Tinna Rubber & Infrastructure (NSE:TINNARUBR) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Tinna Rubber and Infrastructure Limited Q1 FY twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to miss Tinna Kapoor from Go India Advisors. Thank you, over to you, ma'am. Thank you, Shruti. Good afternoon, everybody, and welcome to Tinna Rubber and Infrastructure Limited's earnings call to discuss q one FY twenty seven results. We have on the call mister Gaurav Sekri, joint managing director, mister Subodh Kumar Sharma, director and chief operating officer, and mister Abhay Kumar, chief financial officer.

0:54 We must remind you that the discussion on today's call may include certain forward looking statements and must therefore be viewed in conjunction with the risks that the company faces. May I now request mister Baurav Sekri to take us through the company's business outlook and financial highlights. Subsequent to, we will open the floor for q and a. Thank you, and over to you, sir. Thank you, Shana. Am I audible okay? Yes, sir. Okay. Good afternoon, and thank you for joining us today on this call. Our financial results and earnings presentation are available on our website and on stock exchanges. I believe you have had a chance to review the same. I will briefly take you through the strategic updates post which my colleague, Subodh, our COO, will take over and give details about the operational and financial performance highlights for the quarter.

1:53 We are delighted to share that we have commenced FY 2027 on a very strong note, delivering our best ever quarterly profitability. During the quarter, we achieved record financial performance with EBITDA exceeding INR30 crores, PAT surpassing INR20 crores, EBITDA margins of over 21% and PAT margins of more than 13% on both stand alone and consolidated basis. This performance is the outcome of our sustained focus over the past few years on enhancing profitability through operational efficiencies, cost discipline and increasing share of value added products.

2:39 We are pleased to see these strategic initiatives translating into tangible results, reflecting in our margin expansion and continued commitment to creating long term value for all stakeholders. The following strategic milestones underscore the significant progress we have made towards achieving our Vision 29 objectives. We currently have a tire crushing capacity of 185,000 tonnes per annum in India and continue to strengthen our processing capabilities. As part of our expansion roadmap, we are on track to increase this capacity by 27% to 235,000 tonnes per annum by FY twenty twenty seven, further enhancing our operational capabilities and supporting our long term growth strategy.

3:29 During Q1 of FY twenty twenty seven, we have executed INR27 crores of CapEx as part of our broader investment plan of around INR100 crores across FY twenty twenty seven and FY twenty twenty eight, strengthening our growth and operational capabilities. We continue to strengthen our focus on responsible growth with our FY twenty twenty six EUV verified life cycle assessment validating over 10,370,000 kg of CO2 emissions reduction across our two integrated and across our two fully integrated manufacturing locations. The integration of renewable energy has enabled emissions reduction of up to 58.7% with further improvements expected through increased adoption of captive renewable energy.

4:26 Our transition towards cleaner energy continues to gain momentum with renewable energy contributing 51% of the company's total power production in Q1 twenty twenty seven, supported by a more than threefold increase in global capacity from 1.23 megawatt to 4.48 megawatt and a strategic third party green energy sourcing initiatives, which have resulted in savings of INR 1.19 crore during the quarter. We have successfully commissioned rooftop solar plants at our Gomundi Pundi Tamil Nadu facility of nine ninety nine kilowatt power in June 26 and at our Varleya, Maharashtra facility of 2,218 kilowatt power in July 2026, further strengthening our renewable energy footprint.

5:25 We had mentioned in the past and we are renewing our commitment to innovation by allocating 5 crore rupees towards research and development in FY '27. During the year, we have established a dedicated R and D team focused on developing technology for high performance, new generation grease hydro rubber materials and engineered plastics, advancing value added applications for recovered fiber from passenger tires, further enhancing the PPO quality to drive greater value addition. Turning to project development, following up some key updates. The ongoing 3,500 metric ton per annum MRP capacity expansion is progressing as planned and remains on track for commissioning by Q3 of FY twenty twenty seven, increasing the company's total MRP capacity to 20,000 tonnes per annum, which it is our belief is the largest capacity of MRP in the world.

6:31 The Tyre Pyrolysis oil facility at Baralik commenced trials in Q1 of FY twenty twenty seven and it is expected to commence commercial sales in Q2 of FY twenty twenty seven with operations stabilizing by Q3 of FY 'twenty seven. The RCB production is scheduled to commence in Q3 of FY 'twenty seven followed by operational stabilization and commercial sales by Q4 of FY twenty seventeen. Our PCMB division continued to witness strong momentum in Q1 of FY twenty twenty seven with revenue increasing threefold to INR 12 crores compared to only INR 4 crores in Q1 of previous year.

