Mamata Machinery Limited (MAMATA) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Mamata Machinery Limited Q4 and FY26 Earnings Conference Call hosted by TIL Advisors. As a reminder, all participant lines will be 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 “*” then “0” on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sayam Pokharna from TIL Advisors. Thank you and over to you.

Sayam Pokharna:

Thank you, Yashashree. Good afternoon, everyone and thank you for taking out the time to join us today in this Q4 and FY26 Earnings Conference Call of Mamata Machinery Limited. The Investor Updates including the Investor Presentation and Press Release have already been uploaded on the Stock Exchange and on the Company website. To take us through today's results, we have with us from the management team, Mr. Apurva Kane – Chief Executive Officer, Mr. Rajashekar Venkat – President, Mr. Dipak Modi – Chief Financial Officer, Ms. Madhuri Sharma – Company Secretary Compliance Officer and Chief IR Officer. We will begin with a brief overview of the financial and operational performance for Q4 and FY26 from Apurva sir, followed by a Q&A session. Please note that any forward-looking statement made during this call, which can be construed as a forward-looking guidance, must be considered in conjunction with the risks and uncertainties that we face. These risk factors have been detailed in our prospectus document and follow-up annual reports. With that, I would now like to hand over the call to Mr. Kane. Over to you, sir.

Apurva Kane:

Good afternoon, everyone and thank you for joining us on the call to discuss the operating and financial performance of Mamata Machinery for the fourth quarter and the full year ended March 31, 2026. Before I take you through the numbers, I want to be direct about how the Board of Directors and the Management Team are reading FY26 Financial Performance.

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This was a year of consolidation for the company. Our reported financials, both on the top line and on profitability, do not reflect the underlying health of the business. They reflect a specific set of external events that came together within a single year and weighed on a period that is seasonally our strongest. I will spend more time than usual on the financials this time because the context matters for how one should read these results. FY26 witnessed a sharp one-time disruption in our U.S. business which pulled down a year that was otherwise progressing in line with our plan. Our packaging growth story, our domestic business momentum and our upcoming product and technology pipeline all remain intact. What changed was the external environment in our largest export market and the timing of when that disruption hit. Firstly, let me take up what happened to the top line: Revenue from operations for FY26 stood at Rs. 233.1 crores against Rs. 254.6 crores in FY26, a decline of about 8 percent. For the fourth quarter, revenue from operations was Rs. 73.9 crores versus Rs. 111 crores in Q4 FY25. The primary reason for this decline sits in our U.S. business. The U.S. is a large export market for us, particularly for our converting machinery business and to a smaller extent for our other two segments. During FY26, our U.S. business declined by close to 50 percent in absolute terms. The sequence of events was such that U.S. tariff situation remained unresolved through Q2 and Q3, which is our highest order intake period of the year. By the time tariff concerns began to ease, which was in Q4, the conflict of West Asia created a fresh round of macro uncertainty. Customer sentiment of our clients in U.S. and elsewhere weakened and several CAPEX decisions were put on hold. On top of this, a sharp rise in polymer prices on account of crude oil volatility stretched the working capital cycle of our customers, which further delayed the capital expenditure decisions impeding in Q4. Demand in the U.S. and parts of Europe was suppressed throughout this window. The core point I want to leave you with is this. When the U.S. headwinds emerged, the organization moved quickly to offset the shortfall through our other two business segments and other geographies. We were able to recover a meaningful part of this gap. We could not recover all of it, largely because the West Asia disruption arrived before the U.S. situation had stabilized. Which is why revenue declined by 8%. The agility we showed in absorbing a large part of a near 50% decline in key markets within the same year is what I must highlight.

