Pyramid Technoplast Limited (PYRAMID) Earnings Call Transcript & Summary

Hi, everyone, and a very good afternoon. I welcome you all to Pyramid Technoplast Limited Q3 and 9 Months FY '26 Concall. Please note that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks pertaining to the business. We have on call today, Mr. Bijaykumar Agarwal, the Managing Director; and Mr. Jaiprakash Agarwal, CFO and Whole-Time Director. 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.

Good evening, everybody. Myself, Jaiprakash Agarwal. It is a pleasure to walk you through Pyramid's performance for Q3 and 9 months FY '26, [indiscernible] that was important not only from a financial standpoint, but also in terms of strategic progress we made towards building a scalable and future-ready business. Over the last few quarters, we have successfully strengthened our manufacturing footprint starting from our established base in Gujarat to commissioning new capacities in Maharashtra. During this phase, we expanded capacity across all drum categories, marking a decisive step in the next leg of our growth journey. A key milestone during the quarter was the ramp-up of the Wada plant. The facility commissioned in June, and we witnessed steady operational momentum beginning Q2 FY '26. With this, our major CapEx cycle is largely complete and our focus now clearly shift towards capacity utilization and operational leverage. At Wada, the IBC and HDPE lines are fully operational with the MS line has been commissioned with the remaining expansion on track for completion by December. Beyond this, we expect only maintenance and balance CapEx of around INR 10 crores to INR 20 crores for FY '27. Our strength continue to [ fly ] in backward integration with all major backward products we have been manufacturing in-house, which gives us better cost control and supply reliability. We also strengthened our logistic backbone with our in-house fleet now expanding to 100-plus, enabling timely deliveries and deeper customer relations. On the capacity front, as of Q3 FY '26, our installed production capacity increased from 62,887 metric tons per annum to 75,856 metric tons per annum, reflecting the successful execution for our expansion plans. Capacity utilization during the quarter stood at 67%, and we expect this to steadily improve to 75% for the next financial year, driven by volume ramp-up across all the categories. Turning to key operational initiatives, we commissioned 2 important projects during this quarter, our recycling plant on October 3 and the solar power plant on October 30. The recycling plant set up on 4,400 square meters of plot in Bharuch with an investment of around INR 10 crores has an annual capacity of 5,000 metric tons per annum. This will meet approximately 10% to 12% of our raw material requirements, reduce import dependence, enhance supply chain resilience and deliver a payback within 2 to 3 years. In parallel, our 6-megawatt solar power plant in Gujarat marks the first phase of 14.25 megawatt captive solar project across Gujarat and Maharashtra. On 2, February, an additional 5 megawatt was commissioned in Bharuch and 2.25 megawatt in Maharashtra with the balance 1 megawatt to be added in the next phase. Once fully operational, over the next 3, 4 weeks, the project is expected to reduce power cost by approximately INR 15 crores annually with a total investment of INR 60 crores and a payback period of 4 years. This initiative is a strong step towards long-term cost efficiency and sustainability. Let me now brief you upon the segmental performance for Q3 FY '26. MS drum volume has increased by 1% year-on-year, while revenue has declined by 2%. HDPE drums volume grew 16% year-on-year with revenue up 10% year-on-year, supported by capacity ramp-up. IBC delivered strong performance with 37% volume growth and 27% growth year-on-year basis. Revenue stood at INR 162 crores up by 5% year-on-year for the quarter, while 9 months revenue increased by 16% to INR 486 crores, driven by volume growth across categories. Gross profit rose 22% year-on-year to INR 44 crores in Q3 and 26% to INR 130 crores for 9 months. The recycling plant is expected to further reduce our raw material cost requirement by 10% annually, supporting margin expansion going forward. EBITDA declined by 2% to INR 12 crores and PAT declined by 29% year-on-year basis to INR 4.8 crores with the margins at 7.4% and 3%, respectively, due to higher fixed cost during the capacity ramp-up phase. The benefits from the solar power plant commissioned in late October are expected to begin reflecting in the coming quarters with full impact leading to annual power cost saving of around INR 15 crores. In summary, with the expansion phase nearing completion, sustainability initiatives firmly in place and utilization level set to improve, we expect meaningful operational efficiencies to emerge over the coming quarters. Pyramid is well positioned to drive consistent growth, improved profitability, long-term value creation with all stakeholders. We are confident about the road ahead and excited about the next phase of our journey. We now open the floor for questions. Thank you.

[Operator Instructions]. First question is from Deepesh Sancheti.

[Foreign Language].

[Foreign Language].

[Foreign Language].

That is there, 65% to 70% always.

Is that optimum or we can go ahead also?

We can go ahead, if we go full strength, but then we expect that 70% is optimal for this. Because we get certain rejection, there are some downtime come, so 70% optimal for us.

[Foreign Language].

[Foreign Language].

This quarter is good. Prices are going up.

[Foreign Language].

[Foreign Language].

[Foreign Language].

Jai, if you can give me volume growth of each and every product, quarter=on-quarter and year-on-year? Is that possible for you?

If it's okay, we share it with you later on?

You can ask Soumya to give me the details.

Definitely.

Next question is from Pratik Dedhia.

[Foreign Language].

[Foreign Language].

Next question is from Ganesh Nagarsekar.

[Foreign Language]

[Foreign Language].

[Operator Instructions]. Next question is from Naman Modi.

[Foreign Language]

[Foreign Language].

MS drums are directly related to steel, [Foreign Language]?

[Foreign Language].

[Operator Instructions] Sorry, sir, may I know your name?

Divyesh Vora. Can you tell us the outstanding position of your term loans and your working capital? Because what is happening is, I will tell you very honestly, last quarter and previous quarter also, we had anticipated that our margins will improve, but every quarter, what is happening, some reason comes up and our margins are again at the same level. This time it is Diwali bonus and the interest cost. Now, can you just anticipate the future quarters and tell us where your margins will be at 12%, which you had targeted for yourself? Without any excuse, can you achieve that target?

[Foreign Language].

Why I'm asking you is because at that time again, the interest cost will also be there.

[Foreign Language].

I'm just very keen to know that when accuracy of that 11% to 12% will come, and what you are committing?

[Foreign Language].

The first question was I asked, what is your outstanding in your working capital and term loan at this stage, maybe in December or maybe as on January also?

[Foreign Language].

Would you able to pre-pay something, with your profits and everything?

We have been doing this pre-payment.

[Foreign Language].

[Foreign Language]

[Foreign Language].

Next question is from Pratik Dedhia.

[Foreign Language]

[Foreign Language].

Next question is from Saket Kapoor.

[Foreign Language]

[Foreign Language].

Financial year 2027, we don't have much CapEx. [Foreign Language]. We want to say that Wada plant is also profitable now, because ramped up all the capacities there, so these numbers will definitely reflect in the next quarter.

[Foreign Language]

[Foreign Language].

[Foreign Language]. We will not leave anything behind. If IBC growth is coming up, definitely we will grab that first, and then MS drum also, we have the capacity. We have started MS drum plant in Wada. [Foreign Language]. Now we will start supplying from Wada, so definitely save on the cost. [Foreign Language].

[Foreign Language]

[Foreign Language].

[Foreign Language]

[Foreign Language]. We understand, you have been associated, and we have been doing all our best and that is why we have not planned much CapEx for next financial. Now it is the time for us to put, so this is what we have decided. We have been following that and we will ramp up all the capacity in all the segments, first.

[Foreign Language]

[Foreign Language].