The company manufactures sustainable plastic and paper-based packaging solutions for food service, QSR, FMCG, and Retail sectors.
It has a presence in 26 Indian states and exports to over 30 countries.
Category-wise Revenue Contribution (FY26):
Thin-wall food containers: 82.72%
PLA and paper straws: 17.16%
Mold designing services: 0.12%
Capacity Utilization (FY26):
Thin-wall food containers: 77.74%
PLA straws: 28.33%
Paper straws: 34.13%
The company has over 40 recurring international clients.
Capacity Expansion & Capex Details
The company is undertaking a significant capacity expansion project.
Revised Project Cost: INR 130-135 crores (increased from an initial INR 100 crores).
Reasons for Cost Increase: Currency fluctuation (INR/USD from 85-86 to 96), increased project scope (additional printing and injection molding machines), and increased built-up area for storage and infrastructure.
Funding: Entirely through internal resources; no external funding or additional loans.
New Capacity Details:
Plastic food container capacity will increase almost three times.
Addition of paper-based food packaging, including paper cups (750 metric tons).
Injection molding machines increased from 20 to 29.
Expected Revenue Potential:
Existing capacity: ~INR 210-215 crores
New project: Additional ~INR 300 crores
Combined potential: ~INR 500 crores per annum
Timeline: Project delayed by approx. 3 months due to delays in building plan approvals. Commercial production now expected to commence from September 2026, with full operations by October-December 2026.
FY28 Guidance: Target turnover of INR 500+ crores with EBITDA of INR 90+ crores.
Raw Material Price Impact & Margins
Key Raw Materials & Current Prices:
Polypropylene (for food containers): INR 135/kg (peaked at INR 150/kg; pre-war was INR 90-92/kg)
PLA: INR 205/kg (pre-war was INR 195-197/kg)
Paper for straws: Unaffected, locally supplied.
Pricing Policy: All raw material price fluctuations (up or down) are passed on to customers immediately. The company's operating model does not absorb price changes.
Margin Context:
FY26 EBITDA margin was ~18-19%.
Management reaffirmed a sustainable EBITDA margin range of 18-19% in the long run.
The dip from FY25's higher margin (23%) was attributed to passing on the benefit of lower PLA raw material costs to customers in FY26.
High margins in PLA products (35% EBITDA margin) can cause overall margin fluctuation despite smaller revenue contribution.
Absolute EBITDA in INR terms remains intact despite raw material volatility; percentage margin fluctuates with sales value.
War Impact: The geopolitical situation in the Middle East caused raw material supply disruption and price spikes. The company mitigated this by sourcing from China at competitive prices and has assured supply until August 2026.
Product & Market Specifics
Straw Business (PLA & Paper):
Highly seasonal (peak demand: 4-4.5 months), linked to the beverage industry (e.g., Coca-Cola, Pepsi).
Average annual utilization is not expected to exceed 35% due to seasonality.
Despite low utilization, it remains a highly profitable segment.
No further capacity expansion is planned for straws.
New Paper Cup Business: Expected EBITDA margins are similar to those of the food container business.
Customer Base:
No single customer contributes more than 5-6% of total sales.
Export: 5 key customers (1 in US, 2 in UK, 1 in Greece) contribute 50-60% of export turnover.
Domestic: Over 300 distributors; 15-20 are top-tier (A category). Corporate customers include Parle, Dabur, Haldiram, and Coca-Cola franchises.
Inventory & Working Capital
The company maintains high raw material inventory as a strategy (typically 4 months).
Current Inventory: ~5-5.5 months total (3+ months raw material, 2-2.5 months finished goods).
Sourcing: Normally, 85% of raw material is imported (primarily from the Middle East/Abu Dhabi for price and quality reasons), and 15% is procured domestically.
Future Outlook
Management is focused on stabilizing the new expansion project before considering further diversification or new product categories.
The company has plans for future expansions but will not disclose them until the current project is complete.