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If we evaluate from product segment perspective, the impact was most visible on our converting business, where the U.S. is a large export market leading to a significant one-time degrowth for the year. To put this in perspective, within our own converting, our domestic sales grew by over 6% and our rest of the world sales grew by 23% during the same year, even as U.S. sales fell. As the U.S. is the larger contributor within converting, the overall segment moderated despite the healthy growth in other two geographies. It is fair to say that the disruption in FY26 was only limited to U.S. markets while other geographies performed as per our expectations. Our packaging business has remained flattish with a marginal decrease of 1%. However, domestic growth has remained robust and the only softness is coming from U.S. exports. While domestic business delivered in line with our 30-40% expectations, year two, the granule picture is quite telling. Our domestic packaging sales grew at an impressive 55% during the year, while U.S. packaging was down about 20%. The blend growth therefore appears lower than the underlying momentum. Barring U.S. disruption, our stated packaging growth momentum of 30-40% remains intact, which is what we are even targeting in FY27. Our co-extrusion business saw a marginal degrowth on account of the lumpiness inherent to this business rather than any change in the momentum and we have advanced nine-layer co-extrusion projects in the pipeline for delivery In H2FY27. Profitability saw a much sharper compression than the top line and this needs explanation. EBITDA for FY26 was Rs. 19.1 crore at a margin of 8.2% against Rs. 54.64 crores at 21.4% in FY25. Profit after tax was Rs. 15.1 crore versus Rs. 40.8 crore. The compression came from a mix of multiple factors, most of which are either one-time or particular to this financial year. 1.

Firstly, the gross margin. Gross margin compressed from 60.8% in FY25 to 54.6% in FY26. There are three reasons. The largest is the lower share of exports in our overall top line mix. Exports are a higher margin business for us and the decline in US revenue naturally reduced the export share, which weighed on blended margins. Second, there was some adverse product mix during the year, lower contribution from certain higher margin products like co-extrusion among others. Third, we absorbed some commodity price inflation through FY26, more particularly in H2.Gross margin compression had a 6.2% impact on our EBITDA margin.

2.

Second, a one-time provisioning impact in employee cost. We took higher provisioning in employee benefit expenses on account of the new labor and wage code amendments. This is a one-time impact of approximately Rs. 3.05 crores booked entirely in Q4, which is close to 1.3% of EBITDA margin impact.

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3.

Third, elevated exhibition expenses. Exhibition spends are lumpy by nature because certain marquee international exhibitions take place only once in two or three years. FY26 happened to be a year in which several large international and domestic exhibitions were clubbed together in a single year. Exhibition expenses for FY26 stood at Rs. 10.2 crores compared to Rs. 6.2 crores in the previous year. The incremental exhibition spends alone weighed on our EBITDA margin by 2.1%.

4.

Fourth, negative operating leverage. With the top line down by about 8% and our cost base remaining constant, some negative operating leverage played out on the operating margin. Taken together, the 6.2% compression and gross margin, the 1.3% impact from the labor cost provisioning, incremental exhibition expenses of 2.1%, and effect of negative operating leverage explain the full compression in EBITDA margin for the year.

I want to emphasize that these items are either one-time or specific to FY26. We expect profitability to normalize to historical averages of around 20% as the top line recovers and these one-off costs roll off. Now, coming to operational updates: While the financials were impacted, operationally FY26 was a strong year and we made real progress on the strategic initiatives that will drive growth going forward. Let me take you through some key developments. Our packaging division, which remains our key growth driver, saw the most progress. We secured a significant multi-machine order for our VFFS packaging machines from one of India's leading snacks and namkeen brands. We have already delivered four machines in FY26, three of them in India, and we have orders for further 18 machines which are scheduled for delivery in H1FY27. This is an important validation of our packaging portfolio and gives us strong revenue visibility in current year. We also crossed an important threshold in our geographic expansion. We received our first ever packaging machine order from a region outside of our traditional US and Indian markets. From a customer in South Africa, this order is scheduled for delivery in Q2FY27. Africa is the first of our new regions to come through and we expect others to follow in the coming year. In addition, we made our maiden appearance at Interpack 2026 in Düsseldorf. The premier global packaging exhibition, where we showcased our complete packaging technology portfolio to strengthen our international footprint and open the European market for Mamata. On the technology front, a product innovation front, we launched RecTech at Blast India 2026, our breakthrough recyclable packaging technology. RecTech is an advanced, fully recyclable mono-material film engineered to deliver superior barrier protection and mechanical

