Pyramid Technoplast (NSE:PYRAMID) Q2 2027 Earnings Call

6:44 Team, leadership team and bank who are committed to stay in the business. Everyone, Good afternoon, sir.

10:24 Good afternoon. So may I start?

11:52 Sam, can you... Yeah, Samir. Now I can hear you. But we do need a... Hello? Can you hear me?

12:57 Yeah. So I'm here. We can hear you. So should we start? Yeah. Let me start the recording. Let me start. Go ahead, Samir. Hi,

13:18 everyone, and a very good afternoon. I welcome you all to Pyramid Technoplast q two and h one f y twenty seven con call. Please note that the discussion on today's call may include certain forward looking statements and must be therefore viewed in conjunction with the risk pertaining to the business. We have on call today mister Vijay Kumar Agarwal, the managing director and mister Jay Prakash Agarwal, CFO and the full time director. I now request the management... I hand over the call to the management to proceed with the whole thing, Japans. Who's that? Open. So I'm gonna speak in the mic. Speak in the mic. Yeah. Jay, you can start your opening remarks. Yeah. Hi. Good afternoon, everyone. A very warm welcome, and thanks for joining us.

14:08 So for q two, h one q two and h one financial 2027, we are here to receive the earning calls. So I'll take you through the journey. So our operating performance for the quarter, the progress on our strategic projects, our financial results for quarter two, and the... And first half, and our outlook for the rest of the financial year of '27. So q two financial year twenty seven was a quarter of volume recovery. Installed in in... Production capacity for the quarter was around twenty thousand nine ninety three metric tons, and volume rose to around fourteen thousand seven ninety eight metric ton, taking capacity utilization to around 70%, up from 62% in q one f y twenty seven to 62% in q two f y twenty six.

15:03 Volumes grew 21% year on year and fourteen percent quarter on quarter with year on year growth across all three product categories. For the first half, volume stood at twenty seven seven eighty nine metric ton at an average utilization of about 66%. Importantly, unit economics remains well ahead of last year and constant. EBITDA per ton was approximately $1,371.08 in q two f y twenty seven, up by 33% from $10,003.26 in q two f y twenty six and from 10,082 in q two f y twenty five. So average in license was above 1.61 lakh per ton, up by 22% year on year basis, reflecting our pricing, product mix, and the pass through of raw material cost to the customers.

16:00 Coming to the strategic developments. So our expansion in Kutch is progressing as planned. We are investing about $22.25 crore in a new facility with a capacity about 10,000 IBCs per month, which is expected to be commissioned by March 2027. This facility will strengthen our presence in Kutch and Western India while providing logical benefits through lower freight cost, faster deliveries, and improved customer service. The CapEx will be deployed in line with actual demand. And once commissioned, the plant will add to the operating leverage of our existing network. So we have our... Also received government subsidy approvals for our Wada and Bruich facilities amounting to approximately 35 quorum in total, 24.9 quorum for Wada over ten years, and 10.5 quorum for Bhanuch.

16:56 We expect to receive the Wada sanction by March 2027, and Baruch application for sanction will be filed in the next phase. These incentives will effectively reduce the cost of our investments, support cash generation, and improve project economics, ROCE, and payback over the long term. Our Wada facility is in full swing across STP drums, IBCs, and MS drums, and we expect overall utilization to reach around 80% during this financial year. The focus now is to sustain this production and extract further operating leverage from the infrastructure already created. Our green energy initiatives are also contributing meaningfully.

17:44 The six megawatt solar plant and 2.25 mega... Megawatt in Maharashtra were commissioned in October 2025, followed by an additional five megawatt in Baruch in February 2026, with further one megawatt at Baruch plant in next phase. We have achieved approximately 3.89 crore of savings in in in this half year financial year 2027. And the full 14.25 megawatt capacity is expected to deliver around 15 crore for annual savings. The total investment in our solar project is at 60 kuru. So about four years is the payback, what we are estimating. Similarly, our recycling plant commissioned in October 2025 was set up with an investment around 8 to 10 kuru and an expected payback of about two to three years.

