Pakka Limited (PAKKA.BO) Q2 FY2026 Earnings Call Transcript & Summary

Good evening, everyone. My name is Pranay, and I lead the Brand and Marketing at Pakka. So on behalf of the entire team, I'd like to extend a very warm welcome to all of you to our Q2 of financial year '25-'26 investor call. So, thank you for joining us today. I'll like to introduce the leadership team, Mr. Ved Krishna, who is the Business Head; Ms. Neetika Suryawanshi, who is the Finance Head; Mr. Shubham Tibrewal, who is leading the Food Service business, -- Food Service Business Head; and Mr. Sachin Srivastava, he is leading Legal and Secretarial. So he's the Legal and Secretarial Head. My -- I am leading the Brand and Marketing function. So I'll just share my presentation to get started. I hope my screen is visible. Okay. So just to set the tone for the -- today's presentation, I'd like to begin with a short video, which is a short glimpse of our upcoming project Jagriti and how it is progressing. And with this, we are gearing up for our next phase of growth. So I'll like to play the video now. Just a second, just give me 1 minute. [Presentation]

So that was just a glimpse of the upcoming project, and with this, I'll like to hand over to Ved to start with the presentation and set in the context.

[Foreign Language] Thank you, as always, for joining. And we are, of course, very excited to share progress with you and also to, of course, and this -- to answer all your queries. We understand there may be some concerns propping up, and we are very happy to address those. But for us, of course, there is a lot that is happening, and we find that we are very much strongly back on track. We are doing various things. I'll bring you up to speed and set the context and then, of course, talk about the numbers. But I think this is a quarter where we will have to probably look beyond the numbers, and we'll get you up to speed on that. Let's go ahead, Pranay. So the first is that there is a lot of progress on the innovation side, and there is a lot of breakthroughs, particularly in the food services side as well as in the flexibles. We will talk more about it. Shubham, in particular, will address some of the products that have been launched or is about to be launched. There were certain bottlenecks that we were facing, but those have now been more or less removed. And again, there is a significant turn that we have made, and I'll talk a little more about the flexi side as well as we go ahead. The PM3 -- part of the Jagriti project was optimizing PM3. The press change that we had thought about has been done. We are now stabilizing the machine. We have now come back to the original production levels and are now looking to surpass that. So in the next quarter, you will see things changing on the PM3 size -- side, which produces specialty food wrap -- food service grades. Again, Shubham will talk about food services. We are building a very strong model to make sure that we utilize the maximum efficacy of the business, not just by optimizing our own production, but by outsourcing significantly and building scale, and those are being led very effectively by Shubham and the team there. Again, Pranay started with Jagriti. There were some bottlenecks and some delays that we have faced mainly on account with certain fund release and resulting from that certain delays from the suppliers. But we are working on speeding that up. We may not meet the time line we had set last time, but we are still making sure that we try and meet the second quarter, or the first quarter of the next financial year. There is a lot that we have done in order to go asset light. There is some things which you will notice in this quarter coming ahead. We are outsourcing products which are similar to ours and building a stronger base with our buyers, ensuring that they get more products, especially where we can produce pulp and take offtakes from suppliers. And I'm here not talking about food services. This is mostly in the Wrap & Carry segment. Again, like I said, there is a significant shift that we've made on the flexibles side. As you are aware, we had launched a few products a couple of years back, but it has been slow on the offtake. One big part of that was for the supply chain because we were buying this special paper from Europe, getting it to India to get 2 kind of conversion processes done. Now we have developed this paper in India successfully, and we have gotten the supply chain much more optimized, actually resulting in over a 40% cost reduction. So again, you'll start to see those changes coming in the next quarter. In terms of business performance, we have a short one. I'm sure you guys have a lot of questions there. The main issue that the company faces is the extended downtime that we took in order to start PM3. There was a challenge that we faced because one of our energy-producing divisions, part of that is an alternator. We -- there was a short circuit there, which meant that we had to rewire the alternator, which actually was supposed to take 45 days. We have managed to condense that and start in 25 days. But that meant that the shutdown actually got extended, which meant there was a direct hit on the sales -- production, sales and of course, the bottom line as well. We are back on track this quarter in terms of profitability as well. October has been very good for us, and we are sure we are going to show promising numbers in November and December. So by the time we meet next quarter, you would see a very different performance from this. So we are not discussing too many numbers in detail. I'm sure you'll have a lot of questions. And my team and I would like to -- we would definitely try to field those. So in terms of flexibles, the idea is to stabilize the performance for 2 of the grades. One is M1 and M3. We have done a lot of efforts in terms of the supply chain. Our team even today is sitting in England to do the NM, which is a non-metallized structure. And we are expecting that to be completed within this quarter so that we can actually order the quota for PM4 as well, as it's the same for any project that we are doing outside India. So those will also be finished this quarter. But the good thing is that significant customer inquiries are starting to come in. We have about 60 active customer engagements. We also have about 20 trials that need to be done this quarter, resulting in certain orders coming in this quarter. Shubham, over to you.

Good afternoon, everyone. I'm Shubham Tibrewal. I'm leading the Food Services business at Pakka. Pranay, if you can move to the next slide, please. So, just wanted to start with sharing some highlights on the business for the past quarter. We implemented quite a few initiatives to grow our revenue, and those initiatives have started to bear fruit this quarter already. We'll see that a bit later in the numbers. But I think the real impact of these measures will be felt in all the consequent quarters that we will have, but we are on the right track and the growth prospects are very positive. And a big area of focus for us was to increase our B2C share of revenue. Historically, the predominant area of business for us in the food services was B2B, but we have now started aggressively investing and growing in the B2C category as well, and that is being reflected by a doubling of our revenue between April and September on B2C channels, so from INR 40 lakhs to INR 80 lakhs. We will further look to grow our share of sales from this channel by actually increasing the number of customer touch points. So currently, it's 3. We're looking to go to 10 touch points, and these include both online and offline channels. We've also implemented a very customer-first strategy to target key accounts, where we think there is a lot of business potential in terms of volume, in terms of brand maturity. And one of those such accounts is IRCTC, which we are very pleased to announce that we received the first order from. And the last and final thing which we are working very intentionally towards is to basically change our product mix and add more high-margin products, which will basically help us increase our revenue and of course, the profitability basically to optimize our gross margin. One of the big drivers of change that we've already started seeing and which will continue to impact and drive our growth story is the new products we bring to the market. So we have successfully launched clamshells. And in the first month of launch, we achieved INR 20 lakhs of sales, which was a very, very positive result for us, and we look forward to growing this category significantly in the coming months. We have also planned a lot of new launches and new product categories in the rest of the year, and our aim is to double the product offering by the end of the financial year, which will again be a significant growth driver for the top line. Some of the products that we will be launching in the coming quarters will be a new range of delivery containers, which will basically include round and rectangular shapes, a range of delivery meal trays and an assortment of ancillary products to really be a 360-degree food service full stack one-stop shop supplier to our customers. And lastly, another big product category for us, the leak-proof delivery containers, which we are hoping to launch in Q4. In terms of the financial performance for the past quarter, our revenue was INR 15.74 crores, which was up 14% from the previous -- the same quarter in the previous year and the previous quarter. Our PBT growth took a hit in comparison to the previous quarter. The previous year number was slightly biased due to a subsidy which we had received. But yes, so we had one -- a slightly more than a INR 1 crore loss in the previous quarter, which is primarily due to our increased presence and activity on the B2C front, which meant we invested more in marketing in the last quarter. Over to you, Ved, for any comments.

