Huhtamaki India Q3 CY26 Revenue Up 24%

Net Sales: INR 748 crores, up 23.7% YoY.
EBITDA: Growth of 1.2% YoY (0.1% margin change). On a comparable basis (excluding one-off gains from prior year), EBITDA grew ~18% YoY.
EBIT: Reported EBIT was flat YoY. On a comparable basis, EBIT grew ~18% YoY.
PAT: INR 30 crores, down 19.1% YoY (from INR 37 crores). The decline is primarily due to a one-time restructuring charge of INR 96 million related to the closure of the Baddi labels plant.
Volume Growth: 7% YoY in Q3; 4% YTD.

Sales: Growth of 16% YoY.
EBITDA: INR 204 crores, representing ~10% of sales, growing 25% YoY.
EBIT: INR 153 crores, up 22% YoY. This figure is after offsetting INR 8.8 crores of prior period depreciation correction booked in Q1.
PAT: Growth of 13% YoY.
Earnings Per Share (EPS): Improved by 13 percentage points.

Baddi Plant Closure: The company announced the closure of its labels plant in Baddi. The notice period ended around November 1, 2026. The process was smooth with no supply disruption to customers, as volumes were shifted to the other two label plants in Ambernath and Bangalore. The closure resulted in a one-time charge of INR 96 million but is expected to improve future efficiency and optimize costs.
Capacity & Utilization: Management stated there is sufficient capacity available to meet market demand for the next 2-3 years without significant investment. Focus is on productivity and efficiency improvements to free up capacity.
Sustainability & Innovation (blueloop): The company won three awards from the Indian Folding Carton and Flexible Packaging Association (IFCA) for innovative, sustainable packaging solutions:
OmniLock: A stand-up pouch for cocoa powder.
blueLite: A duplex structure tomato ketchup sachet that eliminated aluminum foil and reduced plastic layers, offering significant cost savings.
A unique label for a UK customer on metallic film.
Safety Performance: The company reported zero safety incidents (first aid, medical, or lost time) in Q3. Safety is a priority, with a focus on leading indicators like near-miss reporting and preventative observations.

Growth Drivers: The 24% revenue growth was attributed to a combination of raw material price pass-through (as per contracts), a favorable product mix (focus on high-value products), and volume growth.
Margins: The flat reported EBIT margin was due to one-off gains in the prior year period. The comparable growth was strong. Margin fluctuations between quarters are attributed to timing lags in passing through sudden raw material cost inflation (e.g., experienced in September 2026). Management aspires to maintain and improve growth and margins but does not provide specific forward-looking guidance, citing competitive reasons.
Market Context: Management noted that while some FMCG customers are reporting volume declines, Huhtamaki is gaining market share, as evidenced by its volume growth in a fragmented market.
Regulatory Environment: Discussed existing regulations mandating the use of recycled plastic content (PCR) in laminates, which presents an opportunity. The company feels well-prepared for any stricter future regulations.

Volume/Pricing Split: Management estimated that the ~INR 150 crore YoY sales increase was roughly equally driven by volume, pricing, and mix, though no exact breakdown was provided.
Margin Sustainability: Explained that the QoQ margin dip from ~10% to ~8% was due to a timing lag in passing through sudden September cost inflation, which would be recovered in subsequent months.
Baddi Closure: Confirmed no similar restructuring actions are currently planned for other plants. Customer transition from Baddi is complete and smooth.
Land Held for Sale: Inquired about a property in Daman. Management declined to provide a market price, stating the bidding process is ongoing and disclosing a price would be speculative. They confirmed the asset is correctly valued on the balance sheet.
AI Implementation: The company has several AI projects underway focused on improving productivity, quality, and safety, though these are in early stages.

The transcript is available on the company's website at https://www.flexibles.huhtamaki.in/