7:17 The PCMB business is contributing 8% to the company's top line, in line with the indications given in the earlier calls. The division's initial 6,000 tonne per annum capacity operates is operating at 82% utilization, while the commissioning of the expanded facility in Haryana has increased our total capacity to 18,000 tonnes per annum. With enhanced manufacturing capabilities and strong business momentum, this division is expected to contribute 10% of FY twenty twenty seven revenues. We have also successfully registered on the government portal as an authorized recycler, allowing the company to generate EPR credit from the plastics recycling business from 04/01/2026.

8:12 I am pleased to also share that the PP Build Tech business continues to scale up with the Kolkata plant commissioned in Q4 of previous year progressing well and the utilization expected to improve over the coming quarters. The business is in advanced stages of acquiring land in Western Maharashtra for a new manufacturing facility to expand construction chemicals capacity and introduce new products across construction system applications. We are targeting growth of over 30% in this business and cross the milestone of INR100 crore in revenue in FY twenty twenty seven. Turning to our international projects, TINNARUBR continues to strengthen its global presence with the establishment of its wholly owned subsidiary, Tinna Rubber, Chile, SPA in Santiago, Republic Of Chile.

9:10 The initiative is aimed at enhancing the company's global ELP sourcing network and expanded international recycling footprint. Global Recycle LLC Oman has delivered a good improvement in Q1 FY twenty twenty seven, generating revenue of approximately INR9 crores and achieving EBITDA margin of 8.53%. We expect this to improve in the coming quarters. While profitability had been impacted in the recent quarters by elevated raw material costs and the ongoing Middle East Crisis, the implementation of corrective measures including raw material import into Oman, has led to a meaningful recovery in margins and overall profitability during the quarter.

10:01 Bodla Investment, PTY Limited South Africa, continues to progress as planned. Phase one CapEx has been completed, operations have commenced and exports of semi process material has already begun. We expect to breakeven by Q2 of FY twenty twenty seven. Phase two in South Africa is focused on full scale tire recycling and this has also been initiated where equipment to manufacture and process 9,000 tonnes of tyres to produce crumb rubber is on the way to South Africa, and we expect to start production in Q2 or Q3 of the current financial year.

10:49 In Saudi Arabia, land has been allocated to the company for a proposed facility of 24,000 tonnes per annum tire recycling facility. We hope that we will commence the construction of this facility towards the end of this calendar year. Of course, this is subject to normalization of the geopolitical situation in The Middle East. Looking ahead, we remain focused on delivering our Vision 29 objectives through capacity expansions, new product development, sustainability led investments and on expanding our global footprint, we are targeting presence across 10 locations and revenue of 1,000 growth by FY twenty nineteen, while maintaining 25% plus revenue CAGR, 33 plus profitability CAGR and EBITDA margins over 18% and ROCE exceeding 30%.

11:52 We believe these strategic initiatives position us well to deliver sustainable growth and create long term value for our stakeholders. With that, I would like to hand over to Subodh for his insights on operational and financial performance. Over to you, Subodh. Thank you, Gaurav ji, and good afternoon, everyone. Am I loud and clear? Hello? So I would like to reiterate that our record quarterly profitability in quarter one FY twenty seven marks a significant milestone in our growth journey. It reflects the successful execution of our strategy, continued operational excellence and our unwavering focus on creating long term value for all stakeholders.

12:47 Let me briefly walk you through our operational performance during the year. Tyre fishing operations remained resilient in Q1 FY twenty seven with capacity utilization at a healthy 88 in India and 78% in Oman. India recorded a strong 35% Y o Y growth in tire fishing volumes, while operations in Oman were temporarily impacted by the West Asia conflict, resulting in relatively subdued volumes. Sequential volumes for India moderated by 10% due to lower CAM requirement following softer consumer segment demand. Ingram River production remained stable with an increased shares allocated towards higher value products such as micronized rubber powder and reclaim rubber.

13:37 In quarter one FY twenty twenty seven, MRP and reclaim rubber volumes grew strongly by 2837% on Y o Y basis, supporting to robust performance of the Industrial segment. In Q1 FY twenty twenty seven, the Infrastructure and Industrial segments recorded volume growth of 3327%, respectively, while the Steel and Consumer segment witnessed a decline in volumes. The Industrial segment achieved a strong 58% Y o Y growth in revenue. Exports volume delivered robust 46% Y o Y growth despite global economic headwinds, supported by a healthy order pipeline. Rising raw material costs and increasing focus on ESG goals within the tire manufacturing industry continued to drive demand in the industrial segment.

