Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Kanpur Plastipack Ltd (NSE: KANPRPLA) Q4 2026 Earnings Call dated May. 04, 2026
Corporate Participants:
Manoj Agarwal — Chairman Cum Managing Director
Shashank Agarwal — Deputy Managing Director
Analysts:
Disha — Analyst
Rohan Mehta — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and full year FY26 earnings conference call of Kanpur Plastic Pack Limited. Today we have with us Mr. Manoj Agarwal, Chairman cum Managing Director and Mr. Shashank Agarwal, Deputy Managing Director. We will begin with the opening remarks from the management followed by interactive Q and A session. Please note that this discussion may include certain forward looking statements which should be viewed in conjunction with the risks and uncertainties that the company faces.
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. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manicha Garwan, chairman cum Managing Director for his opening remarks. Thank you and over to Mr. Agarwal.
Manoj Agarwal — Chairman Cum Managing Director
Good morning everyone and welcome to Kanpur Tasty Pack’s earnings call for the fourth quarter and the full year ended 31st March 26th. Thank you for joining us and for your continued engagement with the company. Financial year 26 has been a year of transition and consolidation for Kanpur Taskipack. While the year reflects steady progress, a larger focus has been on building a stronger, more resilient and a feature ready business model rather than short term outcomes. Over the past year our focus has been on moving beyond a purely volume driven model towards a more balanced mix of scale and specialization.
We have continued to strengthen our presence in core industry packaging while gradually building capabilities in value added segments such as premium polypropylene yarns and non woven fabrics. This shift while still evolving is important from a long term perspective as it improves both margin visibility and earning quality. Fibership continues to remain the foundation of our business. The strength of this segment lies not just in scale but in the depth of long standing relationships we have built with global customers over decades.
These relationships provide stability, repeat business and ability to grow sustainably over time. At the same time we are expanding into non women technicals as a strategic growth revenue during the year. This move is aligned with evolving demand across sectors such as automotive interiors, geotextiles, artificial leather carpets and footwear. Supported by India’s rising GDP and increasing penetration of end use industries. Our entry into this space also opens up opportunities in select B2C linked applications over time which can further diversify our business model and create new growth drivers.
At the same time, we have taken steps to strengthen the structural foundations of the business. Our investments in capacity, infrastructure and capabilities are being made with a long term perspective with a clear emphasis on consistency, discipline and scalable growth. A key pillar of the journey is our approach towards partnerships. Our joint venture is aimed at bringing together global technology, expertise and brand strength allowing us to leverage India as a high growth market. This not only enhances our product capabilities but also accelerates our movement towards higher value segments.
In parallel, we are placing strong emphasis on building a more organized and future ready manufacturing ecosystem with a focus on safety, process standardization and increasing automation. These are critical to improving efficiency, ensuring consistency and supporting long term scale. The operating environment during the latter part of the year also saw some volatility, particularly in raw material prices driven by geopolitical developments including the Iran conflict. This led to fluctuations in input costs and pricing dynamics across the value chain.
This created some short term margin movements. It also reinforced the importance of pricing discipline and operation agility areas where we continue to remain focused. Despite these dynamics, our core business remains stable supported by a diversified export presence and long standing customer relationships. We continue to see consistent demand across key geographies and our position in regulated markets provides a certain degree of resilience in an otherwise evolving global environment. Overall, financial year 26 reflects a year of strong strategic and disciplined progress where we are strengthened both the strategic direction and the structural foundation of the business.
The transition towards a more diversified and value added portfolio during the next year will continue but the direction remains clear. With this, I would now like to invite our deputy managing director Mr. Sushang Agarwal to take you through the operational and strategic developments in greater detail.
Shashank Agarwal — Deputy Managing Director
Thank you and good morning everyone. Building on what our chairman highlighted, FY26 has been a year defined by discipline, consistency and steady execution across the business. Our approach has been clear to grow in a calibrated manner while improving the quality of the business. This means focusing just not on volumes but on a better product mix, stronger customer engagement and sustainable realizations. Before I move into operation highlights let me briefly take you through the financial performance for the quarter and the full year.
