Rajshree Polypack Limited (RPPL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the quarter 4 and financial year 26 conference call to discuss operational and financial performance for Ashri Polypack Limited. As a reminder, all participants' line will be in listen-only mode and there will be an opportunity for you to ask questions. Please note that this conference is being recorded. Today, we have with us Mr. Ramsurup Thart, Chairman and Managing Director, and Mr. Sunil Sharma, the Chief Financial Officer of the company. I will now hand over the call to the management for their opening remarks, after which we will open the floor for questions. Thank you and over to you, Ramsurup, sir. Thank you, Divya.

Good evening, ladies and gentlemen, and welcome to the Rajshri Polypack Limited Earnings Conference Call for the fourth quarter and the financial year 2026. We extend a warm welcome to all our esteemed shareholders, members of the analyst community, and participants joining us today. I am also accompanied by our CFO, Mr. Sunil Sharma. We trust that you have had the opportunity to review our investor presentation. During today's call, we will discuss the company's operational and financial performance for the quarter and the full financial year, followed by a Q&A session to address your queries. Let me begin with a quick overview of our annual performance. FY26 was a steady year for the business, while the revenues remained largely stable, owing to macroeconomic factors. We delivered a meaningful improvement in profitability through better product mix and operational efficiencies. Seeing through the numbers, revenue for FY26 stood at Rs.332.18 crore, compared to Rs.329.74 crore in financial year 25, representing a growth of 0.74%. However, EBITDA increased to Rs.50.97 crore from Rs.46.30 crore in the previous year. With EBITDA margins improving to 15.34% from 14.04%. At the same time, profit after tax for the year improved to Rs. 17.22 crores compared to Rs. 14.46 crores in financial year 25. While the pet margins improved from 4.38% to 5.18%. Coming to the fourth quarter, the profitability momentum strengthened during the fourth quarter, with profitability improving significantly despite impact of the Middle East war on the pro-metal prices as well as exports. In quarter four, our company delivered a revenue of Rs. 91.62 crore compared to Rs. 90.06 crore achieved in Q4 F525. With EBITDA increasing to Rs. 15.70 crore as against Rs. 12.31 crore and EBITDA margins improving from 13.67% to 17.14%. Further, the company reported profit after tax amounting to Rs. 6.38 crore for Q4FY26 as compared to Rs. 3.63 crore in Q4FY25. With pet margins improved from 4.03% to 6.96%. Domestic and export market segments. Now, turning to our domestic and export markets, exports remain the key growth driver during FY26. Export revenues increased by almost 30% year-on-year to 70.08 crore from Rs. 53.87 crore in FY25, reflecting strong traction across international markets despite last month headwinds of the Middle East War. During Q4 FY26, exports revenue stood at Rs 14.09 crore compared to 19.55 crore in the corresponding quarter last year. This was primarily due to geopolitical disruption. Despite this near-term headwinds, our export business delivered strong full-year growth supported by sustained demand for our injection-molded products from our existing customers, reflecting the strength of our long-standing customer relationships, product quality, and reliable supply capabilities. On the domestic front, revenue stood at Rs. 262.10 crore in FI 26 compared to Rs. 275.86 crore in FI 25. Encouraging the domestic revenue increased. In quarter 4 FY26 to Rs. 77.53 crore from Rs. 70.50 crore in the corresponding quarter last year. Domestic business continue to be driven mostly from sheets and thermoform packaging products to our distribution customers and to our distribution network. On the product-wise performance during FY26, the injection molded category which we had started four years back is now emerging as the strongest growth segment. Revenue from the injection molding category increased from Rs. 42.02 crore in FY25 to 63.65 crore in FY26, a strong 51.4% growth. At the same time, while Thermoform packaging product remains stable at 199.73 crore, Due to weak demand from one of our key customers, sheet revenue declined to Rs 65.99 crore from Rs 84.5 crore as we reduced our focus on low margin sheet sale as a product category. Speaking of Q4 FY26, while the quarter saw an increase