Key Quantitative Figures - Q2 FY27 Performance

Financial Performance:

  • Total Income: INR 2,159 million, up 23% YoY
  • Asset Pooling Income: INR 1,759 million, up 19% YoY
  • MHE Income: INR 393 million, up 52% YoY
  • EBITDA: INR 1,097 million, up 25% YoY
  • EBITDA Margin: 50.8%, up 91 basis points YoY
  • Depreciation: INR 576 million
  • Finance Costs: INR 215 million
  • PAT: INR 178 million, up 62% YoY
  • PAT Margin: 8.2%
  • Cash PAT: INR 754 million, up 26% YoY

H1 FY27 Performance:

  • Total Income: INR 4,294 million, up 26% YoY
  • EBITDA: INR 2,239 million, up 23% YoY
  • EBITDA Margin: 52.1%
  • PAT: INR 425 million, up 42% YoY
  • Cash PAT: INR 1,566 million, up 25% YoY

Acquisition Details (Vimprotech and TIPS)

Transaction Structure:

  • Agreement to acquire 100% of Vimprotech and TIPS businesses for equity value of INR 142 crores
  • Acquired through slump sales into newly incorporated wholly owned subsidiaries
  • Vimprotech into Vimprotech Private Limited (manufacturing arm)
  • TIPS into Total Integrated Packaging Solution Private Limited (pooling arm)
  • Signed BTA on October 26, 2026

Financials of Acquired Entities (FY26):

  • Vimprotech: Revenue INR 470 million, Enterprise Value INR 1,020 million
  • TIPS: Revenue INR 180 million, Enterprise Value INR 400 million
  • Combined FY26 Revenue: INR 617 million
  • Combined EBITDA Margin: 28%
  • Revenue CAGR: 44% over last three years

Strategic Rationale:

  • Backward integration into plastic manufacturing (design, mold-making, production)
  • Adds 0.25 million crates and trays to asset pool
  • Expands customer base by 200+ customers
  • Strengthens Southern footprint with cross-selling opportunities
  • Improves turnaround time, quality control, and cost efficiency
  • FY26 pro forma accretive to revenue, EBITDA, and PAT
  • Improves net debt to EBITDA ratio
  • Key managerial persons to continue with leadership continuity

Operational Highlights

Asset Base and Utilization (H1 FY27):

  • Total Assets: 15.5 million (from 13.8 million a year ago)
  • Net Asset Addition: 1.7 million
  • Pallet Utilization: 89.3% (in line with Q2 FY26)
  • Container Utilization: 73.7% (up from 71.7%)
  • MHE Utilization: 82.3%
  • Target: Pallet utilization to reach 90-91% range

Customer and Network Metrics:

  • Customers: 1,100+
  • Touchpoints: 11,000+
  • Fulfillment Centers: 27 (consolidated from CHEP integration)
  • New Customers Added in Q2: 37 (24 LEAP + 13 TARON)
  • New Customers Added in H1: 85

Movement Hire Business:

  • Q2 Movement: 720,000 pallet movements
  • Annual Target: 3.6-3.7 million movements
  • Focus on converting customers from static to movement hire (dairy, textile sectors)

IPO Proceeds and Balance Sheet Strength

IPO Fund Utilization:

  • Fresh Issue: INR 480 crores
  • Debt Repayment: INR 3,596 million used to repay debt
  • Unutilized: INR 1,200 million for general corporate purposes

Leverage Position (Post-IPO):

  • Debt to Equity: 0.48x (vs 4.4x in H1 FY26)
  • Net Debt to EBITDA: 1.9x
  • Investments Held: INR 1,100 million

Credit Rating Upgrade:

  • India Ratings (Fitch Group) upgraded long-term rating from A to A+ for both LEAP and TARON businesses
  • Third upgrade in 3.5 years

GCC Expansion Update

Current Status:

  • Wholly owned subsidiaries established in Saudi Arabia and UAE
  • All necessary licenses and approvals obtained
  • Foundation building phase: entity setup, warehouse infrastructure, hiring key people
  • Engaging with 26 prospective customers
  • Contemplating acquisitions in GCC market
  • Expenditure to date: INR 2.5-3 crores
  • Expected revenue start: Possibly from November 2026

Capital Allocation and Capex

FY27 Guidance:

  • Capex: INR 450 crores
  • H1 Capex: INR 213 crores (vs INR 201 crores last year)
  • Revenue Growth: 20-27% organic growth
  • Revenue Target: INR 918-920 crores
  • PAT Target: INR 90 crores (40-44% growth, management guidance of 60-80% growth)

Capital Allocation Philosophy:

  • Prioritize contracts with longer duration (8 years) for new asset deployment
  • Use refurbished assets for shorter contracts (2-3 years)
  • Selective asset addition based on raw material cost fluctuations
  • Focus on maintaining ROCE and ROE improvement

Working Capital Management

Receivables Position:

  • DSO: 122 days (improved from 128 days at year start)
  • Target: Below 90 days by end FY27
  • Challenges: Large customers working on PO basis requiring centralized PO solutions
  • SAP S/4HANA implementation expected to drive improvement

Business Segments Performance

Revenue Contribution:

  • Pallets: 64%
  • Auto Containers: 20-22%
  • MHE: 14-16%

Segment Growth:

  • MHE Business: Revenue up 60%, EBITDA up 28%

Raw Material Cost Environment

Cost Pressures:

  • Plastic Granules: Significant cost increase (30-50% fluctuation)
  • Timber: Controlled through Plinova with 2-3% fluctuation over six years
  • Pallet Cost: Average ~INR 1,750
  • Container Cost: 60-70% higher prompting delayed purchases

Future Outlook and Priorities

Strategic Priorities:

1. Deepen penetration with existing customers

2. Convert customers from static to movement hire

3. Cross-sell across pallets, containers, and MHE

4. Open up new industries (FMCG, electronics, EV, agri)

5. Integrate Vimprotech and TIPS acquisitions

6. Build GCC business in measured way

7. Maintain discipline on asset utilization, returns on capital, and balance sheet strength

Growth Initiatives:

  • Solar panel industry expansion with active RFID tracking
  • Textile industry movement hire conversion
  • Automotive sector expansion post raw material cost normalization
  • 3PL pallet penetration growth (355% increase in quarter)