GRP Limited Q2 & H1 FY27 Earnings Conference Call Summary

Financial Performance Highlights

Q2 FY27 Consolidated Performance:

  • Total Income: INR1,727 million (30% YoY growth from INR1,331 million in Q2FY26)
  • Sequential Growth: From INR1,573 million in Q1FY27
  • Growth Drivers: 24% higher volumes and 8% improvement in realizations YoY
  • EPR Income: INR67 million (compared to ~INR43 million in Q2FY26)
  • Gross Profit: INR791 million
  • Gross Margin: 46% (down from 51% in Q2FY26 due to raw material cost escalation)
  • EBITDA: INR182 million (60% YoY increase)
  • EBITDA Margin: 10.5% (improved from 8.6% in Q2FY26, expansion of 199 basis points)
  • Profit Before Tax: INR89 million
  • PAT: INR64 million (226% YoY increase from INR20 million in Q2FY26)

H1 FY27 Consolidated Performance:

  • Total Income: INR3,300 million (28% growth from INR2,578 million in H1FY26)
  • EBITDA: INR356 million (from INR222 million in H1FY26)
  • EBITDA Margin: 10.8% (from 8.6% in H1FY26)
  • Profit Before Tax: INR173 million
  • Profit After Tax: INR106 million (from INR37 million in H1FY26)
  • EPR Income: INR115 million (including INR14.9 million from Pyrova Energy which began availing EPR benefits in Q2FY27)

Operational and Business Updates

Core Rubber Recycling Business:

  • Standalone segment revenue grew 30% in H1FY27
  • Reclaim Rubber volumes grew 8% YoY
  • New reclaim technology platform sales continue to rise quarter-on-quarter
  • Approximately 35% of reclaim rubber sales volume now comes from new downstream technology, providing 2-3% overall cost savings

Pyrova Energy Business:

  • EPR registration completed with first EPR income recognized in Q2FY27
  • Cumulative investment: INR1,140 million as of September 30, 2026 (including INR110 million in capital work in progress)
  • Operations improving month-on-month
  • Commissioning of rCB facility at Solapur progressing
  • Expansion of pyrolysis capacity from 15 kilotons to 45 kilotons per annum underway, targeted for completion by March 2027
  • Expected ramp-up period: 30-60 days post-commissioning, with full impact expected from Q2FY28
  • Business turned profitable in Q2FY27
  • Target asset turns: 2x

Plastics Business:

  • Complete turnaround achieved
  • Consolidated revenue grew 38% YoY in H1FY27
  • EBITDA margins improved by 11 percentage points
  • Growth across automotive and non-automotive applications
  • Progressing customer qualifications in compounding and specialty applications
  • Target: 20% growth for the year with stable EBITDA margin of 12-15%

Geographic Revenue Shift

  • Standalone domestic revenue grew 40% to INR1,678 million in H1FY27
  • Export revenue grew 19% to INR1,548 million in H1FY27
  • Domestic sales now account for 52% of standalone revenue (vs. 48% a year ago)
  • Shift led by Pyrova Energy (largely domestic sales) and healthy domestic demand for Reclaim Rubber

Capital Expenditure and Financing

  • H1FY27 Capex: INR246 million
  • Funding: Internal accruals and long-term debt including ECB of up to EUR12 million from PROPARCO
  • EUR7.5 million drawn as of September 30, 2026 (unchanged from March 31, 2026)
  • Gross Debt: INR2,191 million as of September 30, 2026
  • Net Debt: INR2,140 million as of September 30, 2026
  • Debt-to-Equity Ratio: 1.13x (vs. 1.08x as of March 31, 2026)

Working Capital Management

  • Working capital cycle reduced by 11 days from 95 days (March 31, 2026) to 84 days (September 30, 2026)
  • Achieved through proactive cash flow planning and disciplined working capital management

Sustainability Initiatives

  • Received EcoVadis Gold Rating (top 5% of companies assessed worldwide)
  • Renewables met 48% of standalone power needs in FY26
  • Expected to cross 50% target post-commissioning of Gujarat Solar project

Management Guidance and Outlook

  • Priority for H2FY27: Completion of rCB commissioning and approvals, growing reclaim market share with new technology sales, converting plastics development programs into commercial volumes
  • Target: Mid-teen EBITDA margins for the integrated platform business
  • External challenges: Geopolitical volatility affecting raw material prices, elevated crude oil prices (~USD100/barrel), natural rubber prices at decade highs
  • Regulatory environment: EPR regime in India considered stable with government and brand owners working to ensure success

Tax Rate Clarification

  • Q1FY27 had short provision of past taxes of ~INR17 million which has been regularized
  • Q2FY27 tax rate normalized to current levels