This is also to just inform you that the previous year figures have been represented pursuant to compliance with the Indas 105 to present discontinued operations separately. This reclassification is a presentation change only and has no impact on profit or loss for total comprehensive income for Q4 FY26. At the standalone level, the company reported a total income of 183.1 crores reflecting a growth of approximately 6.16%. Year on year. EBITDA for the quarter stood at 25.06 crores with a margin of 13.69% PBT at 19.46 crores while PAT at 14.53 crores registering of growth of around 14%.
Year on year EPS for the quarter stood at 6.04. During Q4FY26 the manufacturing segment revenue stood at 143.62 crores. This quarter was impacted by a reversal of DFIA income amounting to 3.65 crores which led to negative other operating income of 2.9 crores. This reversal was triggered by government’s decision to suspend import duty on key petrochemical chemical products including property till 30 June as a temporary measure in response to the Iran conflict resulting in supply chain disruptions and to control inflation.
For the full year FY26 the total income stood at 726.67 crores representing a growth of 26.26%. Year on year EBITDA increased to 74.75 crores with margins improving to 10.29%. The pact stood at 38.19 crores reflecting a growth of approximately 58%. This was driven by improved realizations, operating leverage and high contribution from value added products. On the debt side, the NET debt on 31st March 26th stood at 112 crores, the breakup of which is 78 crores in short term borrowing, 23.8 crores of GECL loans and 9.01 of long term loans.
During this year the operating environment remained challenging. We witnessed disruptions in key markets including tariff related uncertainties in the US followed by significant volatility in raw material availability and pricing towards the later part of the year due to the geopolitical developments. Despite these challenges we have been able to navigate the environment effectively supported by our long term standing relationships with both suppliers and customers. These partnerships have played a critical and pivotal role in ensuring continuity and stability during these uncertain periods.
Exports continue to remain central to our business model and a key driver of both scale and quality. During the year we maintained a well diversified geographical presence, Europe accounting for 56.5% of our exports followed by South America 21.8% and North America at 16.9%. The other regions contributed the balance diversification helps us manage regional demand cycles, geopolitical risks and ensures consistent capacity utilization. A key strength of our business is is the depth of our customer relationships while a significant portion of our revenues coming from our repeat clients, many of whom have been associated with us for over 20 years.
This provides strong visibility and stability while also enabling us to expand into higher value added products with existing accounts. From an end user perspective, our revenues are well diversified across sectors such as food and agriculture of 52%, industrial packaging 23%, construction 12%, automotive 7% and mining and building materials 6%. Balance exposure reduces concentration risk and supports resilience across demand cycles. From a product standpoint, FIBC continues to remain the core of our business and a key growth engine in both value and volume terms.
At the same time, we are seeing increased traction in premium polypropylene yarns, special fabric solutions and other better realizations and improve margin visibility. Transition towards value added products remains a key strategic priority for us. We have also taken meaningful steps towards diversification through our entry into technical textiles non woven using the needle punch technology. This will open opportunities across segments such as automotive interiors, geotextiles, artificial leathers, carpets and footwear industry.
It expands our addressable market over time. We shall commence commercial production by September. Due to the ongoing war situation, the industry witnessed significant volatility in raw material prices, particularly in polypropylene. Prices increased sharply from $1,000 per ton to approximately $1,700 per ton. This is almost a 65% increase driven by supply disruptions, reduced petrochemical availability and logistical constraints from the Middle East. This was further impacted by the need of prioritization of LPG production which affected polymer production and supply.
In this environment, our approach has been to remain disciplined and risk aligned. We follow a model of procuring raw material largely against confirmed borders which help us to manage price risk effectively and protect margins. Additionally, during periods of volatility, we have prioritized margin attractive segments within our portfolio, ensuring that profitability remains protected despite external pressures. Long term partnerships and relationships play a key during such times. While these factors have led to some moderation in short term demand, particularly as customers adjust their inventory levels, underlying demand and consumption absolutely remains intact.
