Pyramid Technoplast Limited (PYRAMID) Earnings Call Transcript & Summary

Hi, everyone, and very good evening to all. I welcome you all to Pyramid Technoplast Q1 FY '27 Call. Please note that 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. I now request the management to just proceed with the opening remarks. And post that, we'll open the floor for Q&A. Thank you, and over to you, sir.

Thank you, Soumya. A very good evening, everyone, and welcome, everyone, and thanks for joining us for our Q1 2027 earnings call. So we have started FY '27 with a strong and structurally healthier operating platform. So today, we have an installed capacity of 20,936 metric tons for the quarter, while volumes stood at 12,992 metric tons, translating into a capacity utilization of around 62%, while volumes in the quarter were [indiscernible] impacted, particularly by a little slowdown in the exports of various products. We believe this is a near-term demand disruption rather than a structural issue. Importantly, unit economics have remained resilient and are actually improving. EBITDA per tonne increased to approximately INR 16,380 in Q1 FY '26 (sic) [ '27 ] compared with INR 11,252 in Q1 FY '26 and INR 15,053 in Q1 FY '26 -- sorry, Q4 '26. This clearly demonstrates that despite the temporary volume impact, our pricing, product mix and operating efficiency are supporting profitability at the unit level. Now coming to the strategic developments. So we are happy to announce that we are expanding in Kutch Western India. It's progressing as planned. We are investing approximately INR 20 crores to INR 25 crores in a new facility with a capacity of 10,000 IBCs units per month, which is expected to be commissioned by March 2027. This facility will strengthen our presence in Kutch and Western India while providing logistical benefits through lower freight cost, faster deliveries and customer service satisfaction. We have also received government subsidy approvals for our newly installed Wada unit and Bharuch facility amounting to approximately INR 24.9 crores for Wada and INR 10.5 crores for Unit 7 Bharuch, which is spread over 10 years. These incentives will effectively reduce the cost of our investments and improve project economics, ROCE and payback over the long term. So our Wada facility is in full swing now across HDPE, IBCs and MS Drums and is already operating above 70% utilization. We expect it to reach 80% during this year. The facility contributed approximately INR 43 crores or 19% of revenue from operations in this quarter, Q1 FY '27. The focus now is to sustain this utilization, extract further operating leverage from the infrastructure already built. Our green energy initiatives are also beginning to contribute meaningfully because of two reasons, not only due to the price advantage, but also we are getting ESG benefits out of it so that we can reduce our carbon footprint and represent India at the global level. The 6-megawatt solar plant was commissioned in October 2025, followed by an additional 5 megawatt in Bharuch and 2.25 megawatt in Maharashtra. and 1 megawatt is still pending to be commissioned, which is going to be commissioned very soon, probably next quarter. We achieved approximately INR 2 crores of savings in this quarter of Q1 FY '27 with the full 14.25 megawatt capacity expected to deliver around INR 15 crores of annual savings. Similarly, our recycling plant commissioned in October has an annual capacity of 5,000 metric tons and can address around 10% to 12% of our raw material requirements. So this is again a meaningful ESG benefit, and we are the only company in India that is into solar and recycling both. The plant processed around 150 metric tons in Q1 FY '27 and generated around INR 25 lakh of EBITDA with FY '27 EBITDA contribution estimated at around INR 2 crores. Our financial front, revenue grew by 36% year-on-year to INR 222 crores. Growth has driven primarily by price increase as sharp increases in raw material costs were passed through to customers. HDPE, polymer drum tonnage was about 4% -- was down 4% year-on-year and IBC volumes were a little hit as export demand suffered due to the war. This was partly offset by strong MS Drums growth and continued [indiscernible] Gross profit rose 19% year-on-year basis, but gross margin compressed a little to 23% as raw material costs rose in step with price increases. Importantly, gross margin in rupee terms for HDPE remained stable, the pass-through the protected per unit profitability. EBITDA grew 50% year-on-year basis with margins at 10%, reflecting the operating leverage kicking in as the total expenses rose only modestly despite new plant commissioning. PAT grew by 32% year-on basis to INR 10.5 crores with margins at 5% despite a sharp rise in financial cost by 179% and depreciation by 61% year-on-year basis, tied to capacity expansion. For financial year '27, our objective remains to deliver approximately 15% revenue growth and EBITDA margins on upwards of 10%. We expect this to be supported by higher utilization, volume recovery, greater contribution from value-added products and solar savings and recycling benefits. We have also maintained a disciplined approach to capital allocation with FY '27 CapEx planned at approximately INR 20 crores to INR 25 crores, primarily towards Kutch expansion and deployed in line with actual. To summarize, the last phase was about building capacity. FY '27 and the years ahead are about filling that capacity and converting it into stronger earnings and returns. With Wada ramping up, Kutch adding future capacity, unit economics strengthening and our solar and recycling initiatives begin to contribute, we believe Pyramid is well positioned for the next phase of sustainable growth and improved profitability. Thank you very much. And thanks for your continued trust and support. Now I would be happy to answer all the questions. Soumya, over to you. Hello? Soumya, are you there? Hello? Soumya, are you there?

Sir, we can commence. [Foreign Language]

Yes, yes.

[Foreign Language] Going ahead and factoring into [indiscernible] of the RM fluctuations. [Foreign Language]

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[Foreign Language] So that we can focus more on coming years.

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[Foreign Language] What is in work-in-progress for there? And how will...

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But we're processing material in this. [Foreign Language]

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Next question we have from Ankit Kanodia.

[Foreign Language] Be it in terms of capacity expansion. [Foreign Language] And from a volume perspective [Foreign Language]

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Next question we have from Kumar Saurabh.

Congratulations on good set of numbers, sir. [Foreign Language] Are we confident [Foreign Language] is it because...

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[Foreign Language] As you said Middle East and exports are suffering [Foreign Language].

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Next question, we have from Ganesh Nagarsekar.

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Customer has also taken some. [Foreign Language]

Next of we have Saket Kapoor.

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We are already serving from our existing facility. [Foreign Language] because there is Kutch Mundra port. We're estimating there volumes will increase...

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[Foreign Language] Expansion and government subsidy benefit. [Foreign Language]

Next question we have from Devesh Arora.

Sir, congratulations, you've posted good numbers. [Foreign Language]

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