14:31 The Infrastructure segment delivered 7% revenue growth in Q1 FY twenty twenty seven, supported by increased bituminous road surfacing activity. The West Asia conflict led to temporary bitumen supply shortages and elevated prices, creating a stronger demand for rubberized bitumen as a cost effective alternative for road infrastructure projects. While our bitumen emulsion business was impacted by supply constraints and subdued market demand, the long term outlook for rubberized bitumen remains robust, supported by government continued focus on reducing import dependence. The company also secured a 15,000 tonnes of rubberized bitumen processing order for execution in FY twenty twenty seven.

15:19 The consumer segment was impacted in quarter one due to a sharp increase in raw material prices following the West Asia conflict along with importexport disruption affecting the availability of key imported raw material to the turfing industry. The significant rise in binder and synthetic grass prices nearly threefold in some of the cases led to delay in tracks and testing project execution. This segment will bounce back once these scenarios stabilizes. Our steel segment delivered a stable performance during quarter one FY twenty twenty seven with revenue remaining steady despite a marginal decline in volumes, supported by improved realization following price corrections. We further strengthened our market presence by securing the exclusive distributorship for ZEBO Ka Metal Technology China for steel abrasive across India.

16:14 With customer transition underway from Q4 FY twenty twenty seven, we remain confident of achieving approximately 60% volume growth in our steel abrasive business during FY twenty twenty seven. Coming to financial performance, achieved record quarterly profitability with EBITDA exceeding INR30 crores, PAT surpassing INR20 crores, EBITDA margin above 21% and PAT margin above 13% on both at stand alone and console level. On a stand alone basis, quarter revenue increased by 18% and EBITDA in PAT margin expanded by six thirty eight bps and four seventy one bps on Y o Y basis, which is a further validation of our robust performance.

17:00 At the console level, revenue increased by 20% and EBITDA PAT margin improved significantly by five seventy five bps and four sixteen bps on Y o Y basis. Global Recycle Oman reported a PAT of 0.34 crores in Q1, marking a 31% increase over FY 2026. While profitability had been impacted in recent quarters by elevated raw material costs, the implementation of corrective measures, including raw material import into Oman, led to a meaningful improvement in profitability during the quarter. Bodla and Saudi Arabia reported have combined loss of around INR 53 lakhs owing to initial start up costs.

17:46 BP Build Tech delivered revenue of INR 19 crores and EBITDA of INR 3 crores in Q1, while it continued to scale its Construction Chemicals business through capacity expansion, execution of key projects and improved plant utilization. The inventory of accrued EPR credits up to 03/31/2026 was fully monetized within Q1 FY twenty twenty seven. Looking ahead, we remain confident in our growth trajectory with investment and capacity expansion, product diversification and international markets beginning to deliver results. Backed by a strong operational foundation, robust project pipeline and clear strategic direction, we are well positioned to sustain momentum and deliver all our Vision 2029.

18:34 I would now like to open the floor for question and answer. Thank you, and over to you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking your question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Biraj Ram from three sixty one Capital. Please proceed. Hi, sir. Congratulations for great set of numbers. Thank you for taking up my question. So first one is, you've spoken on increasing realizations due to this bitumen prices.

19:25 So how much of this increase in EBITDA margins has been factored in because of inventory gains? Do we see any inventory gains this quarter? Hi, Gaurav, Are Sivri you inquiring about if there was any contribution to margin because of gain in inventory relating to bitumen prices? Yeah. Not only in bitumen, but overall, is there any contribution of inventory gain across all segments? Very marginal. Nothing meaningful to to report back to you. Okay. So last last year, you've been guiding for around 18% EBITDA margin for the whole year, and that's your long term target. So do we see any normalization of this margin as we go ahead in 2Q and 3Q?

20:23 See, we have been achieving around 17% and guiding that our aim has been to achieve 18%. Of course, that has been surpassed and delivered in a we have delivered more than 20% EBITDA margin. A lot of that has to do with some optimization we have done in our raw material costs. We have spoken in the past about how we have increased optionality of feedstock to control our raw material prices better. That strategy has played out well. Also, going more towards value added product sales has been our focus. We have always mentioned that. That has played out quite well. So a lot of these changes are systemic in nature.

21:12 They are not one off. And I hope these margins are sustainable. There will be some increased costs down the road in a growing business like ours because there anything new you start, there are always the costs are front ended, like the project in Oman and sorry, not Oman, but in Saudi and also in South Africa, where we are right now incurring some cost per revenues and all have not yet started. So that is the nature of the business. Because of that, there will be some added cost booked. So when you blend that with the efficiencies, overall margins of 18% to 20% is what we believe can be delivered in a business like ours, and that is what has played out well in q one.