18:39 The plan generated 33 lakh of EBITDA in q two f y twenty seven, and we estimate its f y twenty seven EBITDA contribution at around 2 crore. Beyond the savings, the facility reduced plastic waste and strengthened our ESG credentials also, in line with India's sustainability agenda. Our... On the financial front, our revenue grew by 48% year on year to $2.38 crore in q two f y twenty seven, and total income include other income was around $2.38 to $1.08 crore. Growth was driven by both higher realization, up by 22% per ton, and higher volume, up 21%.

19:27 Of the 77 crore increase in revenue, Improved realization contributed about 43.6 crore. Volume and product mix growth about 24.9 crore, and trading income about 8.7 crore. Polymer drum tonnage rose 5% year on year basis and 16% quarter on quarter. IBC units grew 17% year on year basis, and MS drum tonnage grew 73% year on year basis. Our value added IBC business contributed about 32% of the revenue in this quarter q q two FY twenty seven. Our customer base remains well diversified with over 500 customers.

20:12 Our top customer accounts for about 6% of the revenue, and our top 10 customers gather for about 29%. On the front of GP, gross profit rose about 28% year on year to 55.3 crore, while gross margin remained at 23% as raw material cost rose in step with price increases. EBITDA grew 61% year on year to 20.3 crore with margins at 8.5% compared with 7.8% in q two f y twenty six. Cost discipline supported this operating expenditure, including raw material gross about 14% year on year against revenue growth of 48, and employee cost were broadly flat at 6.2 per room.

21:03 So PAT grew by 54% on a year on year basis to 9.5 per with margins at about 4%. PBT rose 53% to 12.5 per. Even as finance cost has increased by 147% year on year basis and depreciation by 37% year on year basis increased with the expanded capacity and the solar investment. For the first half, revenue grew 42% year on year to $4.60.5 crore. By segment, polymer drums contributed about 204 crore, IBC about $1.54... $1.50 crore, MS drum about 64 crore, and other operating income about 42 crore. Gross profit rose 23% to $1.00 6.7, and EBITDA grew 55% to 41.6, with margins improving to 9% from 8.2%, and PAT grew by 42% to 20.

22:01 For f five twenty seven, our object... Objective remains to deliver approximately 15% revenue growth and improve EBITDA margins towards 11 to 12% with h one revenue up to 42%. We are well ahead on growth. On margins, h one stood at 9%, up from 8.2% a year ago, and we expect four levers to drive further improvement in the second half. Higher utilization, full benefit of captive solar savings,

22:32 a growing contribution from the recycling plant, and operating leverage and product mix and product. We continue to follow disciplined approach to capital allocation with the major phase of capacity and efficiency investments now behind us. By 05/27, CapEx is planned at approximately 20 to 25 per hour, down what... Down from about 90 per hours in FY twenty six, primarily towards the catch expansion and deployed in line with actual demand. To summarize, the last phase was about building capacity. FY '27 and the years ahead are about building that capacity and converting it into stronger earnings and revenue growth and returns. With what I input swing, catch adding feature capacity, our solar and recycling units initiative contributing, and a healthy balance sheet, we believe Pyramid is well positioned for the next taking the call. So thanks for your remarks, sir.

23:47 Request the participants to please raise their hands for q and a round. So we'll wait for wait for a minute for queue. Kindly raise your hands. So the first question is from Kumar Saurabh.

24:33 Please go ahead. Sir, hope I am audible. Yes, sir. Yeah. Congress on very good set of numbers and very good progress, sir. I have two questions. First, sir, in the slide number 12, was my home the FY twenty seven revenue 15%. EBITDA margin 8.6% say 11 to 12%. Performance I think we are already doing very, very well. I think more than two x of the guided revenue. But margin will be 9% around, of course, the recycling captive, all of this has to contribute. So we are progressing, but we are not yet closed there. So do you have any comments to add on these two things? Hello?