Yes. So I know it's very, very early for Rolando. So I don't think he's able to make it. So I'm going to help him with the updates on the Americas side. Let's go ahead. So we have basically looked at -- that's a spelling mistake, molded, but basically looked at finding ways to increase our speed in the Guatemala project, where we realized that because of the current geopolitics, there's a huge opportunity for the molded products, primarily because the production has had to shift from China, Vietnam, India to other places like Thailand, and we feel nearshoring will give us a lot of advantage. So we are looking at a lower investment, which means that we can swing it through much faster, which will result in revenue and EBITDA, and we're looking to finish it within the next year rather than taking a longer time for the larger project. So the larger project continues, and we are looking to raise this debt, which is currently being done, and then we'll move ahead for the larger $300 million on the background. What our basically focus has become is to quickly launch in Guatemala rather than going in for a delayed production. So the idea is that we capitalize on what is available right now, and that also enables us to focus more on India at this stage. So this is in terms of just the time lines. Like I said, by quarter 4, '26, we want to start production and make sure that the products are available in the Americas by then. Okay. Just the quarterly plans that we had promised last quarter, we are very happy to inform that most of them have been moved forward with. So we have rationalized, as Shubham talked about, the Food Carry division, and we are expecting very big changes in the coming quarters. Again, the supply chain, Shubham didn't talk about this, but ultimately, now there are 4 outsourced suppliers, and there is a rationalization, which he talked about. And also, we are looking to launch various new products and some of them have already been launched. Innovations Lead was important, and it is in progress. That remains one of our big -- like big things that we have to do within the -- this quarter, and I'm sure we'll find a solution to this. I know this has been long pending. Again, it has been optimized. We did hope that we will find ways to get it done within this financial year, but it seems like it will go to July 2026, and the team is working day and night towards this aim. In terms of the international project, we have looked towards it and making sure that we move ahead by quicker molded fiber project rather than going in for a $300 million project, which was taking up a lot of our bandwidth and energy. We felt that let's swing the smaller project, get that done so that there is more capacity for a bigger project. We are also making certain commitments for this quarter so that you can hold us liable for those. So we will launch the delivery range. As Shubham talked about, the team is already moving for the right technology. It is a game-changing solution that has been created over time, and you will see it hopefully in your homes in the next 3 to 4 months. Again, there is a lot of work we have done in terms of product range rationalization to be able to reduce the number of products, to optimize the machines and to optimize the production. We are also looking to do various innovations on an asset-light model, like I talked about. You will notice a significant shift in productivity in the next quarter as well. Like I said before, I have come in as an Interim CEO for India to make sure everything is stable. But we have started the search now for finding the right person. So in case you guys have any recommendations, they'll be more than welcomed. And of course, we have been on the search for Innovations Lead, and we will try to close both these within this quarter. We have significantly stepped up the gas on the flexible side. There will be a buildup. Like I said, there is a significant pipeline that has been created, and the idea is to scale it up significantly before the PM4 comes in play. Again, like I said, there will be a speed up of the Guatemala project. Hopefully, by the time we meet next, it would be well on the way. That's a repetition. You can go ahead. Thank you, all. Pranay, back to you.

Thank you. Thank you, Ved. With that, we can start with the question-answer round. I know a lot of you have already had your hands up since the starting of the presentation. So -- but we'll move sequentially. [Operator Instructions] I'll just start sequentially. Mr. Jeet, you can go ahead with your question.

Can you hear me, Pranay?

Yes, I can hear you.

Sir, my first question is if you can help us explain geography-related numbers in a bit detail. I mean what is the CapEx which has been done till date? And with revised cost now coming in, what is the pending CapEx to be incurred? And then with this pending number, how do we plan to fund the pending CapEx? So how much is it going to come from undisbursed bank limits, which are already tied up, but undisbursed? And how much is it going to get funded with some additional debt because of cost overruns, probably if you're looking out for additional debt for further new tie-ups? And how much will be raised via equity dilution, because we are assuming Carnelian is not coming in. So -- because we'll have very little accruals coming in, in the next 6 to 9 months say, somewhere roughly about INR 20 crores, INR 30 crores max. And if this dilution were to happen, it would happen at what indicative rate because given where our stock is right now. And further from the presentation, we saw that we're planning to include another fresh $8 million towards Guatemala. So with the scale in the balance sheet, how are we managing these numbers is what we wanted to understand in a bit detail.

Thanks, Jeet, as always, for your very incisive questions. And Neetika, I might need your help if I miss out on anything. But the CapEx that we have already incurred is about INR 400 crores. There is another INR 350 crores odd with the increase in CapEx from INR 675 crores to INR 750 crores that has to be incurred. You're totally right. We are not sure whether Carnelian will come in. They did ask us for a 6-month extension because they have 18-month period. That said, we are still speaking to them. And of course, with all the initiatives that you have seen right now, we are also hoping that the markets will respond accordingly, as we begin to launch these products that you have heard of and of course, as the numbers begin to come back up and also improve further. So that is, of course, a hope in terms of Carnelian. They are people who do stand by their words. So I'm expecting them to come back. That said, like you're right, we have to keep the project moving. So we are looking at numerous options right now in order to structure it. We are mainly looking at ways to go for a structured bridge kind of capital rather than going in for a long-term expensive capital. The idea is definitely not -- so far, it's never been to further dilute. You're totally right. At this share price, we don't think -- we think it's undervalued. So the only dilution that might take place is I might borrow and invest money and I love to invest at even a higher price than what is there right now. So I might borrow in a personal capacity and invest. But beyond that, we are not expecting any dilution to happen. So you can rest assured on that. Guatemala, no. We had total commitment that the Board had allowed was $10 million. We stand by that. The current exposure we have done is about $8 million. So we still have to provide another $2 million. And that will be part of the structured capital that we are going to raise because that is needed for the project to go through, and also, for the opportunity to be able to capitalize on what we have already created there in terms of the U.S. market, the ability to build a team, et cetera, et cetera. There's a lot that has gone in there, and we want to make sure we capitalize on that. But yes, from an Indian equity holder perspective, you can rest assured that we are not expecting a significantly higher sum than $2 million, so -- which has already been committed to them. But of course, there'll be no stress on the Indian balance sheet. We are not expecting to stress. We would not want that ourselves. So it will basically come from the structured capital that we bring in. Neetika, anything I've missed? Otherwise, Jeet back to you.

No, all good. Anything else, Jeet, that you wanted to...

Yes. Neetika, you can just give us a breakup. I mean the pending CapEx is INR 350 crores, right? So from here on, how will this INR 350 crore be funded? So how much from, say, unsanctioned or probably to-be-sanctioned bank limits? How much from internal accruals? And how much has probably come from the new structure that you are now looking out for?

Basically -- sorry, I'll continue and then you can add on, Neetika. So the gap is only the amount of funds that were supposed to come from the equity and a little more maybe. So maybe instead of INR 75 crores, it would be INR 100 crores. And correspondingly, the banks will provide INR 200 crores to INR 250 crores. So that's the gap we need to fund, say, a little over INR 100 crores. So that is what we will fund. Of course, there are many, many opportunities that are coming our way where the structured fund is saying, let me take the entire INR 600 crores. So those are also being weighed out depending on the cost and the tenure. So we know that the company is extremely healthy. And the possibility is that, okay, we want to move really fast. And for us, right now, more than the cost, time has become of essence. So of course, those are also opportunities that we are assessing, where a fund comes to us and says that, okay, let me take the entire INR 600 crores, including all the banker share. That way they are much -- they have much more collateral. And there are others which say that, okay, let me just give you INR 150 crores, -- say, INR 150 crores to tied up the issues and you -- against that for the funds that have already been committed by the bank, you are able to draw those out. So that should more or less suffice for us, and we are expecting to tie that up by December. Neetika, anything I think...

No. All good. Thank you.