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performance compared to conventional non-recyclable composite structures such as PET plus PE and PET, METPET plus PE films, which are widely used for flexible packaging in India. These conventional films are not recyclable and pose a challenge for plastic waste management and for brand owners working to meet extended product responsibility mandates. RecTech outperforms traditional PET plus PE films and bridges the cost gap with previously high-priced recyclable films. By bringing recyclability and cost efficiency together at scale, we expect it to accelerate the adoption of sustainable packaging amongst leading domestic brands. We see RecTech as one of the most promising recent additions to our portfolio. At the same time, we want to be measured in setting expectations. A new material technology of this nature takes time to gain market acceptance and brands Revaluate, validate and qualify it within their packaging line. We therefore expect RecTech to begin contributing to business gradually and to build into a more meaningful opportunity over medium to long term. We would also like to highlight the development on the intellectual property front in January 2026. Mamata Machinery was granted a patent in the European Union for its invention titled “a cross-sealing device”. This proprietary cross-sealing technology, originally patented in India and the US, has been developed by Mamata for sealing mechanism used on its advanced packaging machines. With the EU patent now secured, we are offering this sealing technology to customers across Europe, which was showcased to European customers in recent Interpack trade show. Together, these milestones are the building blocks of FY27 and FY28 and beyond. Outlook: Now let me come to how we see the year ahead. FY26 for the year of consolidation, we expect FY27 to be a year in which we return to our growth track, and we expect profitability to normalize alongside. Our priority in the US to recoup the ground we lost on account of tariff policies and return to previous levels of business. The US market is becoming more conducive than it was following the amendments to tariff policy, though we do see some residual headwinds as West Asia's situation continues to influence customer sentiment and capital expenditure decisions. Even so, we expect the US to make a comeback in FY27 and we are fully geared up with specific initiatives to recover the same. Alongside the US recovery, we are pursuing double-digit growth of our domestic converting and our 30-40% stated growth objective in packaging businesses. While continuing to scale new geographies, we have established certain channel partners in South East Asia, where we are targeting close to US $1 million as initial business. Working is underway for CIS markets and Australia while Interpack opens the European markets for us. Our packaging division will continue to scale to new levels, supported by a strong delivery pipeline and our widening international footprint. I would also like to highlight that our order book at financial year end stood at Rs. 89.59 crores against Rs. 66.64 crores in

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FY25, an increase of about 34%, which gives us healthy visibility across all segments and a good start to FY27. Our packaging growth story and our broader strategic initiatives remain intact. We enter FY27 confident in our direction and in the ability of organization demonstrated through difficult year. With that, we will be happy to take questions. Moderator:

Thank you very much. We will now begin the question-and-answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from the line of Deepan from Trustline PMS. Please go ahead.

Deepan:

Good afternoon, everyone, and thanks a lot for the opportunity. So, firstly, regarding the packaging division's future growth regarding that, so this FSA exemption combined with this three-year carry forward, that means these large packaging users like FMCG food companies will face minimal near-term compliance pressure. So, the real inflection point we are expecting is only post FY27-28. So, is our understanding correct in this?

Apurva Kane:

I think you are talking about the RecTech technology that I talked about. As I said, there is a process that all the multinational companies and FMCG companies follow when it comes to choosing the packaging material that they want to choose or use. Now, given the advantages of RecTech technology that I have already mentioned, what we see is the first adoption on trial basis by these companies. Now, these trials normally run any time between six months to nine months before they decide if that is the correct solution for them, both technically and commercially. So, we will need first two or three early adopters of this technology before it starts rolling on. And that entire period is likely to be between 12 months and 18 months before we see traction.

Deepan:

Okay. So, the growth to which we are expecting on even RecTech and plus this converting business, that will gradually pass on to packaging business also in the future. Is that right?

Apurva Kane:

No, RecTech is going to give us incremental growth going forward. What we are talking about, 30% to 40% growth in domestic market is based on the current pipeline that we have for regular packaging by FMCG companies.

