Pyramid Technoplast Limited (PYRAMID.NS) Earnings Call Transcript & Summary

Hello, everyone, and a very good afternoon. I welcome you all to Pyramid Technoplast Limited's Q2 and H1 FY '26 Con Call. Please note that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risk the company faces. We have on the call today, Mr. Bijaykumar Agarwal, the Managing Director; and Mr. Jaiprakash Agarwal, CFO and Whole Time Director. So now I would like to hand over the call to Jai sir, to proceed with the opening remarks. Post that, we'll open the floor for Q&A. Thank you, and over to you, sir.

A very good afternoon, everyone. Thanks for joining. So it's a pleasure to be here today with you again, and to walk you through our Q2 and H1 FY '26 shaped up for Pyramid Technoplast. So this quarter has been significant, not just in terms of performance, but also in steady progress we have made towards building a scalable and future-ready business. From establishing a strong base in Gujarat, to getting a new plant in Maharashtra, we have expanded capacity across all drum categories, marking the next chapter to our growth journey. Our key milestone this quarter was the ramp-up of our Wada plant. The facility has commissioned in June, and we saw a strong operational momentum in Q2. With this, major CapEx cycle is largely complete and now focus shift to capacity utilization. At Wada, IBC and HDPE lines are fully operational. And MS drum expansion is on track to get complete by December this year. So apart from this, we see CapEx of another INR 10 crores to INR 20 crores coming in FY '27. Our major spend lie in backward integration, like what we are manufacturing in-house -- like tabs, et cetera, which I think most of you are aware by now. Our fleet now happens to be 95. So we have strengthened our logistics backbone, enabling reliable on-time deliveries and strong customer relationship. Talking about the capacity as of Q2 FY '25, production capacity stood at 62,050 metric ton per annum, which has now risen to by 22% to 75,754 metric tons per annum, reflecting sustained growth momentum. Capacity utilization for the quarter stood at 66% -- it was around 66% the capacity utilization, slightly lower due to initial phase of operations at Wada plant. Coming to key business updates. We commissioned our plastic recycling plant on October 3rd, and our solar plant in October 30. While the benefits of these will soon reflect in our numbers, here is a quick snapshot of both. We have set up a new recycling unit at the area is around 4,400 square meters of land in Bharuch, with an investment of around INR 10 crores. The 5,000 metric ton annual capacity will meet our 10% to 12% of raw material requirement, cutting costs, reducing import dependency, and strengthening supply chain resilience, all with a quick 2 to 3 years payback period. In addition to our 6 mega plants -- solar setup in Gujarat, marks the first phase of 15 megawatts project across Gujarat and Maharashtra. Whilst only online in 3 to 4 weeks, it's [ slashing ] our power costs significantly. INR 60 crore with 4 year payback, it's a solid step towards cost efficiency and sustainability Let me give you a quick check on the segmental performance now for quarter 2. So MS drum volumes up by 14% year-on-year, revenue up by 7% year-on-year, with 90% of process automated. HDPE drum segment, volume up 16% year-on-year, revenue up by 11% year-on-year basis, aided by ramp-up across lines. IBC massive volume growth of 42%, and 30% revenue growth year-on-year. Coming on to financial highlights. The revenue stood at INR 161 crores, up by 21% year-on-year for the quarter, and 22% half year to INR 325 crores, driven by robust volume growth across all categories. Gross profit at INR 43 crores, up by 28% year-on-year, led by strong volumes, while H1 stood at INR 87 crores, which is up by 28% again. The recycling plant is expected to reduce raw material cost by 10% to 12% annually, further boosting our margins. EBITDA up by 21% year-on-year to INR 12.6 crores. PAT up by 8% year-on-year to INR 6.2 crores, with margins stable at 8% and 4%, respectively, due to higher fixed cost during the ramp-up phase. The 6-megawatt solar power commissioned in October will start delivering cost benefits soon, with full capacity to get expected to complete by end of this month. In summary, with the expansion phase nearing completion, coupled with sustainability initiatives and higher utilization in established phase, we see a lot of operational efficiencies in our business going forward. Pyramid is well positioned to drive consistent growth and enhance profitability and create long-term value to all stakeholders. We are excited about the road ahead and now open to take your questions. Thanks.

[Operator instructions] Over to first question we have from [ Deepesh Sancheti ].

Firstly, what is the reason of -- the performance, it was because of mainly the fixed cost, or there was something else also? Because we had a good revenue growth, but the profit growth was not as expected.

[Foreign Language]

Once the capacity utilization will start there, so it will definitely come down because [Foreign Language]. By next quarter.

[Foreign Language]

Capacity utilization, H2 [Foreign Language].

80% [Foreign Language].

83%?

80%. [Foreign Language]

[Foreign Language] 15% to 20% revenue growth [Foreign Language]. 11% to 12% EBITDA margin [Foreign Language] in FY '26-'27, [Foreign Language]?

[Foreign Language].

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[Foreign Language]. Can we expect marginal improvement also in Q3 and Q4?

[Foreign Language].

Your recycling plant [Foreign Language].

[Foreign Language].

So we are already in discussion with our customers. So we are prepared from our side. So it is just matter of some government certification, and then we can start collecting rates from the market.

When we can expect this?

This, it can happen any -- it can happen tomorrow also or it can happen after 2 weeks also.

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[Foreign Language]. What is your expectation of ROE of the company?

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By this month end we should get them. Because we have already started with 6 megawatt. So balance month end [Foreign Language].

So how much the power cost will we save going forward.

[Foreign Language].

In 3 years you should get back all the investments, right.

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Next up we have [ MD Mortuza ].

I had a few questions, very ones. I had a question regarding the solar commission we just had on 30th October. So we had -- like we had quantified that we will have approximately INR 15 crores of savings. So if possible, can you quantify it for how much of the savings will we have in quarter 3?

[Foreign Language].

INR 3 crore, INR 3.5 crore [Foreign Language] it can go up also.

Sure. Another question I had, like the guidance we had earlier given on the margins. So have we already modeled in these savings of solar costs?

I didn't get your question. Can you please repeat it again?

Yes. We had received the guidance about the margins of about 12%. So have we already modeled in the savings of the solar.

[Foreign Language].

We have said, we are on track with that. So we have just completed all the expansion, what we have done -- like recycling has just been commissioned. Solar has just been commissioned. So I suggest wait for 1 quarter, let's see. You will get the result, you will get your opinion yourself.

One final question, like the remaining 9 megawatt of capacity will be commissioned in this -- end of this month. So are there any incremental cost advantages, like more than INR 15 crores, or is it including both of the plants?

Including all.

Next question we have from Pratik Dedhia.

[Foreign Language].

[Foreign Language].

[Foreign Language] to gain volume market share?

[Foreign Language].

[Operator instructions] Next question we have form [ Maitri Shah ].

[Foreign Language], EBITDA margin that are 11% to 12%. Next year, what sort of guidance do we have for FY '27, because Wada utilization [Foreign Language] and also we'll have the full year effect for the solar and recycling. So what sort of margins also are we guiding for?

[Foreign Language].

[Foreign Language] what sort of guidance are we giving on EBITDA and revenue for next year.

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Revenue, 20% growth can we expect next year?

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Next question we have from Saket Kapoor.

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[Foreign Language]. [Audio gap]

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[Foreign Language], we will be closer to that?

Nearby.