Perfect. And sir, my second question is if you can explain how our new product pipeline is evolving? Because in your opening remarks, I think you said that probably in this Q3, I think you're closing down on non-metallized and probably will end up ordering a coater. So when you're about to order a coater, which means you've already finalized the recipe, and that happens after trials is what I understand, right? So now are we going towards non-metallized or again, we are first considering barrier substrate, which we spoke about in the earlier con call, or barrier substrate -- I mean, the barrier- coated is out right now because you found success in non-metallized. So how are we looking forward with respect to research and development for Jagriti coater is what I want to understand. And then, by when can we expect offtakes to come in? I mean, how close are we on the success of non-metallized?

Yes, superb. So again, in terms of the -- this is, of course, our biggest play. And if you look at my personal time, I would definitely prioritize that over everything else. So again, in parts, your question. So let's start with what we are doing right now. So staying with the metallized and offtake, I'll club those 2 together. So the first one is that what we decided to do was to bring the supply chain into India. And that has resulted in almost a 40% cost decrease and quality improvement as well. So that we are already working on at least 20 customer trials and maybe over -- the team said a little over 60 pipeline. So there is a significant effort that is happening in that direction. Of course, it all depends on how many successes we have, what is the size of that offtake, et cetera, et cetera. The second one, of course, is the big hairy audacious goal, which is the non-metallized. And I'll club the non-metallized and the barrier [ coating ]. It's more or less the same thing, just the non-metallized structure is much more dense. So as we speak, actually, we've conducted trials last week in India. Our team is actually stationed right now in England. I'm actually flying tomorrow to England to see the finals of those trials. Then we are, again, meeting somebody who we are exploring for innovations who is a barrier specialist and seeing if they can also come in, so further accelerate. So in terms of time line, what I think we can commit to right now is to definitely commercialize the metallized substrate further this quarter and find a solution for either -- the perfect solution. Let's hope for that in the non-metallized thing, filling which deciding the barrier-coated applications and finalizing the solution. Those 2 should take place within this quarter so that next quarter onwards, we can -- like you said, we have to order a coater. Ultimately, coaters are also going to take time and the project is much more viable with the coater. So I would say those are the time lines in our mind.

Perfect. And sir, just a follow-up. I mean, so barrier-coated is smaller shelf life is what we understood and non-metallized is like larger -- it's flexibles, right, which is larger shelf life, probably difficult product like chocolates. So what our eventual end goal is? Do you want something like a sugar sachet, which is a smaller shelf life or our eventual goal of something like a chocolate? I mean where are we headed, I mean? These 2 are, again, 2 different things, right? I mean, where you're putting your energy on. So just when you're deciding to order a coater...

Yes. Jeet, they're not different. They are just a different complexity. Ultimately, both are barriers. Typically, a sugar sachet has a barrier layer mainly for heat sealing. So that's a very different application. You're right. It's a much shorter shelf life. The bigger issue is, of course, the moisture and the air resistance. So that's the bigger issue. And of course, for us, the holy grail is when you hold a packet of chips in your life a couple of years down, you hold a Pakka substrate, and that is compostable and marine and terrestrial safe. That's the holy grail. That's what the team works against and works for. Everything else is work in progress. It's a step in the right direction. So whether you talk about a sugar sachet, or even a chocolate packaging is work in progress actually. It's not a potato chip pack. So ideally, you want a nitrogen flushed potato chip pack that is available at huge quantities. That is what will give us true success, I feel because that's the garbage that you see all around. And I know I will have to hand it over to Pranay. He's already been -- in your 3 questions you've asked, but I'll... understand.

Thank you. [ Kashvi ], you can go ahead with your question.

So my first question is largely to understand quarter 2. So, because even considering the shutdown effect, it's very difficult to analyze. So what led to sharp fall in the profitability? So even if we consider the extended shutdown, the top line seems fine, but there is a sharp decline in EBITDA, so which dropped to around 2%. So what led to this sharp decline? And have we faced any NSR pressure? Can you quantify that? Also, our employee expense has been in the range of around INR 12 crores to INR 13 crores in the last 12 quarters. And we were aware about the ESOP effect. But have we faced any material talent exit post Jagdeep to justify this fall in employee expenses? If you can explain this in a bit detail?

I'll go ahead and take this. In terms of the EBITDA decline, Kashvi, in terms of the raw material, -- I basically break up into 5 main cost sets that we have. In terms of the raw material consumed, the prices have remained fairly stable in terms of raw material and the chemicals. There was -- there were some issues with the stabilization of PM3 and also the pulp machine and that added to higher cost of goods sold because when the machine starts, then there are certain operational expenses that are usually higher than the normal ones. In terms of power and fuel, a slight increase in the consumption because of the rainy season. So the consumption is generally higher. For the employee cost, there were some provisions that we had booked for bonuses. But because of the present situation that the organization is going through and as you see quarter 2 as well, we decided to lower our cash outflow for this quarter. So those provisional impacts have been reversed. And finance costs remained more or less stable and so were the other expenses more or less stable. I hope that answers your question. Ved, sir, if you want to add anything.

Yes. Okay. So my second question is to understand our operation. So post shutdown, can we expect INR 100 crores top line of sales run rate to clock in quarter 3, plus additional improvements that will be coming from PM3 expansion, new pulp mills and new power plant? And also, can you explain how did our bagasse pricing go for the upcoming offtakes? Did we face any pricing increase?

Okay. I'll answer one by one. In terms of the going ahead commitment, citing a number would be incorrect on this platform and at this stage. All I would say is that we are all working towards achieving where we want to be and where we should be. So we have seen improvements happening, and we definitely should be back on track with this quarter. And if things go as planned, quarter 4 should be even better. In terms of -- sorry, that was on the operations. And you asked -- the last question was? I missed it.

I can take that. Bagasse pricing. Yes. So bagasse, Kashvi, what we do is that it's very important for us to have a long-term focus for all our operations. What we tend to do is to do 5-year tie-ups with our sugar mill partners. And this year was interestingly the year when it rolls over. So we did roll over with an increase of about 3%. So there was a 3% increase. And it is -- actually, this year was 6%, and then it becomes a little bit lesser in subsequent years. So say an average increase of about 4% to 5% every year is going to be there. And we are actually very happy with that. We want the bagasse or the sugar mill suppliers to feel this is a great place for them to be. We don't want them to start producing other stuff. So that's something that is strategically important for us. And thankfully, we've had 30, 40-year relationships with our partners, and that is the basis for that. So we want to keep our raw material very stable. Yes, there will be a 5% to 6% increase in the coming sugar season, but that is important for us for the long-term future. Pranay?

Ravi, you can go ahead with your question.

First of all, I'm a great admirer of Pakka's vision and have very high regard for Mr. Ved Krishna. So just have one question basically on the repeated execution delays. So please give me a couple of minutes to explain the context. So I've been following Pakka closely since last several years. So let me give some examples. And sorry, I'll be blunt here. So you've seen delivery containers being delayed for more than 5, 6 quarters. And then development target date keeps getting pushed. I remember Guatemala project. It started in mid-2023. And I think the project was supposed to be complete by 2025, then it got moved to 2026, thereafter 2027, May. And last quarter, I think it was mentioned [ 2028 ]. And now unfortunately, Jagriti is also delayed, I mean. It was moved to 2025 calendar year to financial year and now again August 2026. So as an investor, and also as a consumer, actually, it's very disappointing to see all these delays literally in every important project. So I think I'm sure you also would agree that even customers will probably lose interest at some point of time. So when management shares such growth projections in your formal channels like annual reports or investor presentations and then miss by a big margin, so I think it's unfair to all the stakeholders who trusted the management. So bagasse market cap, I'm sure you've seen after the recent results, it's come down from INR 2,000-odd crores to INR 500-odd crores. The growth is stagnant for 3 years and I think this will be the fourth year in a row, even if you take out the shutdown effects. So honestly, it's very, very hard to believe this is happening to a company which is very innovative and has quality products. I personally have tried your products and it's top notch. So my question to Mr. Ved is, what according to you are the reasons for repeated failures by your team in spite of knowing the importance of all the timely delivery? And what are the packing steps that you plan to take to ensure that this is not [indiscernible]?