Deepan:

Okay, sure. Thanks a lot. I will join back.

Moderator:

Thank you. Next question is from the line of Marmik Khandelwal from Aarth Growth Fund. Please go ahead.

Marmik Khandelwal:

Hello, sir. Thank you for the opportunity. If the US market remains affected, are there any other markets we are looking for opportunities in?

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Apurva Kane:

Yes, we are definitely diversifying, particularly our packaging portfolio. The converting portfolio, we are already present in nearly 84 countries around the world. There isn't much that we can do as far as further diversification is concerned. But what we are doing is that packaging, we are taking it to Africa and we are taking it to Europe in current financial year. Also, we have resolved that we will open a branch office for CIS business in Russia. We have tied up with some local channel partners and through them, we will start distributing our machines into Russia little aggressively. So, that is the diversification plan of geographies. So, basically, our dependence on US markets reduces.

Marmik Khandelwal:

What was the revenue split that came from Russia in FY26?

Apurva Kane:

We have just started Russian market. So, we don't have revenue as such from Russia. There are a couple of machines that went from our converting division to Russia. We haven't sold anything from packaging division into Russia.

Marmik Khandelwal:

Okay, understood. So, basically, we have just started to work in Russia. Sir, you spoke about order book. So, what is the execution timeline that we expect from that?

Apurva Kane:

Out of the order book of 89 crores, there is one 9 crore order for 9-layer co-extrusion line. That will be basically H2FY27. The rest of 80 crores is for H1FY27.

Marmik Khandelwal:

Okay, understood. And what is the split between domestic and exports in this order book?

Apurva Kane:

The split is 62% exports, 38% domestic.

Marmik Khandelwal:

Understood. And can you tell the difference between margins that you expect from exports and domestic markets?

Apurva Kane:

our margin from export is about 60%. And in domestic, it is about 42-43%.

Marmik Khandelwal:

You are talking about EBITDA margin or gross margin?

Apurva Kane:

No, I am talking of gross margin.

Marmik Khandelwal:

Understood. And sir, there is a recent announcement that mandates companies to use, specifically FMCG companies to use recycled PET. So, what do you think that it how will it affect Mamata Machinery?

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Apurva Kane:

Actually, the new notification that was announced on 31st of March 2026 by Government of India through gadget notification works in favor of Mamata because that will accelerate the adoption of RecTech technology by FMCG companies in India.

Marmik Khandelwal:

Okay. And trial runs have been completed or yet to complete with this technology?

Apurva Kane:

We just started doing that with couple of large FMCG companies where samples have been provided and trials will progress. Also, there is a certification that is required for this kind of film. For example, the film that we are talking about has been tested by Indian Institute of Packaging, Calcutta for its performance in terms of barrier properties and it has been certified that it has a superior barrier. Same way, CPET has also tested this film from the point of view of recyclability and it has been confirmed by CPET through a report that the film has been found to be properly recyclable. We are also approaching certain agencies in Europe and in USA to get this film tested and to get this film certified as recyclable class A.

Marmik Khandelwal:

Okay, sir. I understand. Thank you, sir. Thank you for this. I will get back in queue if I would have any other questions.

Moderator:

Thank you. Ladies and gentlemen, to ask a question, please press star and 1 on your phone now. Next question is from the line of Sucrit D. Patil from EyeSight FinTrade. Please go ahead.

Sucrit D. Patil:

Good afternoon. I have two questions. My first question to Mr. Kane is, what type of strategic levers are you prioritizing in FY26-27 to expand Mamata's global footprint in packaging machinery? Accelerate adoption of automation and sustainability-driven solutions and manage risk from competitive pressures and raw material volatility? Just want a forward-looking guidance on this. That's my first question. I will have a second question after this. Thank you.

Apurva Kane:

Raj, our president is here with me and he will take this question from you.