25:28 Sir, please go ahead, sir. So sales surely better over. Our margins are... We just say it's one to two margin performance basis before FY '27. Okay. Okay. Okay. And, sir, second question was, again, end user industry, they keep chemical. Everybody's posting good number, but what numbers are the price rise volumes number volume rise which is a very good signal.

26:21 Do you think the volume growth will come back to the chemical industry which has a science or any comment on the end consumer industry? So end client site Mhmm. So end client sites are separate. Compared to last one year, things look better. Got it. Got it, sir. That's all I had. I'll come back in queue. Thank you, and wish you happy Diwali, sir.

27:20 So the next question is from Sushant Sonny. You can unmute. Yes, sir. Thank you for taking the question, sir. So, Mira, question gross profit here. Right? So which is the gross profit per KG Obviously, a b volume and realization is a bit off. Right? Because to be really honest. To gross profit per kg extra conversion to offset the higher working capital. And steady state depending on this 33...

28:23 35 rupees per kg here blended. And historically, they quote to you, 35 rupees. Do you think even other prices this would be around that 35 rupee angle? Thank you, sir. And so second question was just on other expenses. Despite solar benefit But if I look at it in terms of per kg, you could just throw some more light, that would be really good.

29:30 Hello? Hello? So we are targeting PYRAMID businesses. So this... In this quarter, what we have done is we have approached long route customers also, plus we have incurred some employee expenses with... To keep PYRAMID now every employees are back. So next 0.5. So that is where we can see some kind of jump in other expenses. Otherwise, there is nothing extraordinary. But, sir, operating leverage should come in. No? Because So some of it, yes, you are right extra transportation.

30:43 So idea is to... That is why we are planning a catcher expansion. Customer So we can save on the cost, this transportation cost, which will benefit the company at the end. Got it, sir. Because, sir, for us to reach EBITDA margins of 10, 12% apart from subsidies, sir, because core business, if you want to reach 10, 12%, getting operating leverage and other expenses is important. Right? Because you are already getting benefit of 4 crores currently, which might on a half yearly basis, right, which might go to 7.5 crores. So benefit expenses per kg, but raw... Like, transportation cost or consumers excess transportation Got it. So to feed Maybe transportation cost of consumers operating expense Right?

32:22 Shushant, revenue and EBITDA per ton both goes up. So you have to look at EBITDA per ton only. But the cost is also going up and revenue per ton is also going up. Honey, I'm doing it per kg. So, like, other expenses per kg. How about to take, like, in revenue per kg or EBITDA per ton to a pass on whether you just have to focus on EBITDA per ton or EBITDA per kg, whatever you are looking at. That will give you a real picture. Okay. Okay. And, sir, just one last question. We do one megawatt solar. Can there's a VIN? Do you think commissioning It is almost started with the... So job installation and to charge So hopefully, by next month, we should start getting that benefit also.

33:14 Okay, sir. Thank you so much, sir. Best of luck, and happy Diwali to you guys. Requesting everyone requesting everyone to raise their hand in order to ask any question. So the next line of question is from Kumar Saurabh. You can unmute yourself. So my question is, if we look at EBITDA per ton, there is a significant increase where compared to last quarter, whereas the margin has decreased compared to last quarter. So my question is, should we even consider margin in this business, or should we consider EBITDA per ton? Because if there is a pass through of, you know, the cost increase because you have also shown a realization increase.

34:02 So if there's a pass through of any kind of price increase, should we look at margin or should we look at it up or down as a better guidance?

34:13 It's better Okay. Okay. So you do current, sir, EBITDA, pardon, can number it? Do you think this is sustainable or the... It is more because of the price and fee? No. No. Not because. The quarter say we are constant on this and coming quarters also will be constant, and we will be improving further. Okay. Okay. And, sir, cash flow, just say h one cash flow

35:26 Okay. Okay. Okay, sir. That's all I had. Thank you. Requesting everyone to raise their hands in order to ask question. Next question would be taken from Alok Trivedi. Please unmute, Alok. Hello?

