industry would be utilized, starting utilizing the RPET.

Okay. And can you give me some light on the Filamentian operations at the Varangal facility? How is that turning out? What is the revenue contribution or something on those lines?

So, it is definitely improving. We are slowly ramping up the new customers' demands and also in process of doing approvals for a couple of more customers as well. So, it's increasing slowly. It will take probably some more time to get it to its optimum utilizations. We would not be, you know, disclosing product-wise details, to be honest, separately. We'll be working with that numbers.

Okay, so just one last follow-up on this. So, as this filamentian contribution ramps up, do we see margins moving to a higher percentage going forward?

Yeah, so when we will be utilizing the optimum capacity, so certainly it will add up the EBITDA, overall EBITDA.

All right. Thank you so much.

Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star and one. Next follow-up question is from the line of Deepak Ajmera from Elpro International Limited. Please proceed.

Hello.

Yes, please go ahead.

As you mentioned that we have a contract for yearly basis, when is the next renewal period?

So, it is happening currently in December.

In December. How confident are we in getting, again, the renewal ones? Because many players are now moving with some other players also, like Varun has their own partner with someone, and now other organised players are also thinking for the same. So, in the span of one, two years, how do you think this, and do you think that we are capable or we can partner with someone like Coca-Cola or other players?

So, see, we are more than confident of, you know, getting the contracts, number one. Number two, you know, even though a lot of players are there, are coming up, definitely, yes, but the number one, the, you know, quality RPET output and as well as utilization, you know, Currently, the market needs a much more higher amount of ARPET than what is available today. Also, we have very good rapport and relationships with a lot of brand owners, global brand owners, not just one or two or three, but we're working with a lot of brand owners now and have been able to really demonstrate Vanisha as a very strategic supplier. So, we're very confident that we'll be able to lock in the contract even for the new line as well.

Okay, got it. Thank you.

Thank you. Next follow-up question is from Dalayan Om Bharat Gulati from Dalayan Bro just stop broking. Please proceed.

Yeah, hi. Thanks for the follow-up. Just a question on our capacities. You know, we've spoken in previous earnings calls and in presentations that we're taking RPED capacities to a lakh. What's the CAPEX plan beyond that? Can you give a broad sense of what are we planning beyond the 1 lakh RPET granules going to and where would that CAPEX take place? Any sort of broad timeline if you can give a sense of when would the additional capacities beyond 1 lakh tons start to come in at least in the production phase if not in, you know, the ramp. Like, I mean, when will they be online? Yeah.

So, it is taking about 12 months to 15 months time to go on in the new capacities. So, I think we would be

looking for the new CAPEX as soon as we finalize it.

Understood. Understood. But, I mean, just some sort of broad understanding of how much CAPEX would it be in terms of, you know, capacities. Just some broad number to go by, and I understand you've given the 12 to 15-month timeline, so that would basically make us stand that by end of FY29, only those capacities would come in broadly. So, if you can just give some sense of how much would that additional capacity be?

So, as I told you, for 50,000 additional capacity, it would be around, the capacity would be around 250,000 to 200,000 pro.

Got it. So, should we expect about 1,50,000 tons of RPED granules by the end of FY28? That would be a fair thing to say?

We are bushing and hopefully it will be delivered by the end of FY27. Sorry, FY28. Yeah.

Understood. Yeah. Got it. Got it. Okay. Thank you.

Thank you. Next follow-up question is from the line of Suraj Malu from Katamaran Ventures. Please go ahead.

Thank you, sir. Sir, who would be the top two to three customers, anchor customers, when, let's say, we have two, two and a half lakh capacity, like three, four years down the line?

So, you see the pet market in India is structured in a specific way where, you know, there are, let's say, global organized brand owners like Coke, Pepsi, and many others, you know, in the beverage. So, obviously, they will make up, I would say these global brand owners would make up almost 70 to 80% of our market share. These global brand names are around 25 currently in the Indian market in one text. And the rest, 20-30%, will be the local regional players for us.

Okay. And since you have relations with these global customers, are you thinking of any big exports?

So, yeah, we are definitely on the market. You know, it really depends on how the economics and how the deals work out. You know, currently due to the geopolitical, we are still doing exports, but the quantity has gone down. The volume has gone down because of the freight impact and higher demand and higher prices in India. So, obviously, we are there on the market and we are able to deliver as we are able to go forward. So, it's going to depend on how the Indian landscape looks like.

Got it, sir. Thank you.

Thank you. Next question is from the line of Direndra Kumar Petro from Spark PMS. Please proceed.

Hi, this is Direna. So, congrats on a good set of numbers. I just had one question to for Yash. So, Yash, we have seen that the promoter level pledge has been increasing since last three four quarters, and in the last quarter itself, it has gone off significantly by four percent. So, any update on that, whether this will be halted or it will be decreased in some timeline regarding that? Can you help me on that?

Yes, so, Gideon, the pledge was, because of the, some funds borrowed by the promoters for, converted on their warrants last year, converted on their warranty to E40. So, basically, the pledge has been increased because of the fall in the prices of shares. So, we have to make up the more mortgage to cover up the fall in the prices.

Okay. Got it. And any timeline for repayment of that?

Thank you.

Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for the closing comments.

Thank you. Thank you everyone for your time, your questions, and your continued support.

Thank you all for joining us, and you may now disconnect your lines.