Rajashekar Venkat:

As far as the new markets are concerned, as we have just now outlined, we participated in Interpack, which is the key event for packaging in Europe. Through that, we are opening our channels in Europe. We have also tied up with a local German company who are into end-ofline packaging machines, and through them we will be establishing our distribution network. So, that's one new global market we are getting into. African market, we have done a lot of groundwork in the last 18 months and that has started giving us results. So, we are looking at incremental revenue coming in from African market, primarily South Africa. We have also started work in CIS countries. As just now we confirmed, we have got clearance from the board to open a branch office there. We have also tied up with a local firm, which is more than 100 years old, in Russia and who have been in the distribution business. So, through these new associations, we are looking at getting into these new markets and thereby create incremental revenues. As far as Europe is concerned, in Germany, as I

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mentioned, there is a local firm which is into manufacturing of end-of-line. The firm is Carpentier GmbH. It is also a 40-year-old company and very similar business lines, offering solutions to brand owners or food companies, the space where we participate. So, we see strong synergies between both the companies and as we speak, we are already making progress and entering into German market and thereafter European market. So, those are all the new strategies that we have taken on as far as packaging division is concerned. At the same time, I would like to also mention that domestic market offers high potential and as most of the MNCs are stepping in India, last year given the tariff crisis, we deepened our strategies to penetrate more in the domestic market and that saw great results. So, we are continuing our strategic initiatives and also expanding the domestic business for not just packaging division but also the other divisions. Sucrit D. Patil:

Mr. Modi, what type of capital allocation and risk management frameworks have been applied in 2026-27 to balance dividend payouts with funding for R&D in advanced packaging technologies? Any hedge against forex and commodity volatility? And to sustain liquidity buffers for large export contracts, any green shoots there?

Apurva Kane:

I will take that question if you don't mind. The thing is that even by the end of FY26, we have remained debt free. We have maintained our cash on hand at 69.26 crores by FY26 and this is our war chest that allows us to do risk mitigation as well as internal approvals for any expansion that we might have to or invest in new technologies. We don't have to go out and borrow money.

Sucrit D. Patil:

Thank you and best wishes.

Moderator:

Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. Next question is from the line of Vardhaman Dunia from Trisula Capital. Please go ahead.

Vardhaman Dunia:

Hi, good afternoon. So, in terms of end consumer, what's the split between B2B clients and B2C clients? And if you could just highlight what's the gross margin difference between these products generally?

Apurva Kane:

We have zero B2C in business. Our entire business is B2B.

Vardhaman Dunia:

I mean in terms of end consumers. So, are your end consumers mainly B2C or mainly B2B and what's the split between those two?

Apurva Kane:

Our customers for extrusion business and our customers for converting business are B2B. While our customers for packaging machinery are basically FMCG companies, so they are B2C.

Vardhaman Dunia:

And the gross margin differentiation between these two segments?

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Apurva Kane:

I would have to look at it, but that is the business that is most interesting because that is the business where we are dealing with organized sector. We are dealing mostly with multinational companies and some of the marquee brands in India, which allows us to make healthy margins. But above all, it allows us to grow because their demands are better and more planned in nature.

Vardhaman Dunia:

Okay, understood. Thank you for the program. Thank you.

Moderator:

Thank you. We will take our next question from the line of Sanyam Shah from Solidarity Advisors. Please go ahead.

Sanyam Shah:

Because of the West Asia crisis, did we see any orders getting pushed where customers asked us to delay the delivery but have not yet cancelled the orders?

Apurva Kane:

Specifically, we have three machines that are on our shop floor ready. They were to be shipped in the month of late February, early March to Saudi Arabia, and we have not been able to ship them because of the crisis in the Middle East. Approximate value is about three and a half crores.

Sanyam Shah:

Okay. And, Sir, you mentioned that you see us getting back to our growth trajectory in FY27 with profitability normalizing. Do you think the growth will be in line with the 18-20% consolidated growth that we target, or will that be higher given this year's base was lower than what we expected?

Apurva Kane:

We have to use the base that we have created this year. We cannot work on a truncated basis as such, but we think that conservatively we should deliver about 15% higher top line as compared to current year.

