Operational Highlights

  • Company delivered record revenue growth, profitability growth and margin performance in Q1 FY27
  • Strong performance driven by healthy volume growth across all business verticals, supported by productivity improvements and higher operating rates
  • Effectively passed on increase in raw material cost through calibrated pricing actions
  • Profitability benefited from one-time inventory gains of ₹46.24 crore arising from low-cost opening stock
  • Higher availability of renewable power helped partially offset increase in petrol-based energy cost
  • Management expects margins to normalize as higher-cost inventory gets consumed

Business Segment Performance

Tyre Cord Business:

  • Demand remained robust during the quarter following GST cuts on tyres and automobiles
  • Healthy growth across all automotive segments driving strong demand for tyres from OEMs
  • PTCF approval process moving in desired direction with commercial sales expected to commence in H2 FY27

Filament Yarn Business:

  • Healthy demand with robust sales volumes and improving product mix
  • Higher share of valuated and better margin products supporting margin expansion
  • Import of commodity filament yarn from China continued at very low prices
  • Finance Ministry did not notify anti-dumping duty despite favorable findings by DGTR

Financial Performance (Q1 FY27)

  • Operating revenue: ₹554 crores (38% YoY growth, 15% QoQ growth)
  • EBITDA: ₹86 crores (331% YoY growth, 55% QoQ growth)
  • EBITDA margin: 15.46% (1050 bps YoY expansion, 400 bps QoQ expansion)
  • Profit after tax: ₹62 crores (301% YoY growth, 57% QoQ growth)
  • PAT margin: 11.13% (729 bps YoY expansion, 298 bps QoQ expansion)
  • Total volume: 19,199 metric tonnes (12% YoY growth)
  • Tyre cord fabric sales: ₹306 crores (69% growth)
  • Filament yarn sales: ₹230 crores (20% growth)

Key Management Guidance & Outlook

  • Normalized EBITDA margin range maintained at 7-10% for underlying business
  • Renewable power share currently over 40%, expected to reach ~50% by H2 FY27 with new Bharuch capacity
  • Capex plan of over ₹100 crores for FY27 focusing on:
  • Value-added products and mother yarn expansion (commissioning in FY28)
  • Renewable power expansion (10.5 MW additional capacity at Bharuch)
  • Safety enhancements post Feb 2025 Bharuch incident
  • Efficiency improvements and consumption reduction
  • Volume growth focus secondary to margin improvement through value-added products
  • Inventory levels maintained at 25-30 days for imported materials, 10-15 days for domestic

Risk Factors Mentioned

  • Evolving geopolitical developments
  • Volatile crude oil prices impacting raw material costs
  • Persistent inflation concerns
  • Cheap imports from China affecting commodity filament yarn pricing
  • Potential demand impact from economic challenges

Project Updates

  • PTCF plant approval process progressing with commercial sales expected H2 FY27
  • Renewable power expansion at Bharuch expected to commission in Q3 FY27
  • New mother yarn capacity and value-added products planned for FY28

Capital Allocation

  • Minimum hurdle rate of 12-15% IRR for new projects
  • Equity investment of ₹8.5 crores in renewable power JV (26% stake)
  • Strong cash balance supporting organic growth initiatives