Yes. Thanks, Ravi. Thanks, first of all, for being so appreciative and for following our progress. I couldn't agree more with you. And ultimately, in life, in general, we only have ourselves to blame. So there is nothing else, but our own learning curve. And you've given some examples. I can give you many more where we have failed in terms of delivering on time, on spec, on quality. So there is definitely an erosion of trust. I cannot -- if I was on your side, it would be the same, 100%, that there is an erosion of trust. That will take place if we -- once or twice, people don't worry about it. But if we are continuously doing the same thing where we are committing or setting up larger goals and not delivering, there is a challenge. So we have been -- I personally and also I think along with this, the Pakka team, we've been doing a lot of introspection around that. And we definitely need a stronger skill set. So like I said, I've stepped into the role of the CEO or the Managing Director for the interim. It is not my strength. I assure you for that. So I know that the -- my strength lies more in the side of collaboration in terms of conceptualization, expansion, but there has to be an exceptional executor. So of course, we have had strong executors. And wherever we have had that, we have felt the difference. So that is -- I totally agree with you. And ultimately, we can make all the excuses in the world for all the things that you pointed out. But the reality is our own acumen in the end. So what I can say from -- to a person who has trusted us is that we are on the job. There are delays, we agree. We probably don't understand the nuances when we make commitments. And my wife calls me an delusional optimist. So I think that plays through sometimes. So I'm learning with experience and age to temper my optimism, at least in commitments. So I don't think I'll be able to temper my optimism in spirit, but I'll work on tempering my optimism in the commitments I make. So that's something that I will personally take responsibility for. I do feel that we have an exceptional team, like it is mind-blowing. I'll encourage you to come and meet us in Ayodhya or in Noida, and you'll see the spirit of Pakka. And that is well and alive. We all believe in the cause we are after. What I can assure you is the delays will not affect the longer term plan. So that is what I can assure you, [ or ] we'll keep putting our best foot forward. There are -- like you said, there are issues that we faced with delivery containers. But at least we believe that what is going to come out is going to be game changing. So that's what we believe. And it's hopefully not my delusional optimism talking. So that's our belief. We do think that the team has made huge inroads into the flexibles side as well. That is also going to come out. Yes, again, our bandwidth is limited in terms of Guatemala. We conceptualized project from our spirit in order to ensure that we do a certain scale, but we were not able to raise the capital yet on time. So we've downgraded the size and also made sure that we do it a little faster. And that, again, is going to go through. Jagriti, again, there is a challenge in terms of -- Jeet pointed out, in terms of the coating substrate., Yes, we can take out the base paper, but that's not our play. Ultimately, as Pakka, we want to take out game-changing products. So we continue to work on those. I cannot even imagine how much it hurts you in terms of the market cap, and I truly apologize for the same. The onus is on us. You have believed in us. And if we cannot honor that believe (sic) [ belief ], then there is a challenge. So what I can assure you from my side is that we will continue to work in that direction. Please continue to trust us. We will work very, very hard on delivering on your trust and on the promise. And we will work on tempering our optimism a little bit, while still not tempering our mission. So that is my -- at least my promise to you.

Yes, yes. So I will continue to trust you. And I must admit that the recent leadership changes with you coming in, and also, with Shubham taking over the food services, I think it's a welcome change. I can definitely see something. At least the issues are coming up. So earlier, I think even -- these are all -- all these figure is fantastic progress in the [ interim ]. Hopefully, yes, the good days will be back soon and our patience will be [ over ].

Mr. Dinesh, you can go ahead with your question.

Hello. Are you able to hear me?

Yes, yes.

I wanted to know like bank funding, we have already tied up with Canara Bank, Indian Exim Bank and Axis Bank. And in the last call, you said that Exim Bank has disbursed the term loans completely. And there was some due diligence work which was going on with Canara Bank and India Exim Bank. So I wanted to know like what is the status as on today? Have they disbursed part of the amount or still some -- certain things are pending?

So disbursement to the amount -- to the ratios that permit against equity have already been disbursed. All due diligence is completed at Canara and Exim both. And the 75% of Carnelian, as soon as that amount gets -- either Carnelian puts in or we fund the equity side, the balance INR 150 crores debt would be [ disbursed ]. So it's a sanctioned limit, just disbursement not done because of the equity proportionately not coming in.

Okay. So good to know that. And one more thing is in grease proof paper, okay, last -- in the last con call, it was said that the -- because of the competition, like there are -- many competitors have suddenly sprung up, right? And so prices were also. -- So how far like we are impacted by that because now our EBITDA has also gone down, gross margins have gone down. So -- and what steps we are taking to elevate? Because this grease proof paper is one thing and then there was -- we were to launch some tea pouches, okay? And for that, we were to make some tie-ups and vendor and all. So what is the status of that because I think it has not happened yet, right? Plus, one more suggestion is like we are searching from some Innovation Head, right? And earlier, whoever was there, they were not able to do much on this front. So there are some companies like Praj Industries, which is a listed company, and they are pioneers in bioethanols and bioplastics. So why can't we approach them instead of appointing our own Innovation Head and they have made real good progress. We can tie up. I may be wrong, but Mr. Ved, you know more. So you can enlighten us on this. I mean, if a tie-up can be made with Praj Industries and something can be worked out. So that delivery containers, that leak proof which we want to launch, it has already delayed and now you have given a new time line of quarter 4. So that is all, yes. These are the things I want to know.

Thank you so much. So just to kind of explain to you the structure, grease proof paper is the base paper that we build on top of in terms of the -- whether it's the flexible packaging or barrier coating. So the base paper is needed anyway. So the way the system works right now is that you produce a base paper and then you line it up with different biopolymer formulations. And these are, of course, the things that we've been working on for a few years. And that is what -- the chemistry is what takes time. And of course, it's -- like everything else in life, it's -- it has its own challenges because you're trying to block off air and moisture with a natural substance, which typically any natural substance tends to be porous and bleeds. So that's the challenge. So it has to do with how you structure the product. So the grease proof paper needs to be made regardless. What we realize is that grease proof paper is anyways the lowest denominator for us. We can manufacture it. We can sell it. It is ultimately a specialized commodity. So that can be done. But in an ideal world from Pakka's mission point of view, what we are doing is we are replacing another grease proof paper by grease proof paper end of the day. So in an ideal world, we don't want to do that. We at least want to have a barrier-coated substrate. So that's what we are working towards. Tea bag, of course, is a great option because it also has a secondary packaging. So it helps the structure because inherently, paper is not [ puncture ] resistant, for example. So when you have it as a singular primary packaging, as in it is displayed outside or it's hanging in a Pan shop, you'll have a challenge. So those are the things that are in our mind as we are evolving and launching products. There is -- like I said before, before there is a decent pipeline, tea bags is definitely a huge part of that. And we will continue to work in those directions. Innovations is very much central DNA for Pakka. So as much as we like, that is what keeps us going. So there is definitely no outsourcing of innovation. But let me also clarify to all the investors here that nothing has stopped in Pakka. Whether there's an Innovation Head or not, every -- we work on 8 different areas, 8 different verticals or pillars of innovation. All those 8 pillars are well staffed and well moving in all directions. So 4, of course, you see in terms of products: flexibles; rigids; Wrap & Carry; and food services. Those are things that you see as investors because they are forward-facing. We also have 4 other innovations where we work on process, we work on waste valorization, we also work on ecology, and we work on green chemistry. So those are things that we do internally. So those have different teams in Pakka, different pillars. So those are ongoing. They are not stopping for -- because again, like I said before, we have an exceptional team, and it's a team of a lot of youngsters with lots of new ideas and deep involvement. So even now, there are a few of us here, whether it's Shubham, me, Satish. We are all deeply involved with that team. Juan Gabriel, who is our person who is leading the Flexibles now, and he's a Colombian who's decided to shift his family to Bangalore, India. So there are things like that, that we are blessed with at Pakka. Praj does amazing work, and we wish them all the very best. But these are very, very close to us. We do incubate a lot of people. We work on a lot of collaborations across the world. And I'm sure there will be an opportunity with Praj as well in the future, and we will remain open to that. But that said, innovation will be very much front and center for Pakka, and we will not be able to outsource that for sure.