22:05 Got it. Sure. And last question is, sir, is it is it possible to share segmental working capital days? Segmental working capital days, I... We won't have ready to give you. We have... Our blended working capital days is 50, and that is, you know, fairly consistent actually for our business over the last two to three years. There's, I think, hardly 5% movement in this number, plus or minus. Okay. Okay. Yeah. Thank you. Thank you. Participants who wishes to ask a question may press star and one on the touch tone telephone. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Deepak Podar from Saphyr Capital.

23:00 Please proceed. Sir, am I audible, sir? Yes, Deepak. Please proceed. Yeah. Thank you very much for this opportunity. So just wanted to check, I mean, you had accrued EPR credits that you monetized this quarter. So so what's the quantum? Can you can you throw some light on that? 1 lakh. We have monetized around a 100,000 units and converted it to cash in this quarter. And what... I mean, one lakh units. I mean, at what price per unit? Around 25. We are... It is all trading at the floor price, which is around 2,500 rupees a unit. 2,500 unit... 2,500 rupees per unit. Rupes per unit.

23:48 So so we sold about what? One lakh unit you mentioned. Right? Yes. So around total 25 crores is what we got. Right? Yes. That's right. 25. So this 25 crores, I mean... So so so this 25 crores goes straight to your EBITDA. Right? No. We had accrued these already in previous years as and when our EPR credit start reflecting on the portal of the government, we accrue them and they sit as inventory. These have been monetized. That is what has happened. But in terms of p and l, the the accounting have been done as per per per per particular quarter? Yeah. The the... So the impact on P and L has already been taken in previous year. This is just an exercise of monetizing it this quarter.

24:39 Okay. Converting it to cash. Understood. And going forward, mean, how how many units per annum, I mean, we expect to generate for for this EPR thing? See, our our con... Revenue wise, I can tell you, and the contribution of, EPR basically comes at the PPT level for us. The... That number for us is approximately 25 to 30 crores annually, and this is a fairly stable number now for the last couple of years. So 25 to 30 crores per annum. Right? That's the contribution of EPR that we get at the PBT level on an annual That's correct. Okay. Understood. That would be it from my side. I wish you all the you. Thank you so much. Yeah. Thank you. Participants who wishes to ask a question may press star and one on your touch tone telephone.

25:32 Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Mihir from Equiris. Please proceed. Yeah. Hi. Thanks for taking my question. So so my question was basically around the global expansion piece also what we are doing, like, recently, we announced an investment in Chile as well. So just getting some sense here, like Saudi project is something where we have been investing in yet to start. And so just something like how is the thought process here and why Chile now? Like, first, why not, you know, increase our capacities in South Africa and Saudi and then move to some other geography?

26:18 See, there are many reasons which are understood, deliberated because of which we take a decision to enter a new geography, especially a new country. And, you know, those those details are confidential and I we will not share that on OpenPAD platform. However, what I can share with you is that we have reached a certain operational capability in The Middle East. And Oman being a small country, there was less scope of expansion and Saudi became a compelling proposition for us. It just makes a lot of sense because we already have a base there and the operational parameters are very similar to Oman.

27:11 And South Africa and Chile are both very interesting geographies from securing end of life tire supply and making our sourcing more robust and and protecting our business from any, you know, incidences or, you know, global events and things like that. It's a way of hedging our business. So this is why we are looking at these geographies. So, sir, going ahead, say, next... So bit of a longer term question, but, say, in two, three years, will we see a massive scale up in terms of investment there, or our target continues to be that 100 crore, two year kind of a CapEx? Our CapEx target, we have mentioned earlier as well, we are looking to spend around INR100 crores in FY27 and INR28 crores together.

28:07 In my opening remarks, I mentioned we've already spent In INR27 crores in regards to how much and to what extent will we be active in each geography, that's part of the core strategy of the company. What I can share with you is that these are all it's... You know, businesses outside India, they add a certain hedge, a certain robustness to our core business, which is India. Our focus... Our core investment will will remain India for the foreseeable future. Got Got it. Okay. And so broadly, circling back to the domestic piece of business, very strong set of numbers is what we have reported. But going ahead in terms of your growth trajectory and infrastructure and, you know, both the industrial and infra, how are we seeing the traction currently given the, you know, backdrop of the current West Asia situation?

29:04 Like you mentioned that we have got some benefits of, you know, moving to rubberized bitumen and all. But overall, on the intra segments front, we see some kind of a slowdown yet? Or are we seeing some kind of improvement on track in quarter two now? And we are also getting into a low base of last year's. I think your question is specifically about the impact of global events on the infra business. Yes. And, while, you know, there is... There has been some impact to the road construction activity in India because of the disruption of supply of bitumen, for example, our country is dependent in perpetuity to imported bitumen for our works. We don't produce enough and we simply cannot produce enough.

