Q1 2027 Pyramid Technoplast Ltd Earnings Call Transcript
Key Points
- EBITDA per ton improved significantly to approximately Rs 16,380 in Q1 FY27, up from Rs 11,252 in Q1 FY26, demonstrating resilient unit economics and improved operating efficiency.
- Strategic expansion into Western India with a new facility in Kutch (10,000 IBC units per month capacity) is on track for commissioning by March 2027, which is expected to lower freight costs and improve customer service.
- Received government subsidy approvals totaling approximately Rs 35.4 crore (Rs 24.9 crore for Vada and Rs 10.5 crore for Bharuch), which will reduce investment costs and improve long-term project economics, ROCE, and payback.
- The Wada facility is ramping up well, operating above 70% utilization and contributing Rs 43 crore (19% of revenue) in Q1 FY27, with expectations to reach 80% utilization during the year.
- Green energy initiatives are gaining traction, with solar plants delivering Rs 2 crore in savings in Q1 FY27 and a full 14.25 MW capacity expected to generate around Rs 50 crore in annual savings, alongside ESG benefits.
- The recycling plant, with an annual capacity of 5,000 metric tons, processed 150 metric tons in Q1 FY27 and generated Rs 25 lakh in EBITDA, with FY27 contribution estimated at Rs 2 crore, making Pyramid Technoplast Ltd (NSE:PYRAMID) one of the few Indian companies with both solar and recycling operations.
- Revenue grew 36% year-on-year to Rs 222 crore, and EBITDA grew 50% year-on-year with margins at 10%, reflecting strong operating leverage despite new plant commissioning.
- Management maintains a disciplined capital allocation approach with FY27 CapEx planned at Rs 20-25 crore, focused on expansion and deployed in line with actual requirements.
- Capacity utilization was only 62% in Q1 FY27, impacted by a slowdown in exports of various products, which management attributes to near-term demand disruption rather than structural issues.
- Export demand suffered due to geopolitical tensions (war), leading to a 4% year-on-year decline in volumes.
- Gross margin compressed slightly to 23% as raw material costs rose in step with price increases, despite gross profit rising 19% year-on-year.
- Financial costs surged 179% year-on-year and depreciation increased 61% year-on-year due to capacity expansion, which weighed on PAT growth despite strong operational performance.
- The company has not yet recognized certain benefits (likely related to subsidies or solar savings) in Q1 FY27, with management indicating clarity will come later in the year, potentially delaying expected financial improvements.
- The recycling plant's current contribution is minimal (Rs 25 lakh EBITDA in Q1), and its full-year impact of Rs 2 crore is relatively small compared to overall revenue, indicating it is still in early stages.
- The company faces execution risks related to the new Kutch facility, with machinery orders yet to be placed and commissioning expected only by March 2027.
So hi, everyone, and very good evening to all. I welcome you all to Pyramid Technoplast Q1 FY27 con call. Please note that 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 Mr. Vijay Kumar Agarwal, the Managing Director and Mr. Jay Prakash Agarwal, CFO and Hold-time Director. I now request the management to just proceed with the opening remarks and for that, we'll open the floor for Q&A. Thank you and over to you, sir.
Thank you, Soumya. A very good evening everyone and welcome everyone and thanks for joining us for our Q1 2027 earning call. So we have started FY27 with a strong and structurally healthier operating platform. So today we have an installed capacity of 20,936 metric tons per quarter, while volumes stood at 1,292 metric tons, translating into a capacity utilization of around 62%. While volumes in the quarter were really
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