And sir, about competition in grease proof paper, like how we are impacted and all?

No, we are not because we are not looking to make grease proof paper. Grease proof paper is a means to an end. It's not the end for us. Yes, we might sell some grease proof, but it's not the aim for us. Base paper will dilute what we are trying to do rather than enhance. So what -- the difference is that you want to create something called a functional paper, which basically -- typically has some end-use properties. Grease proof is again a functional paper, but a base functional paper. So for us, we may launch greaseproof for sure, but that's not the end goal. So we'll continue to functionalize the grease proof paper further by adding barriers to it.

And in your opinion, like what would be a difference between bioplastics, which Praj is [indiscernible] And what we are actually doing, because we are also into like something bio only, compostable. So what is the exact difference? Because then bioplastic is also --

I'm not fully aware of what Praj is doing. But on a fundamental level, if you look at biopolymers -- okay, let's -- sorry, I'll have to step back a little bit. So the base pillars for any material in nature is one of the 2. It's either protein -- amino acid, which is a protein or it's a carbohydrate or a sugar chain. So those are the 2 molecular chains that become the base for every product, including our skin, which is mostly collagens protein or sugarcane, which is more cellulose sugar. So those are the kind of structures that are available in nature. So different biopolymers have different blends and you have polyhydroxyalkanoates, or as Balrampur Chini has announced, polylactic acid. So those are all biopolymers that we humans are creating. There's a lot of companies that are coming into the seaweed domain. Those are alginates. Those are a little bit different. So I don't exactly know what Praj is focusing on. But fundamentally, in a cellulosic aspect, it's sugar chain that we work with. Then we add certain protein or amino acid-based structures for further kind of valorization -- valorization is not -- for further enhancement of the functionality. So, that's what we, as Pakka, tend to do, but I'm not fully aware of what Praj does.

_Hiren, you can go ahead with your question.

So my question to Ved sir is that, on the -- on Jagriti project, the funding part,. As -- we understand that this bank loans has been sanctioned in this -- around July, August 2025. While our equity is raising, I think it was 1 year earlier, 1 year back in July, August 2024, something like that. So just wanted to understand why it took so long time for this bank funding, whether is there any -- because finally also we onboarded PSU banks. And is there any acceptance issue among the lenders for the project or something like that, whatever there, -- any issues on the project acceptance? So I just wanted to understand on the -- this particular part.

Neetika, you want to go?

Yes. So when we started basically approaching the banks, we had a lot of interest coming [ into ] various banks actually. And we even received a couple of in principle letters, and I would not even say a couple, I think it was 7 to be an exact number. We wanted to go with a financial partner who would match our speed, our intent and be more supportive. So we wanted to do the right choice. That led to a lot of rounds of discussions and then the final discussions and the choices. So that definitely delayed the process, but I'm glad we made the right choice. Ved sir, anything that you would want to add?

No, I think similar. It was a huge due diligence kind of process from our side that took a little longer in order to understand which banks we want to go with in that scenario. But there was no resistance from the bank. In fact, many of the banks said that they'll take the entire exposure. They didn't even want other banks to come in, but we decided to go with the combination of 3, 2 PSUs and one1 private bank.

Okay. But for this particular funding part, so what I understand, there will not be any further equity dilution, at least below the last equity dilution, which happened at INR 272. So we are not planning to do any equity dilution below that recent equity dilution benchmark?

Are you happy if I buy some equity, Hiren?

That would be okay, but it should not be your last equity dilution. That would give investors more confidence. If you are putting the money --

Are you happy if I buy at a higher price?

Yes, obviously, because equity, any infusion by promoter obviously would give investors more confidence.

So that's the direction we are at least working on, to find ways to -- if there is an equity addition, it is done by me at a decently higher price than what is prevailing in the market.

Okay. And my second question is on the molded part because what I understand, in Jagriti, we are not going to add any capacity on the molded and we are targeting very high business revenue in next 2, 3 years through molded business. So that I understand, it would be obviously through outsourcing and -- that model only. But -- because we are seeing that even we are raising revenue, but profitability is issue. So whether because -- if we are not making in-house and we are targeting so much revenue, we are aiming for higher profitability to maintain or it would be [ heat ] on the profitability on the outsourcing part?

Shubham, you can add on. I might miss some things. But -- so great question. I'm glad you brought that up, Hiren, because I know that we've flip-flopped a little bit on the molded side. I know the investors have earlier asked us for a lot of clarity, and we've gone back and forth whether we'll produce ourselves or outsource the entire thing. What we realize is that we need both. We will have to keep producing ourselves, and we will have to go asset-light to be more nimble in the market and make sure that the customer gets what they want. So fundamentally, what we've done in our internal structure is divided into 2 SBUs. One is a manufacturing-focused SBU and one is the customer-facing or the food services SBU, which is led by Shubham. So say today, I'm leading the manufacturing SBU. My aim is to maximize my productivity and minimize the number of products I do to be able to provide the best cost advantage. So that's what the manufacturing business lead will typically do. So what we are trying to do is to make sure that we have the right technology in place. And of course, it depends a lot on funding, et cetera., But we have an existing setup that needs to be optimized, which we know for the last 6-odd years. So, we will continue in that direction, in optimizing -- to be very, very clear, the ultimate decision is that we will continue to run our internal facility and optimize it further. The second part, and this is where the Food Services division comes in, we realize it's a very customer-facing business, and we should not be treating ourselves as a bagasse molded fiber producer. Instead, we should be talking about ourselves as a food services disposables provider, which is in the sustainability space. So Subham is trying to build that in multiple ways, and I'm sure he'll add on to this. But the fundamental idea is that understand the need of the customer, provide them with better solutions, whether it's molded fiber or beyond., So there is a range that is being built for the customer with our Pakka ideas in mind. And Subham, you can maybe elaborate a little bit on that.

Yes, absolutely. So just 2 things there. And also, I think the choice of outsourcing versus in-house production is to be closer to the customer because one of the important cost components for us is the freight aspect of it. So definitely, you do take a hit on your profitability when you outsource versus if you were producing it in-house. But it does have its other advantages in terms of cost of capital, in terms of freight savings that we do. So it does give us operational advantages. It gives us a bit more flexibility. It allows us to diversify the product range. And it allows us to be closer to our customer. So that is actually the rationale of the way we are looking to proceed further. And in terms of offering, definitely. So the idea is to cover the needs of the customer. And by that is all his packaging needs for -- in the disposable category, because you want to basically have a higher -- increase your share of wallet and your share of business with the customer and to be able to provide them with all that they need. So you essentially want to be a one-stop shop solution for them, which is where our goal is.

Yes, just hope that equity dilution doesn't go below INR 200 because --- at least because who has invested at INR 272, they do not feel that [indiscernible]

Mr. [ Kaustav ], you can go ahead with your question.