Sanyam Shah:

Okay, understood. That's all from my side. Thank you, and all the best.

Moderator:

Thank you. Thank you. Next question is from the line of Marmik Khandelwal from Earth Growth Fund. Please go ahead.

Marmik Khandelwal:

Yes, sir. So, do we expect to maintain our margins going forward?

Apurva Kane:

Yes, that's what I said, that as our top line normalizes, so will the margins will also normalize because as you can see in gross margin levels, we have more or less maintained our margins. It is because of either one-off expense during the year which were higher like exhibition expenses and expenses due to the new wage code that became applicable from 21st of November 2025. Most of our expenses are semi-variable in nature and therefore once we go above a particular threshold, the same way you see that for an 8% drop on the top line, there is a disproportionate drop on the bottom line. Same thing reverses when you grow. If you look at our previous two years, for about 8% growth in the top line, for about 10% growth in the top line in FY25 as compared to FY24, our profit rose much higher significantly by I think about 18%

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if I am not wrong. So, that is how it works because most of the expenses are constant and semivariable in nature. Marmik Khandelwal:

Okay, sir. I understand. That helps. And, sir, there is an increase in input cost. So, who is bearing that increase in input cost? So, basically our FMCG companies are also passed on that cost or they are bearing the whole cost?

Apurva Kane:

We have taken stock of the situation. We have done a study of what our competitors are doing. We have done a risk analysis and then to maximum possible extent, we have passed on the increase in cost to end customers already.

Marmik Khandelwal:

So, can you bifurcate it in numbers? Suppose if there is an increase of Rs. 100, so how much have you borne and how much has your end customers have borne?

Apurva Kane:

That would be difficult for me to answer on the phone right now, but the majority of the cost increase has been passed on.

Rajashekar Venkat:

Since we are more into custom-built solutions and since we are in the capital goods industry, so most of the costs are passed on to customers on a project-on-project basis. Okay, sir.

Marmik Khandelwal:

Okay, understood. Thank you. Thank you so much.

Moderator:

We will take our next question from the line of LRS Capital. Kindly introduce your name and word with the question, please.

Lala:

Good afternoon, sir. My name is Lala. My question is, sir, you are saying that US business is down 50%. Does this strictly mean the US geography or all the geographies that are fitted by the US entity?

Apurva Kane:

When we say that the drop was by 50% in our US business, it includes the United States of America, it includes Canada, and it includes basically Mexico, because what happened is that when the tariff situation became worse, the Mexican market as well as the Canadian market also went into a tailspin along with the US. Because those two economies largely depend on exports to US, as you know.

Lala:

Thank you. My second question is, you are saying that in the converting machine, we are present in 86 odd countries, and there is not much scope to grow. So, what would be your market share?

Apurva Kane:

First of all, what I said is not that there is not much scope to grow. The word that I used is that we don't have more markets to diversify into. So, there is a difference there. Secondly, converting machinery business is a highly fragmented business, and therefore to work on exact market share basis is extremely difficult. But on brand recall value, I can assure you that

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Mamata is recognized globally for converting business as one of the top five brands in the world. Lala:

Got it. My last question is on the packaging side. So, when you are saying that 30%-40% growth should be possible in packaging, is it being driven by India or global markets? And number two, are we effectively replacing suppliers or existing machines, or is it new CAPEX,

Apurva Kane:

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business?

That would be helpful to understand. First of all, what we have said is that the domestic packaging business will grow, we anticipate that it will grow at between 30% and 40% in FY27. And this is based on the domestic demand of the machine by the domestic companies. These are largely driven by new projects and capacity expansion by FMCG companies in India.

Lala:

Sir, thanks for that. I want to also understand why are we able to win these orders versus competition? What is the value proposition here? Is it lower price for the same output, etc.?