29:52 So while that did impact us in some localized way in some projects, but at the same time, we saw increased awareness amongst contractors for use of rubberized asphalt to to make, you know, higher quality roads and use less bitumen in their projects. So overall, I believe that this disruption has only benefited our business. Yeah. Okay. Okay. And, sir, in terms of industrial, the growth was mainly driven by, say, MRT, or we've added some onboarded, some new client as well, which is, like, to this kind... You know, we have reached around $45.46 crores in the quarter. So is it some customer addition as well or it is, the new MRP or something like that?

30:38 We are we are adding customers all the time. We are also increasing our our production of MRP, which has also happened in Q1. So it's a combination of factors. We our exports have grown 46% in Q1 year on year. So these are all contributing factors to the results that we have, come... That we have shown. Okay. So so just finally, last question here. So we have been increasing the MRP capacities and, you know, across space, we have been increasing the capacity and seeing our margin profiles as well have been quite lucrative. So that's one thing what I wanted to understand here is that what makes it difficult for the competition to enter the similar segment or a new player to enter the similar segment what we are in, just seeing that the margin profile of the business.

31:29 See, there is multiple things. Nothing is, to be honest, that difficult. Everyone puts their mind to it. I mean, in 2015, 2016, when we started MRP from scratch, our sales were not even 100 tonnes a month. And now our capacity is going to be 20,000 tonnes per annum. But there is a lot of learning, there is technology efficiency, which I believe we are excelling in. There is, you know, a lot of effort and convincing needed for onboarding customers. It's a fairly long process where I believe we just seem to be more resilient than than our competition and more committed.

32:15 And this is, you know, this is what has brought us results. Got it. Got it. Okay, sir. Thanks. Thank you. Thank you. The next question is from the line of Kushal from Asian Broking. Please please proceed. Hello? Yes. So my question is regarding other expenses. It has increased by around 5.4 crores from previous quarter, March 2026. Like, what component has increased? So I just wanted to know that. I think we will need a little bit of time to to give you that detail.

33:04 If you send us an email, we can we can reply you better. But our other expenses, you know, may have increased because of, you know, our, you know, expansion of businesses outside India. And I think, once again, our CFO may have little more clarity to give. See, our other expenses table, as I see it, it was it was 29.85 crores in in q four, and now it is 30.58. Yeah. That's comparison to previous quarter.

33:53 Does that give you clarity or no? No, sir. 29 crores was in which quarter? Previous quarter. Q four. Okay. Okay. Your order is showing twenty seven point one nine quarters... One nine crores in previous quarter.. We'll make it. We'll make it. Okay. Thanks. Thank you. The next question is from the line of Arshurat Seth from Venture Securities.

34:39 Please proceed. Yeah. Good afternoon, sir. Congratulation on wonderful set of figures, sir. There would be two questions from my side. So firstly, on the 100 crores that were outlined as CapEx over next two fiscal, how much that of... Would be capitalized over FY '27, and how much of that would be capitalized over FY '28? Can you give a breakdown of that? And I'll ask my second question later. Yeah. Hi. This is Jop here. Out of 100, we would be capitalizing around 60 crores during FY twenty seven. Okay.

35:24 And secondly, sir, what is the targeted blended utilization I'll looking at once all the plants are operation across India, Oman, and South Africa, and these plants are operational and scaled up. What is the blended utilization I'll looking at at the closing of this fiscal? So... Hi. Subodh here. So on the capacity to, like, utilization, you're asking? Yes, sir. Yeah. So currently, also, we are, you know, we're utilizing our capacity for tire recycling close to 88% in the India alone. And... But the value added product like MRP and Reclaim Rubber, we are growing. So capacity utilization on PCMB business side, that will reach somewhere around around how much? 60% this year. Mhmm. And we'll continue to over 10% to our revenue of this site. So combining everything together, we feel we should be somewhere around 75 to 80% capacity utilization.

36:27 So... And and that will be across all geographies? Yeah. Yes. Okay. Okay. Fair enough, sir. Thank you for answering my question. Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. Participants who wishes to ask a question may press star and 1 at this time. The next question is from the line of Navani Niradeep from Niradeep Investment. Please proceed. Hello? Hello? Audible? Please proceed. Yes, ma'am. Yes, ma'am.

37:12 Please proceed. Okay. Thanks for the opportunity. So I've got few questions. So my... Basically, first question is, like, where is the EPI monetization is being booked? What do you mean by where is it being booked? I mean, is is it in other income or is it in industrial segment? Where have you booked the revenue? No. No. Because you Yeah. You you told us about Hi. This is. Actually, monetization of APR has been knocked off against the unbilled revenue. Okay. Okay. Got it. So... And my second question is, as we are facing the bitumen shortage in infrastructure segment, and also there will be a delayed monsoon, so I feel like q two will be highly impacted, especially the infrastructure segment will be highly impacted due to this.