of 9.72% in revenue from thermoform packaging products to Rs. 61.36 crore, the sheet sale and injection molding segment saw a decline of 14.63 and 10% respectively. As I mentioned earlier, a key focus area during FY26 was improving profitability rather than pursuing volume-led growth. During the year, we rationalize low-margin SKUs and low-value customers while deepening engagement with key accounts and increasing our share of wallet. Combined with tighter capacity discipline and cost optimization initiatives, it has helped us to improve margin despite relatively stable revenues. On the capacity front, we expanded our injection molded capacity by 45% from 3,300 metric ton to 4,800 metric ton. At the same time, we continue to strengthen our presence in the domestic market. We expand our customer relationship across three segments. We remain bullish on injection molding product category with addition of another 1,000 metric ton per annum capacity under toll manufacturing agreement. This will take our total installed capacity to 5,800 metric ton per annum and will be unable to focus on catering both domestic as well as the export markets. In case of sheet and thermoform products, while we added some more capacities during the year, the primary focus remained on cost and profit optimization with better utilization of available capacities. We do not foresee any significant capacity addition in the category during FY2627. Okay. Operationally, on the cost front, our gross margin during the financial year expanded to 41.35% as compared to 37.97% for previous financial year. However, manufacturing expenses increased from 9.75% to 10.55% of revenue, primarily due to setting up of Unit 3, where we have transitioned from job work model to in-house manufacturing in case of Extrusion in thermoformed packaging products, especially PET. We expect the manufacturing expense to rationalize as we scale up unit 3. Update on Oli VicoPack, our joint venture company. Our joint venture Oli VicoPack continue to make encouraging progress and has emerged as one of the leading manufacturers in this segment. First, I would like to run through the numbers. Looking at the financial performance of Oli VicoPack, the most important point to note is that the company turned EBITDA positive on the full year basis. Olive EcoPack delivered revenue of Rs. 52.67 crore for financial year 26 as compared to Rs. 16.37 crore for financial year 25. At the same time, EBITDA of the company stood at Rs. 2.2 crore for the financial year 25 as compared to EBITDA loss of Rs. 8.28 crore for the financial year 25. Further, the net loss of the company narrowed to Rs.18.8 crore as compared to Rs.22.6 crore in FY25. In case of Q4 FY26, revenue of Polyvico PAC increased by more than 90% year-on-year to Rs.17.01 crore as compared to Rs.8.9 crore in Q4 FY25. With increasing the revenue. EBITDA turned positive to Rs. 2.85 crore as compared to loss of 1.05 crore in Q4FY25. While the utilization remained below the optimal levels, they continued to improve quarter after quarter. The growth was majorly impacted by geopolitical disruptions and war-related uncertainties, affecting demand and export momentum. We are witnessing strong traction from large domestic institutional customers alongside growing interest from customers from Europe and UK. While we have also made meaningful progress in the US market, the overall business environment remains challenging. Nevertheless, we remain confident of sustaining our growth momentum and continue our progress towards profitability. During the year, both RPPL and Olive actively participated in several prominent domestic and international exhibitions. This platform continued to provide strong visibility and generated encouraging customer interest across the markets. Going forward, our focus remains on translating these engagements into higher business volumes and deeper market penetration. Looking ahead, our priority remains clear. Driving profitable growth, improving capacity utilization across businesses, expanding our export footprint, and accelerating the scale-up of Olivico Pack. While the external environment remains uncertain, we believe we are well-positioned to capitalize on the opportunities ahead and continue creating long-term value for our shareholders. With this. I conclude my opening remarks and will now be delighted to address your questions and hear your valuable perspectives. Anybody who wants to ask the question can raise the hand. Kunal, you can take over. Hello. Yeah.