35:53 Hi, sir. You are on two question. Yes. I had two questions, sir. One was that h one may have already EBITDA margins were about 9%. And for FY '27, guidance somewhere around 11 to 12% to, sir, what would be the bridge and solar recycling mix and the operating leverage

36:35 recycling business is approaching. It is picking demand now. This quarter quantity, but next quarter also, were pushing furthermore increase in... It will add online. It will keep on improving our EBITDA level. Okay. Okay, sir. Noted. And, sir, another question was, keep gross margin a mandatory down over 23.2% since last year. And raw material is passed through from contractual, and how much is it from the lag? And what happens to the margin if the polymer price falls?

37:23 That is one thing. Yes, sir. Understood. Thank you, sir. The next line of call is from Saket Kapoor. You may unmute, Saket. Sir, quarter on quarter expenses Sir, this is utilization levels

39:00 606770%. Yeah. 70%. And it will be spreading on ten years.

40:30 Diversity machine. It is surprising that the bit... It... Very short notice. It is running full blaze now. My plan in coming year. Okay. Maybe we might add few more machines coming years. So we saw that 70 lakhs of revenue has come from that machine.

41:34 So this is right now going on. And if if everything goes well, market is open for us. For 4041 ramp up expect half So what what should be factoring in terms of the EBITDA trajectory, sir, on a ballpark number? $45.45 would be the number. Right. Also, I'm in presentation maybe copy changes to your format both both continue data points both

44:04 The next line of call is from Sushant Sune. Sushant, feel free to unmute. Sir, for giving the opportunity again. Sir, I just wanted to check one thing, sir. Vision

44:20 or already 75, 80%. Obviously, up expansion IBC. Just in IBC vertical, most of the sales are in chemical vertical. To is kinder quite plan pharma and food grade maybe regulations but maybe customer stickiness will also be there. Our plant is already approved for food industry, sir.

45:15 So that's not a challenge, and we are already doing business with pharma, their ancillary industries, and food industry. Got it, sir. And, sir, transportation cost transportation cost because, obviously, a volume

46:09 Work in progress. Got it, sir. So... And just one last question. Capacity increase because Okay, sir. Thank you so much, sir. Thank you. So next line of question is from Preeti Agarwal. Yeah. Thank you so much for the opportunity. Utilization level 70% as against 80% through FY twenty seven target.

46:56 So what is the demand and revenue visibility ahead?

47:06 Demand quarter to quarter demand seventy five eighty. And, so, my h one revenue have a 40%, year on year up here, and f y twenty seven guidance is 15%. So is this guidance a little conservative for f y twenty seven? Okay, sir. Thank you. So the next line of question is from Saket Kapoor.

47:57 Saket, you can unmute. Sir, cash flow related question I wanted the advanced text number. '28 financial year.

49:46 Whatever we have envisaged from the solar facility benefits in the power for... Because that is all flowing into the bottom line as per our plan?

50:00 Almost. 90%. 80, 90%. 10080%. So that is all eluding key capacity enhancement So there is nothing that the business sentiment because of that rule and the everybody of raw material is time.

51:59 3.75. Thank you. So for any further questions, please raise your hand. In case if there are any questions, please raise your hand. As I can see, no one has raised their hands. So thank you for your time, everyone. I request the management to give the closing remarks. Well, the... Our performance is increasing on quarter on quarter basis after...

52:51 And it is constant. More importantly, it is constant. So we see a very healthy growth coming up in next quarter. We we... As a pyramid from later and as a a share of the team, I would request to keep supporting us, keep joining, keep teaching us, and keep learning. Thank you. Thank you so much. Thank you, everyone. Have a good day. Thank Thank you you. Very much. Thank you. Happy Diwali. Happy Diwali. Okay. Thank you. We'll close the call now.

53:44 Thank you.