Apurva Kane:

It is based on several factors, and they are essentially technology-based. I can tell you one thing, it is definitely not because we are cheaper. In fact, we are the most expensive in India today. If you just take price as the single criteria, it is because of cost-to-output ratio. We deliver far superior cost-to-output ratio as compared to any of our competitors in India. And that is what has been recognized, particularly by namkeen industry in India and by food processing companies in India. The second thing is that the technology that we offer will allow them to adopt new recyclable films seamlessly because that technology of cross-sealing patented technology is already embedded in those machines that we are talking about. Thirdly, it is the hygiene. We are the only company in India which offers pre-USFDA approved dairy standard 3A machines as a standard. Nobody else is offering it in India as of now

Lala:

You said about a patent around sealing technology, and you commercialized that.

Apurva Kane:

Is it a standalone product that can be commercialized or referring to a machine that has that technology? Can you clarify that?

Apurva Kane:

Yeah, so this is the technology or mechanisms that are part of an overall machine. So, it's not standalone, number one. And when we say it's patented, let me elaborate a little bit more. When we talk of recyclable films or even if we are talking about any other film which is not recyclable, if you want to seal any film very efficiently and with excellent seal integrity, you need to control certain parameters. And those parameters are temperature, time, and

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pressure. By using this technology, we are able to control all the three parameters extremely efficiently and digitally. And that is what gives us the cutting edge in terms of technology. Lala:

Thank you so much for the answers. Wishing all the best.

Apurva Kane:

Thank you. Thank you.

Moderator:

Ladies and gentlemen, Next question is from the line of Sahil Doshi from Thinqwise. Please go ahead.

Sahil Doshi:

Hi. Good afternoon, team, and thank you for the opportunity. Just wanted to understand more on the opportunity in Germany and Europe specifically. So, with this new tie-up which we have, what's the size of market which opens up for us in your assessment? Is it as big as U.S. or can it be? And if you can just give some qualitative remarks about, how should we think about Europe as a market in the next three to five years?

Apurva Kane:

Okay. I will answer first part of your question, Sahil, and the second part of the question will be answered by Raj. So, let me first of all give you some background. Whenever you want to sell in Europe, particularly packaging machinery which are projectdriven, as you know, you need a local partner. So, that is the first box that we have ticked. We now have a local partner in Germany. It's a German company that actually manufactures machines which have common synergy to our own products. As we speak, the machines that were displayed at Interpack have been transferred to their factory, and they are being installed in their factory for demonstration purposes. So, we will be using their factory and the people for demonstrating these machines to various people who have shown their interest in our equipment during the exhibition. Our partners themselves have a list of customers to whom they have been servicing for over 40 years, and we will be using this opportunity to reach across Europe and show these machines to various companies that are well-established in Europe. So, that is the first part. The second part is about the market size, and Raj, I believe, is in a better position to answer that.

Rajashekar Venkat:

As far as the European packaging machinery market size is concerned, it's quite huge. But what is the total addressable market based on the product lines that we have is sitting close to US$800 million. So, that's the kind of market that we are looking at to get into. Now the next three to five-year horizon that you are asking, this is our first year, and we are looking at some early installations. Once we have that in place, then over the next three to five years, conservatively, we should be looking at an incremental revenue of US$2 million to US$3 million, because Europe market is much more demanding and there are not too many new

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placements. Most of the placements are coming through the old equipment replacements or brownfields, but there are very few greenfield that are happening. However, I definitely see that at least US$2 million to US$3 million as an incremental revenue that we should be able to garner conservatively. I hope that answers your question. Apurva Kane:

Sure in the context where you say it's an US$800 million market, US$2 million to US$3 million seems like a rounding of errors.

Rajashekar Venkat:

So, what happens in these markets is you need to establish because it's a long-term game. That's why I said I use the word conservative. So, early installations are very important, and thereafter we have to continue to stay invested in brand building activities. And also, knowing that Europeans prefer primarily European brands, because this is something which we have experienced quite often, that they're not very open to non-European firms, and more so Chinese. And even in that fragment, when we look at Asians, India is still way below their priority list. So, that's the first hurdle that we have to cross, that we are not just an Indian brand, we are a global brand, and the products and solutions that we are offering is on par with the European technology, which is what we have been able to demonstrate in the Interpack exhibition. Now, this, which is a strong mindset and a cultural shift, would take time. And that's the reason why I'm being a little conservative. But as you know, after a few years of hard work, you then generally create a hockey stick effect. So, that is something that we would be able to see a few years later after we stay invested.