Am I audible? Yes, yes, you are audible. Yes, thank you for the opportunity. So, first question is regarding our food container products, those black food containers that we have, the FMCG segment. So, one of the peer in our industry, you know, who is specifically operating in that segment. So, they said that, you know, you require proper qualification and standards like HACCP and FSC for you to export the products outside and, you know, have better margins. So, can you just elaborate like what kind of margins do we make on those products?

See, overall, on injection molding, we operate in EBITDA margins of roughly 12 to 13%. That is the average margin we operate at. For injection molding products, for thermoforming products, we operate in the EBITDA margin of 15 to 16 percent.

Any participant wish to ask any question can raise hand.

Hello. Yeah. Yes, sorry. I think something happened with the connection. Thank you for taking my question again. So regarding my previous question, so that player is making margins at around in the range of 18 to 20 percent, and they are selling those, you know, black container food products, that food boxes. So just wanted, you know, just wanted some color on that. Can we make those kind of margins ourselves as well? And do we have those certifications?

We have all the certifications in the place because you definitely cannot export without those certifications in place. But there are different applications, different materials. So, we need to know specifically what exactly is that. So, in this particular business, depending upon the applications, the margins do vary from 12 to 16, 18 odd percent, depending upon the various application and the customer segments.

Right. Understood. And the second question is regarding revenue and EBITDA for the next two years. Like, what sort of outlook do we have over there?

So, for the financial year 26-27, we are looking at roughly 370 to 380 odd crore of revenue at the moment. And EBITDA in the range of 15 odd percent. So, that is what we are looking Thank you very much for joining us for this particular financial event.

Hansen, anything for FY28? Like broad range, not exact numbers, but broadly.

Yeah, with some capacity at expansion, we should be able to go to 420 to 430 crores. With similar EBITDA, right? Yeah, EBITDA, maybe with scaled up this thing, we should be able to reach 16%.

Right. Because now we are already doing 15% as of now. Yeah. Understood, sir. Thank you.

Any participant wish to ask any question can raise hand.

Hello. Hi, sir. Am I audible?

Yes, yes.

Sir, I wanted to ask on the olive. So are we looking to, you know, break even at pad level in FI27 for olive?

Yes, definitely. So as I mentioned, like we need revenue of roughly around 90-95 odd crores. So, we will be definitely looking to break even in this particular year for OLIVE.

So, what sort of PAT contribution from OLIVE are we expecting?

We are saying that we will look at breakeven for this particular year, and from next year, probably, it will start contributing to the PAT.

Okay. And on the sheet segment, I believe that our sheet contribution in total revenue and injection molding is down quarter and quarter. So is it intentional or is something driven by demand?

As I mentioned, there are a few low value added products which we are coming out of and focusing on higher margins. Hello.

Yes, sir. And lastly, on the margin side, so our margins have improved significantly, both quarter on quarter and year on year. So any major reason behind that?

As I mentioned, like, it was a change in the product mix and moving away from low margin. That's one of the major reasons, I would say.

So, can we expect similar margins going out for the full year? Yeah. Okay. That will be all. Thank you so much.

Any participant wish to ask any question can raise hand. Any participant wish to ask any question, can they raise hand? Any participant wish to ask any question can raise hand.

Yes, thank you for taking my question again. I wanted to understand like the current capacity that we have right now, what can be the peak revenue that we can achieve just from the current capacity?

Around 390 to 400.

390 to 400. Right. And the KPX that we are doing, the expansion that we are having, which is underway. So like when that is added, what can be a peak revenue? We are not looking for any major capex expansion, maybe around

5 or 6 odd crores in few volts here and there, and maybe optimizing few machines, that's the maximum capex we are looking for this year. But gradually with this small capex, we can, as I mentioned, go up to 4 to 20, 30-odd crore maximum with the existential stentor.

Right, understood. And what is the debt outlook for FI27?

We intend to reduce it by 10 to 15 crores on the working capital requirement. That's what we are looking at.

Okay, understood. So, the debt level won't increase substantially, right?

No, from here, we are looking to reduce it only further.

Okay, so we are seeing 10 to 15 crores of repayment of debt in next year?

Yes, from the term loan account, we intend to reduce around 8 to 10 crores and from the lesser utilization of cash credit by around 5 to 7 crores.

Okay, understood. And what is the capacity utilization?

Across different processes, they are different. Like for extrusion, it is in the range of 90%. Suboforming is in the range of 85-86%. Printing and sleeving is almost at 97-95%.

Okay, so from 330 crores to 400 crores of top line that we are targeting, the incremental 60-70 odd crores, we are looking at like the current capacities will have, you know, incremental volumes, right? Yes.

Okay. Yeah, so as we announced, like we have just added 1000 tons in injection molding. So, the major portion will definitely come from injection molding in this 60-70 odd crores. And balance will come from existing setup by fine-tuning the efficiencies of existing machines. Okay, sir. All right.

Thank you.

Any participant wish to ask any question can raise hand. Any participant wish to ask any question can raise hand. Any participant wish to ask any question can raise hand. As there are no questions, Julia, over to you.

Thank you so much. As there are no further questions, I would now like to hand over the conference call to the management for the closing comments. Over to you, Ram, sir.

Thank you, everyone, for joining us today and for your questions. We sincerely appreciate your continued trust and support in Rajshri Polypack. We remain committed to deliver sustainable growth, strengthening our market presence, and creating long-term value for our stakeholders. Thank you, everyone.