38:11 And, also, this month... This quarter, we have just addressed 20 top line growth. And in order to meet your goal, like, to... For the for the full year, 25% top line growth, Like, how will you be able to address it? If you can just clear out this. So... Hi. This is Subodh here. So on the infrastructure segment, like, in fact, we have, you know, seen even in the quarter one, despite of all these challenges, what has come up due to this West Asia conflict. But the overall infrastructure segment has grown by almost 7%, and that is majorly because of the cost where bitumen itself is, you know, short in supply and very, very expensive. So in that case, the rubberized bitumen came as a boon, and people have, you know, started using more of rubberized bitumen because it was the only inexpensive proposition available to them. So that's the reason, you know, that business has grown. And in fact, historically, also, if you see the quarter one is the peak season for executing the road work.

39:18 So no... None of the contractor want to hold the job, and they continue to work using the modified bitumen to make the base because otherwise, quarter two, historically, because of monsoon is weak. So right now, we can see when the monsoon is also not that, you know, penetrating that well. So we feel, I mean, you know, going forward, the demand will be maintained the way it was, you know, executed in the previous quarter. And let me just add to support a comment. This is Gaurav. In regards to how will we meet this year's target with these current situations. I had clarified in my opening remarks that the revenues from the expansion and setting up of the TPU and the RCP plant have yet to come in. These will start coming in from Q2 and steadily increase in Q3 when the RCP production also starts.

40:13 Our PCMB business is in a ramp up stage and that is very visible. What we have done over the last two, three years is we have built these many businesses within our business to counter any kind of cyclical issues or geopolitical issues, and that is what is giving our business the robustness compared to some of our competition. Got it. But then as you are saying that the South Africa plant and everything, so, like, it will take time because there there are geopolitical issues again which are going on. So, like, if if the geopolitical situation doesn't soften, then what will we do? Like, will we be able to achieve the target? Because everything is dependent upon your political scenario. So how are you planning to mitigate those risks?

41:15 Ma'am, we we have already taken steps to mitigate as best to our ability. Now if, there are certain things which are beyond anyone's control and the comment you made, I agree with it. If things, become so bad globally that, you know, shipping stops and, you know, power outages happen and other kind of things happen, then then, certainly, what what you say is right. Everyone will be impacted including us. Yeah. So... Oh, okay. So I just hope that it works out and everything works out in favor since I have been following this company for so long. And so I just have one or two last questions. So, like, it's regarding the consumer segment.

42:02 So it it has been down by 20% in volume. So, like like, how... What is the concrete recovery timeline for the consumer segment? And Sorry. Didn't plan to hedge raw material cost? Like, is there any way we can do that? Let me... Gaurav here, I'm... Then Subodh can add to what I'm going to say. Our hedge itself is that we are not dependent on consumer business alone. Our consumer business is about 10% of our total business. So 8% to 10%. So that's point Our number hedge comes from the fact that we cater to consumer business, industrials business, intra business, steel, now PCMB, and also TPU and RCB.

42:47 That is our hedge. Right. Right. Right. I get it. Okay. So, like, going forward, con And in fact, in the consumer segment also, the price is not with the product. The price issue is with the binder, what the contractor used during the terfing application, which is beyond my control. But this business is as it is intact as and when the things will improve, I mean, the market is there, but demand is there. Got it. And will we be able to meet the question? Ma'am. Okay. May we request you to join the question queue again for your follow-up questions? No problem. Thank you. Thank you so much. Wish you all the best for future. Thank you. The next question is from the line of Viraj from MoneyGrow.

43:34 Please proceed. Hi, Gaurav. Congratulations on the good results. Sorry. I wanted clarity around this EPR accounting. So it was mentioned it was adjusted against non billed revenue. So does... I I think... Can you elaborate please a little further on that? And I want to know if the 21 crores of PAT for the quarter is excluding any EPR impact or including? No. Hi. This is Abhay. I'm answering your first question. Actually, whatever the EPR has been monetized during q one, that have been knocked off against the unbilled revenue booked in FY 2526. Okay? This is clear? Hope this is clear to you. No. Not clear. I I don't know.

44:23 So does $1.56 crores include or excluded EPR in your revenue line item? It is. Viraj, you are... The Gaurav here, you are mixing the monetization of Yes. EPR credits that we have accrued from previous year, but monetization has happened in q one with the financial performance of q one. These are two different things. So is the one fifty six crore revenue and 21 crore PAT excluding any monetization of EPR? So the INR156 crore revenue has some accrued EPR income, but that is relating to only Q1. Understood. And this INR21 crores is related to the EPR credits of previous financial year. I hope you are clear now.