Just wanted to understand a little bit more about your products in your flexible packaging project. So, could you speak -- firstly, is my understanding right that barrier coating comes into play if we are substituting non-metallic with metallic. So you try to get the [indiscernible] nonmetallic by putting barrier coating on metallic. Firstly, is that understanding right in case non-metallic doesn't work? And then the main question really is that for the flexible packaging products, which are not in R&D, which are certain to be commercialized, could you speak about that? Could you speak about the amount of revenues we can do as a company on those products and the total market opportunity and what that is replacing? So those are my questions.

Kaustav, deeply insightful question. So there's no other way for me to explain it by -- without going into a little more detail. So, let's start with what the metallization does. The metallization is fundamentally to stop the water vapor barrier. So if you think about water vapor, which is -- like if you think about steam, it will always find a torturous path. It will find its way through the structure. And what the metallization does, as soon as you have a metal, it kind of blocks that. So that's what the metallization does. Why do we use metallization from Pakka perspective is because it still compose -- it still demineralizes. When you put it in the soil, it will again break down its fine particles of aluminum. So, what we do is that we put an aluminum layer to avoid that water vapor transmission to happen. What the customer doesn't see is 2 things. One is when -- the only way to metalize on paper, proven way, is to transfer metalized. So typically, what happens is because it's a 2-nanometer layer of metal that you have to add on to a paper, the only way you do it is you actually bring it in a polyethylene film and you transfer metalized it on to the paper. So you still have a lot of polyethylene happening in the process. From Pakka perspective, that's a challenge because, again, we are not looking to greenwash in any way. Process is also as important for us as the final product. But that obviously puts us in a quandary because then you have a challenge because you have to control the water vapor without having a metal substrate. The second challenge, of course, the customer doesn't see is that when you do a transfer metallization, it's typically done at much lower capacities, which again is a problem if you are to supply a larger consumer, again, add in cost, et cetera, et cetera. So, the only way we feel that we can actually make it successful in terms of scale and -- at least from a scale perspective, is to go for what we would call is dispersion coating. And there's different kinds of coating. You might know extrusion coating, which is when you melt a poly and you put it on something. So we tend to go with dispersion, which is a water-based coating, which is, of course, again, more -- structurally more soluble in nature, fundamentally because it's water-based. So we have to go for water-based structures, which create their own challenges. The way we try and solve it is to go at a very nano level. When you go at a very nano level, you fill the sheet a little more. And that's the direction, and of course, that's the whole challenge that Pakka has in order to be able to build those structures. But again, just to give you a gist of the question, the holy grail for us is non-metallized and not metallized. So that's the holy grail. Now to your second question, but we have to sell and we have to make money, right? So because ultimately, sustainability -- first test of sustainability is to sustain ourselves. If we don't sustain ourselves, there's not much sustainability that we'll bring to others. So, in terms -- in order to be able to do that, what we tend to do is to -- what we are trying to do is to commercialize metallized in a significant scale through outsourcing. That we are continuing to build the order book now. I cannot yet give you a number. But again, just to ensure that I do answer your question, there are many applications which we would call barrier-coated. So again, from a consumer standpoint, you open a sugar sachet probably every day. You probably open a bag-in-box application like a masala thing, which -- MDH or Goldiee, they'll come in a box, but inside it would be a paper with a metallized kind of layer. You will have different applications. We talked about tea bag, which is again inside a box, so it becomes a little bit easier in terms of protection. So, these are the applications which we are relatively confident about that if nothing else, we will crack those. So those are just a cost issue, and cost issue, we can address because you are bringing in something which was vertically integrated, which means that you were sending paper to another converter, who is buying other stuff from other places and integrating it. In our case, we are bringing it in-house and sending it to the converter only for printing and pouching. So, we will mitigate the cost increase from a petroleum polymer to a biopolymer through that methodology. I'm not able to give you a number yet and maybe Neetika won't be happy if I did because my optimism comes into those domains. So, I'll avoid that, but that's the broad trajectory we are on. I hope it helps you in raising your understanding of what we are doing.

Definitely. Ved, just -- this is probably a conversation off this chat, but I'm also involved in -- with some global producers of flexible packaging, and I also sell some product to key manufacturers in India. So I think I can help you with talking to some people, as you said, because we are doing some very high-level R&D. Now how do I get in touch with you, you tell me because right now I'm just -- how do I get in touch with -- yes, so how do I get in touch with you?

Just send me -- ping me on LinkedIn, I'll send you my number, and we -- and that would be great.

Okay. You'd remember my name?

Any -- yes, absolutely. 2

Okay. Yes, because --

And yes, because that will be -- Kaustav, that will be a huge blessing for us because the more people we speak to, we find we emerge much more knowledgeable. And it may not be even from a technical angle, but just from a connection angle. I'll give you an example. We were doing a conversion of tea bags, and this will help others, and that's why I'm mentioning it now, is that for the tea pouches, we actually succeeded in the entire conversion because, again, like what we have to realize is that when a converter shifts from a petroleum polymer to a cellulosic structure, there is a difference in their machine in terms of the tensions, in terms of the speed, et cetera, et cetera, which needs its own kind of trajectory, and they don't want to change that because their operators are used to a certain methodology. Actually, where we failed was different. We failed on the heat -sealing aspect because petroleum polymer was heat sealing at 120 degrees. Our structure was heat sealing at 150 degrees. Now that's a 20% increase in energy for them. So that's the kind of challenge, Kaustav, that we learn when we are able to connect with people who have been in the business for a while. So yes, do ping me and I'm happy to connect with you.

Yes, yes, we'll do it.

[ Swatantrata ], you can go ahead with your question. [ Swatantrata ], are you there? Okay. I'll move on to the next question. Manali, you can go ahead with your question.

So my questions are actually around -- I want to understand more about delivery containers. I mean, while we are looking at a launch, say, next quarter, but what kind of volumes are we looking at? Or how are we going to go ahead and manufacture them? Or also with the entire range that you are speaking about in the Delivery segment. So I would -- if you could enlighten us more about what's going on, like now I saw in your presentation about clamshell where you all have launched it and you all have been able to move to a INR 20 lakh business. But again, having to grow with a beautiful number, how is that going to happen? So likewise, if you could speak on the entire delivery range and where are we on the delivery containers, like when we are saying that we are going to launch it next quarter -- I mean, sorry, in quarter 4. So where are we yet? And what all things do we have to do in addition so that this entire plan comes into place?

Yes. Thank you for the question, Manali. Should I take this one?

Sorry, Subham, can I just start and then you can take over?

Yes, of course.

[indiscernible] my background for Manali because it tends to not be able to do what I'm going to do, and you may not be happy with this. So Manali, this is the final delivery container in my hand. Right?

Okay.

And there is a certain method to the madness where we have created a whole structure. All it takes is this much time to get stuck. The delivery container is ready for delivery, right? These are the trials we've been doing with the customer. As you might see, it's a little shiny. I don't know if you can see it.

Yes, yes.

This is a biopolymer coating that has been done. So there is a certain structure. So the team has just applied for a patent. So that's the first step. We don't want to launch this without that because anyways, you'll see huge amounts of copies of [ CHUK ] in the market now, and we've kind of realized that we have to be a little more careful. But it's in my hand because we've been playing with it today. But of course, this has been in the making for a while, but this -- also to do with the amount of thought that has come -- gone into. If you take a plastic container, you'll tend to go like that to close it, then there is an opening challenge, there's a taping challenge. Here, you don't need any of that. This is the final structure, completely leak-proof. But that said, so there is a lot that goes in after that. For example, the gluing itself has taken the team a long time because it has to be a food-grade glue. It has to have the right [indiscernible] strength that doesn't tear away the fiber, but yet opens up and doesn't leak. So, there's a very big balance that has to be created in terms of the width of the glue, the type of the glue, et cetera, et cetera. Right now, all the glue is being imported from U.S. So, there's a lot of variables that go into creating a product like the ones that our team tries to create. That said, there is a curve even after that, which I'm sure Shubham will elaborate on, but it means the right machinery, the right system, et cetera, et cetera. So today, the delivery container market in India is about INR 4,000 crores is what we see it as, and we definitely aim to take a significant chunk of that. Over to you, Shubham.