Sahil Doshi:

Right, that helps. Just checking on what would be the terms of this partnership, and is there any other synergies in terms of technology which we can cross-leverage? And incrementally, is this the only strategy for Europe which we have, or will we look at more multiple partners, or is that an option which we have?

Rajashekar Venkat:

As far as this relationship is concerned, we have a secondary solution for our horizontal Form fill seal machine segment, in consultation with this German firm. As I mentioned, they are strong in end-of-line packaging solutions. So, that is something that we have developed, and we are also bringing it to the European market and also offering it in Indian market. So, we are also leveraging this relationship for technology development and also upgrading our existing product line, and also possibilities of bringing in new product lines. So, that's one part. And the second part is, while we have tied up with them for Western Europe primarily, because in Western Europe, Germans are much more dominant in terms of their technical capabilities and also the product lines or other brands that are available. As far as Eastern Europe is concerned, we are looking at additional channel partners as we move forward. Also, for Western Europe, this is a non-exclusive relationship for the few initial years, and thereafter we will take a decision if we need to have more channel partners in that market, or if we are able to expand using Carpentier as a sole partnership form of that.

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Sahil Doshi:

Perfect. That really helps. Secondly, I just wanted to understand within the packaging segment, we said in the opening remarks YOY we are flat, but the domestic grew. So, could you quantify how much is U.S. of this packaging, as well as in converting, and what kind of recovery or growth we could see in the U.S. in the coming years?

Apurva Kane:

In absolute terms, degrowth in U.S. was to the tune of 31 crores. That is what we dropped in terms of revenue during the year in U.S. alone. And if you see the actual gap is 8%. It's not nowhere near Rs. 31 crores. And that gap was made up by domestic converting business that contributed Rs. 3 crores or about 6% as compared to FY25 higher. Domestic packaging contributed about Rs. 6 crores and rest of the world converting contributed Rs. 11.5 crores. So, total Rs. 20.65 crores were recovered out of Rs. 31 crores.

Sahil Doshi:

Sir, if I can just ask this differently, of the 48-49 crores of packaging revenue which we have seen this year, how much is domestic, how much is U.S.?

Apurva Kane:

So, out of that, Rs. 29.4 crores is U.S. And that de-grew

Sahil Doshi:

Versus last year?

Apurva Kane:

Last year it was Rs. 36.8 crores.

Sahil Doshi:

Okay. And the same for converting, if you can share.

Apurva Kane:

So, converting FY25 in U.S. was Rs. 31.63 crores and that dropped to Rs. 5.93 crores. That was a steep 81% drop in revenue. I'm talking only about machines

Sahil Doshi:

We hope that this should ideally recover both of these segments in the coming years.

Apurva Kane:

We have seen that there were a few orders that have come in in the Q4 and they will get executed by in the next two months or so.

Sahil Doshi:

Got it. And just one final question. In the co-extrusion, this thing, we had three large orders this year. So, is the understanding correct that two have been booked and delivered and one is pending? Is that correct?

Apurva Kane:

Yes, that is correct and these large orders are all nine-layer films, which has a very close connection with the RecTech technology that we are talking about. So, two machines have been executed in FY26, and one machine will get executed in H2FY27.

Sahil Doshi:

Perfect, sir. Thank you so much for this.

Moderator:

You are welcome. Thank you. As there are no further questions, I now hand the conference over to Mr. Apurva Kani, Chief Executive Officer, for closing comments. Over to you, sir.

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Apurva Kane:

Good afternoon, friends, again. Thank you very much for joining this call and giving us an opportunity to explain FY26 financials as well as FY26 opportunities that we present to investors into FY27 going forward. We look forward to our investors' continued support and their continued faith in Mamata Machinery Limited. Thank you.

Moderator:

Thank you. On behalf of TIL Advisors, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.

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