45:13 Okay. Got it. And out of the 21 crores, if I... If one were to exclude the EPR of the previous financial year, what would the clean operating profit be after taxes? You cannot mix previous year's accrued EPR credits monetization of INR 21 crores to the current year's P and L. These are two different things. That's what I've clarified to you. Right. So it's very hard to extrapolate what this INR 21 crores means for the year. Right? Because if INR 5 crores out of that is EPR and you've done it for the entire prior year, then it's very hard to tell INR 21 crores this 21 crores, Viraj, has nothing to do with the profitability of current financial year. Does that answer your question?

46:00 Yes. It does. Thank you. Yeah. Okay. Thank you. The next question is from the line of Nikunj Banushali from Walford PMS. Please proceed. Hello. Hi. Congratulations on a good set of numbers, and also good to see that the... You responded on the margins that they are now structurally. They will be between 18 to 20%. I had two queries. One thing is on... Obviously, at the India level, on the main business, we have already reached 80, 85% capacity, so which means that the demand is quite piped in. So how do we know... Kind of increase the current capacity and as the capacity are we looking to know, enhancing this capacity further in India itself, first of all?

46:51 Yes. Thank you for your question. We are working on working on exactly what you have just highlighted. Our demand is, you know, very robust for our products. We are looking how to first debottleneck and increase capacity, but also exploring options of possibly a new greenfield plant and other ways of enhancing capacity. These are the that is in the works. Okay. And secondly, as as we we are enhancing capacities across the globe, and once we have our pyrolysis, our, you RCB and all the capacities in place, So... And we said that we'll be utilizing... We'll be at the capacity utilization of around about 80, 85%.

47:38 So at that peak, what would be our revenue? So that would be close to thousand crores, or we are still away from the thousand crores that another CapEx will be required? Sir, we are we are targeting revenue of INR1000 by FY twenty nine for that. We have already indicated about INR100 crore of CapEx during this and the next financial year. It is also likely that we may increase the CapEx, you know, if the demand continues to be so strong, we would certainly not forego that opportunity. But as per the current plan that we have and the vision we have, it is to reach INR 1,000 crores by FY twenty nine. Perfect. And lastly, if you can permit me. So you have mentioned that, no? Obviously, the bitumen prices have increased, that's why the demand for this modified bitumen has increased.

48:30 So firstly, are we expecting that this demand continues? Secondly, is there any, you directive from the government wherein, you know, that certain percentage should be, you know, mandatorily incorporated as part of the infrastructure lane? So... Hi, sir. This is Subod here. So on, you know, on your query, like, you know, modified bitumen or rubberized bitumen is a reality. There is a continuous demand for the product. It depends its offtake basis on the progress of the projects on the ground. So in the quarter one, basically due to the shortage of bitumen, contractor preferred to execute the work where the modified bitumen was, you know, available to them and, you know, they can, overcome with the bitumen shortage by using more of rubberized bitumen.

49:17 In the long run, yes, demand will remain like this only, and government initiative towards reducing the dependence will further help to build the demand for, you know, the Verizon to be delivered in the country. Okay. Great, sir. And all the best to the entire team. Thank you so much. Thank you so much, sir. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. Participants who wishes to ask a question may press star and 1 at this time. The next question is from the line of. Please proceed.

50:04 Hello. Yes, please. So, sir, I just have one question. So if you can provide, sir, guidance for FY twenty seven for top line and for EBITDA margin as in q one, we have posted 22% EBITDA margin. So what will be the guidance for the whole year, Yes. So I I think, we have reiterated, Europe, the guidelines for this current financial year is somewhere around INR $6.70 to INR 700 odd crores on the top line side. Though we wish to, you know, maintain these kind of margin profile, what we have achieved in the q one, but to stabilize somewhere 18 plus to 20 in between, as you know, we feel is achievable.

50:52 Got it. Got it, sir. Thank you, sir. Thank you. Participants who wishes to ask a question may press star and one at this time. The next question is from the line of Amit Rathi from CSGR West Capital. Please proceed. Yeah. Hi. Am I audible? Hello? Yes. Yes. Please go ahead. Please go ahead. Yeah. Hi. So, my question is on the margins actually. So, kind of, depending upon, which quarter do I look at or maybe last financial year, the margins have jumped up by 400 basis points to 500 basis points. So, can you give, can you decompose or give me a breakdown of, where is this incremental margin contribution come from actually?