Yes. So maybe just to complete on that. What we have been doing is also extensive customer trials, because when we launch the product in the market, we want to be sure that it works. It performs in different, different situations. As we mentioned on the flexibles, it's only when you actually do trials with customers, you realize that they may have real-life operational constraints and they have challenges in their kitchen, which they need to solve. So generally, when we are innovating, we tend to focus on the input. We want to get a bagasse leak-proof container, but then there are also challenges to do with real-time use of that container, how fast it gets packed, how fast does it take to shut, how long can it hold the food, does it get soggy, does it get damaged, can it hold weight if you stack it up, how much inventory do you want to make, can you limit the inventory. So we try to use common lids for different sizes, that way the customers need to maintain lesser inventory and lower number of SKUs. So the process takes always longer because you are actually truly innovating, something like this does not exist in the market. And when you do that kind of innovation, you tend to sometimes get surprised because everything is not as per what you thought or what you plan. So, that's -- but in terms of timeline, where we stand today is we've successfully completed a significant number of customer trials across the country in different locations, different cuisines, different customers, to really understand whether this product is working for them. And we've had broadly very, very positive feedback. And therefore, we are confident that we can now begin the procurement process for the equipment that is needed to produce these containers.

Okay. And, so, I also want to understand -- I mean, like, you said that there are many things going on. So where are we on the cost front, which is one of your main aspects where there have been struggles? So I just want to understand the cost front over here?. And again, now like -- so what I'm understanding is now we're looking at producing this entire range by ourselves rather than outsourcing. So just correct me over there?.

We haven't taken a call. I mean, we have the option of doing both. We probably would do a mix of it because, again, we have a range of delivery products. For some, it may sense to -- it may make sense to do them in-house. We'll definitely have capabilities in-house because we want to always have the best-in-class technology and a center of excellence in our plant, right? So that will definitely be a part of the goal. But we have the choice to go in either direction. In terms of cost, that's exactly, I think, where we are working right now. So as we mentioned, currently, the glue we are using is from the U.S. The -- and it's not just the glue, right, then you have to find the right technology to manufacture these containers. So for example, to apply the glue on the frame of the container, right, to that perfection and fast. So we are now currently exploring what is the best available technology, which will significantly have an impact on the cost, right? So we're looking at how we can optimize that. Naturally, it will be in a comparable pricing to what bagasse products cost. But I mean, our hope or our understanding is that we are adding significant value in terms of operational efficiency for our customers because, like we mentioned the ease of using or packing food in this product will be much better. For example, you would completely eliminate the taping process, right? So today when you order food and if it's a liquid or a curry or a gravy kind of a food, even plastic containers are taped, right? So we are seeing a significant reduction in the packing time when you use our solution, which gives them operational efficiency. So we hope that the overall cost component, right, so not just of the product, but if you take product plus process, it becomes a lot more comparable.

Okay. So you all have done tie-ups with -- not tie-ups, but you all have worked with Zomato earlier also where this entire range was actually going to come in. So, is Zomato still involved with all of this? Like, are you guys in constant -- like, how is this product being developed with Zomato also coming into [indiscernible], because a product like -- a platform like Zomato is like where the maximum of your customers are there. So how is that going on?

We wish and hope to get Zomato more involved. But currently, we -- we've had conversations with them in the past. But the way we would work is -- see, the restaurants, of course, make their choices independently of the packaging they would like to use. What Zomato, the role they can play and we really hope that they do, is to incentivize restaurants, right, or to give them better organic visibility, which they already do, right? If you go on Zomato, you'll see certain restaurants have a tag of lower plastic, or I forget what the exact tag is, but it's lesser plastic packaging tag. So what we are -- our hope is that Zomato gives organic visibility or a separate tag or a category where it would kind of highlight restaurants that are using compostable packaging. The other advantage we see is now Zomato has allowed recently restaurants to start adding packing charges, right? So anyways, restaurants are billing that cost in addition to what the food cost is. So we hope that also takes price a bit out of the conversation because restaurants have the ability to then pay this premium, right, whatever it would be.

Priyanka, you can go ahead with your question.

Thank you for the explanation to the previous question. Actually, my question is more or less on the line of what Manali was asking. So, it seems that we are still trying to crack the perfect product. I mean, I do understand that delivery containers with a leak-proof sealant, with a food-grade glue is something that you aspire to do. But I'm still -- I'm kind of still thinking that, let's say, if it's an 80% compostable product, only with the bottom part of the container being compostable, with a plastic lid, with a taped lid,. I mean, with a proper declaration that this is only 80% compostable, wouldn't it still work? It takes your cost down. I know it's not the perfect product. But by the time you can get your costs down with the perfect product, this semi-perfect product is already in the market. The ASRs could be lower, and it could still be taken on by a lot of people. I mean, currently, even to get Zomato and with the research -- price-based research that we were doing in the market, we find that there is a certain premium that the Zomatos and Swiggys of the world are ready to pay for sustainability, and that is only 20%. They are saying that they don't want to go more than that, 20% to 25%. So, my confusion stems from the fact, why are we not trying to sell what we have with the limitations declared on the product and going ahead with it? And you know -- we already all have a lot of confidence in your research capabilities. As and when we will innovate and we will do more trials once the product is perfect, we can keep on adding more and more product in the market. And once the acceptability is there, the brands know of what the product of Pakka is capable of, they would then be able to pay a higher product. That's similar thing I wanted to understand from the base paper and barrier-coated paper perspective also. We don't really need to go and sell the perfect metallized or non-metallized flexible packaging product. We can -- as Ved mentioned that you would start with the base paper, but then that is not the goal. I understand. But can we start at least thinking on the lines that even if that is not the perfect paper, that is not the most high-margin product, but at least roll it out, because at this point of time, the numbers need to improve. I mean today, the stock is at INR 120. We need to do something about it right now as we speak. So my suggestion and my request is that please roll out your products. We still have a lot of faith in the brand that Pakka is, but we need to seed the market even if it is 70% compostable and rest we are using products which are probably not compostable., Initially, it could be an interim kind of model, and we can keep innovating and seeding the market with those perfect products.