51:46 Because you did say that okay, inventory might have played a marginal role and not a major role. But say for example, if I see the material to material plus inventory cost ratio, see, then I compare it with sales on an average that is for various quarters as well as for FY twenty six, that has been greater than 51%. But this quarter, it is 46% material plus inventory cost to sales ratio. So I was under the assumption that, okay, maybe a decent contribution has come from this side. So if not, then as I said, could you just give me a breakdown of this 400 to 500, basis points increment margin? Where does it come from? Hi, Gaurav here. The The main contribution has come at gross margin level.

52:31 That gross margin expansion has happened by a combination of both more efficient raw material costs as well as higher realization due to value added products. Okay. And... But we won't be able to put a number to it. Right? Or can we? See, our overall margin at EBITDA level has expanded by about 4%. Right. So a a very large contribution of this has come at the gross margin level Okay. Because our... Yeah. And some on account of efficiencies because of, you know, scale. Sure. Yeah. Okay. That was my only question.

53:16 Thanks very much. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of. Please proceed. Yeah. Thank you for the opportunity. So my question is on EPI credits. So you have mentioned that ETR credits revenue recognition, this twenty one crore revenue recognition is already happened in q one, q two, q three, q four, f y twenty six. It's on a accrual basis accounting. Is my understanding correct? Correct. Absolutely correct, sir. And this q one f y twenty seven, we monetize this EPR credit, so we receive the cash.

54:02 21 gross. Correct? Correct. So my question is, so in FY '26, we... And you said that the EPR credit is... It it is basically all done on PBT level. So in FY '26, we have done a PBT of 72 crores. If I minus this EPR credit of 21 crore, we remain with around around 51 crore. So we are actually... We have actually degrewed our PBT on f '25 or 26 basis y o y. So... And and if I see our current PBT level, which we have done in q one is 28 crore, taking 5 crore quarterly on a PBT level, so it comes around 23 crore at a PBT level.

54:58 So we have actually not grown this quarter. Is my understanding correct? Your numbers are are correct, sir, but e... EPR earnings and income is now an integral part of our business. Now whether you consider it to be separate and wish to account for it separate, that's your choice. But EPR earnings and the credit is an integral part of any recycling business. Okay. So... And, EPR is accounting happen on PBT level. It doesn't come in EBITDA. Right? You said that. It comes at TBT level, so it translates and drops down to EBITDA level.

55:48 Okay. Sure. I'll follow-up. I will take on the key with you in email. Okay? Sure. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of, an investor. Please proceed. So thank you for providing me the opportunity. I just wanted to check with you on the guidance which you gave for FY '27. Did I hear it correctly, sir? Is it $6.70 to 700 crores for FY '27? Yeah. That's correct, sir. And sir, one more thing which I wanted to ask you is, since we have done an EBITDA margin of 22% in the current quarter, I mean, in the last quarter, And we have guided for 18% to 20% EBITDA margin.

56:43 So shall I consider that there will be a drop in the EBITDA margins going forward? Sir, Gaurav here. We have achieved 22% in Q1. That is a reality. But when we are asked by the investor community, you know, on some guidance and estimates, etcetera, you know, we like to consider all factors like ongoing new expansions, some new additions to our costs because of expansion of business. All the costs are always front ended. They can have some impact. So we prefer to be a little cautious, and therefore, the guidance that we would like to give you is 18 to 20%. Just like previous year, we've been giving guidance of around 18% as our aspiration, and we were achieving about 17%.

57:35 And this quarter, we have delivered 22%. Now that's the reality. Now you can please interpret it as you please, but I will neither confirm that we will achieve 18% nor will I confirm we will achieve 22%. So how shall I interpret it, sir? Since this is a guidance from your end, sir. I think you go by the history, by what we have guided, what we have delivered. I think that is the best way to see numbers. We can we are standing by our guidance that we are on target to revenues of between INR $6.75 crores to INR 700 crores.

58:21 We are standing at 22% EBITDA margins, but our guidance for the year, as given previous year, remains to be 18% plus. Okay, sir. And one more thing, Vijay, I wanted to ask you, sir. How much will RCB and TPO contribute to overall revenue in FY twenty seven? Approximately, about 7% to 10% of total revenue will come from the Pyrolysis, the TPO, RCD business, sir. So $50.60 crores in absolute numbers. Right? That's correct, sir. Okay, sir. Thanks a lot. Thank you.

59:09 Thank you. Due to time constraint, I would now like to hand the conference over to the management for the closing comments. Hi. Is anyone from Go India on the call? Moderator, am I audible? Yes, sir. Tinna, ma'am, your line has been unmuted. It's okay. I think we can proceed to... You know, we would like to sincerely appreciate the participation of everyone on this conference call and trust we have effectively addressed all your queries. If you have any further question or information, please feel free to contact our investor relations team at Go India Advisors.

59:56 Thank you everyone once again, and thank you moderator for arranging the call today. Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.