Priyanka, I appreciate your point of view. There are a few things Pakka is [indiscernible] about, and it's important that the investors know that. We will not produce anything that is not home compostable. And I have deep apologies for that, but I cannot tell that to the cow that will eat those products. And we'll not be able to tell that to the fishes that eat that product. And I understand it's utopian. But ultimately, our business is in service of that higher goal. That said, like I said before, the first test of sustainability is to sustain ourselves. So we do understand that. But what we -- what I also realize is as soon as you lower the bar, the bar gets lower for a long, long time. That is what we have seen. What happens is that you start earning money, and that's a huge challenge, because then you don't want to phase out that product. Typically, what the team will come and say is that let's keep this, let's add one more. And there'll be a lot of arguments on that because they'll say that customer will leave us, this customer will leave us. So it's a huge call that we have taken. There are 4 Pakka promises. It will be home compostable. And why home compostable? Basically because we are not in control of where it's thrown. And if it's thrown anywhere where there is not enough heat or not enough moisture, it will still become dust end of the day. It will be, for now, recyclable in the paper stream, any product that we make because there is an economic value attached for the ragpicker. They will pick it up because they will get money. So, the idea is that 80% will at least get downcycled. With that in mind, what will also happen is that ultimately, see, the difference between a petroleum polymer downcycling versus a paper or a cellulosic downcycling is that there is an out. There is -- it's a complete misnomer when we say petroleum or plastic recycling. There is no recycling. There is downcycling and there is no out. Ultimately, it will become a polyester shirt that will lie somewhere catching fire. That's the reality of humanity. The third and fourth promises for Pakka are marine safe and terrestrial safe. We don't need to check toxicity. But as humans, I think it's extremely important that we do. I don't think, as humans, we have the right to harm other fellow species, even if it makes a lot of business sense, because how will you explain it to that animal whose life is going because of certain products that you consume. So sadly, Pakka is totally attached to that idea from an investment perspective. But that said, you're totally right. We do not miss progress for perfection. I assure you of that. So we are very clear about that. Even the product -- so Shubham was talking about the product launch. [indiscernible] we are launching it without lamination, we know that it's not perfect. But we know that if we go for lamination, we are talking another 3 months. So yes, we will do that, but both the laminate structure and the non-laminate structure will be home compostable. So that's something that we will stick with. We know that there are certain products that we will not be able to package in the nonlaminated structure. We know that some of it may become a little soggy, but that's a call we are able to take. As you are saying, it is not perfect, but we will launch it. Similarly, on the flexibles side, we launched various products where we know it's not perfect. But we -- those 4 values are deeply embedded in us. We don't want to compromise on it because the bigger challenges that we start compromising on is our level of innovation will go down, our total attachment to this idea that we are there to [ lead ] the planet cleaner will go down. We will start finding substitution. We will start putting the ideas around the sales ahead of what we really want to do. So I assure you, you've trusted us for a while, continue to trust us. You will see products come out. You are long-term investors, and I assure you that this will be a blip. It will not be a longer -term issue for you. So apologies that we are not able to do petroleum-based. It hits us in the gut when we think about us selling plastic. So -- and of course, we don't control that. That said, a lot of players do take our product and add a plastic lid or something else. And we are not in control of that and nor are we going to say no to them. That's their choice. But as Pakka, if you -- I don't think we are even capable of selling plastic. That will be tough for us. It was a tough call that we took. Some of our products were getting damaged in the -- while they were being on the shelf in the food service category, and we got a lot of complaints. And we did shift to a petroleum polymer for a short time. But like even now, we shifted for like, okay, let's find a substitute in the next 3 months and shift back, but we haven't for 6 months. So that's the challenge that happens. You get into comfort zone, and we cannot allow ourselves that, I apologize.

Sure. We'll wait for the products to get rolled out.

Thank you. We'll take probably the last question, time check. So Nitin, you can go ahead with your question.

Am I audible? Hello?

Yes, you are audible.

And I was hoping to get a sense of what your sales run up for your Mold division is, either on a quarterly basis or a yearly basis, for the CHUK division?

[indiscernible] understand. But Shubham, do you want to take a shot at that?

So you wanted to know what the past sales buildup has been?

I mean what the quarterly -- I was hoping to get like a breakup of your divisions, sales -- I mean, division-wise sales. And you do have a Mold division, right? And how much would that be contributing to your -- how much has that contributed to the quarterly sales? And how has that ramped up over the last maybe 3, maybe 4 quarters as opposed to pulp sales?

Got it. So I think it's -- Neetika, maybe this is more for you. It's the revenue split of the group between the divisions. So basically [indiscernible] wanted...

I think that is the -- Yes, these segmental results have been declared. It's approximately 15% where we stand as of now. I think going forward would be a forward-looking commitment, which we will not be able to give.

Okay. Got it. And one more thing. I mean, we have tied up a lot of -- we have secured a lot of bank funds for the Jagriti product -- for the Jagriti project. And I think we have availed and-- we have got sanctioned of something like INR [ 450 ] crores. So as and when the [indiscernible] gets commissioned, so what's the cost of capital? And the second point is what would be the repayment cycle be? Are we getting some level of moratorium from their end as things stand now? And when do you expect the project to actually breakeven? Because ultimately this is going to be INR 750 crores project based on the revised estimates. And when do you actually see -- when do you actually -- what sort of capacity utilization are we looking at in the initial maybe 2, maybe 3 years?

Okay. I'll start with the first one. In terms of the loan sanctions that we have already received, the average cost of capital as of now is about 9.5%. We are in talks and discussions with the bank. One of them has actually reduced it to 9%. So we are looking to have the others follow suit as well. In terms of the repayment schedule, for now, the planned date for -- the commissioning date was April '26, and hence, the repayment started July '26. The extension that we have already announced, the dates would be shifted accordingly. And in terms of the breakeven, for now, the projections that we have done for our internal calculation, we've taken the first year at 60% capacity utilization, and we hope that this will be achieved. And in terms of staggering, we plan to achieve 90% by the time we hit year 3. That's all theoretical.

Okay. Got it. And just -- if I could just squeeze in one more question. So what is -- so what is our maturity profile like? Because I think this year, our current -- long-term repayment liability is something like 12%. So FY '26, '27 or '28, how much -- what are we looking at in terms of repayments of long-term debt?

So that will depend on -- that will basically depend on the sanctions that we get from the banks. I think I'll update you by the next quarter because we are still discussing with them in terms of the extension of the commercial date of operation. So give me another 2 months, and I'll update you on that.

Pranay, just before you close, I think one thing that I think is mentioned somewhere in our -- in the communication that we made, but I think it's very important for me to reiterate that, -- is that we are part of the U.P. government's industrial promotion scheme, and there is a INR 240 crore subsidy that also will come -- it just reminded me, Nitin, when you were talking -- that, that will also come into play because that has also been sanctioned. It is just waiting for cabinet approval, which is more of a rubber stamp, but that will get done in December 2. And the company will be receiving INR 240 crore subsidy from the U.P. government as well, which will further enhance the project as we go along.

Thank you. Ved, just one more question, which was there on chat for a very long time from Ravi. He wants to know what is the NSR of the barrier-coated versus NM?

So I guess it's a difference between NM -- non-metallized and the barrier- coated. There are so many applications and so many products, but let me take the ones that we take as anchor products. So everything that we measure usually is a per square meter basis because the yield is what the buyer actually gets. So the target for us is a little over INR 20 a square meter when we do our NM application. I'll compare it to an application which exists today. So apple-to-apple, if you look at, say, a chocolate application, the petroleum polymer structure is between INR 16 and INR 18. So it's about a 10% to 15% differential in terms of the product. And we are hoping that, that either will get more optimized or accepted, either way. So that's the -- more or less the structure that we are at. When you look at a barrier-coated application like a sugar sachet, I actually don't remember the exact numbers, what it actually costs, but again, it's a wide variety. But I would say that it will be about half. So per square meter, it will be about INR 10 a square meter, and we'll have to see where we land in terms of the meterage because again, the -- if you see the structure, the grammage goes down. It's much thinner. So you get a much more yardage. So the yardage increases and hence -- but there, we are working to match the price apple-to-apple because that's the only -- it's more of a commoditized segment. So the brand value proposition for the customer is lower. So we want to make sure that we meet more or less the cost of the structure to be able to sell at scale. So, that's the broad idea. But as we move along, we'll continue to learn and update you.

Thank you. Thank you, Ved, for answering all the questions. And thank you, everyone, for attending this call. Any closing notes, Ved, from your side?

No, just I know it is totally understandable from an investor perspective, the kind of nervousness that you might feel, or you might even feel a dissatisfaction with the organization because of the market cap and the share price. What I can assure you from our side and the team side is that everything is on track. We are slowly gaining momentum in different structures, different systems, different projects, et cetera, et cetera. You have been very supportive of the organization. Many of you have been with us for years, and we continue to seek your support. And I can assure you from our side that we will leave no stone unturned in our mission towards a cleaner planet. So thank you all so much.

Thank you.