This is especially true for essential segments such as food and agriculture which continues to provide stability to the business owing to the largest portion of its revenue. From an operational perspective, the focus during the year has been on preparing the business for scale. As I have repeatedly mentioned, the existing capacity of FIBC is 18,000 tons per annum which we are utilizing 85% the FIDC expansion project at unit 3 is progress as per plan, of which the building will be complete by May 26th.
By end of this year we should be able to produce about 1800 tons of the targeted capacity of which 6000 tonnes will be reached over the next four years. This will support the future growth in parallel warehouse expansion and automation. Initiatives aimed at improving efficiency, precision and working capital discipline are underway, expected to be completing by September. On the strategic front, we have strengthened our global presence through the acquisition of valid sensors in the uk. Our joint venture with ASIGOMA continue to provide support and technology roadmap and high performance yarns initiatives are aligned with objectives of moving towards specialized higher value added applications.
In terms of demand visibility, we have seen some moderation in order cycles with lead times reducing from six to eight weeks to three to four weeks now, reflecting both raw material volatility and cautious customer procurement. However, we remain focused on maintaining supply reliability and strengthening long term customer relationships. This is also partly due to inventory correction in the supply chain which could potentially lead to a demand uptick and a rebound in ordering once the price stabilizes.
Overall, FY26 reflects a year of disciplined execution and consistent progress where we have strengthened both our operating model and strategic positioning. As we move forward, our focus remains on improving product mix, scaling value added segments and maintaining consistency in execution. Thank you. We can now begin both the question and answer session.
Questions and Answers:
Operator
Thank you very much. We now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on the test on telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue ascends. Participants, you may press Star and one to ask the question. The first question is from the line of Disha from Sapphire Capital Partners.
Please go ahead.
Disha
Hello. Am I audible, sir?
Operator
Yes,
Disha
Yes. Thank you so much for this opportunity and congratulations for a solid margin performance given the raw material volatility. So, a couple of questions from my side. This. You mentioned that we reach 85 utilization for the FIBC capacity and this new capacity that is planned, this is start. The construction will be completed in May. Right. So by when will we expect these commercial production to begin? And what sort of contribution do we see from this new division going ahead?
Shashank Agarwal
Yes. So the 18,000 tons capacity and the 85% capacity utilization is at unit 2. This is coming at unit 3. It is aimed at 6,000 tons in the interim period the construction was going on. We already started its operations in the factory building where the CPP was there. And we just reached our target for year one in the month of March where we produce 100 tons in the month of March. That is at a run rate of 1200 tons. By end of 2627 we should be at a run rate of 2400 tons. Because I had mentioned previously that over the next five years we will go from 1200 to 2400 to 3600 to 4800 to 6000 tons.
So in this year we should expect about 1800 tons and we should end the year with a run rate of 2400 tons.
Disha
And this 6000 metrics done. What will be the peak revenue potential at peak capacity?
Shashank Agarwal
So 606,000 tons should be about 130 crores. The incremental revenue would be about 40 crores because this would be fabric capacity getting converted to FIBC capacity. So the fabric would get reduced and FIBC would increase the margins. EBITDA margins would also increase because of this.
Disha
Okay, okay. And so this non women facility that will come in September, what sort of revenue contribution we have from this in FY27 and what are the margins do we see here?
Shashank Agarwal
So we should expect about 20 to 25 crores revenue only because the first machine would get commissioned by September and the next one by December. So we will only see partial revenue this year 27:28 we should be looking at a revenue of between 100, 220 crores depending on the raw material and the capacity utilization. On a revenue of 100220 crores, we should look at an EBITDA of 15 to 16%.
Operator
Disha, can you hear us?
Disha
Is it audible now?
Operator
Yes.
Disha
Yeah, just on the overall, how do you see FY27 panning out in terms of growth and in terms of margins, how sustainable do you think is this 11% sort of clip that we achieved in Q4?
Shashank Agarwal
I think the margins will sustain the year does not look bad because overall the global economy is in a good shape. It is highly consumption driven. Unlike the disruption during COVID where there was a dip in the consumption, this disruption has not caused a dip, rather a boost in consumption. So overall from a global manufacturing perspective, it is a good time to be in. We do not see any lead measures reflecting any kind of slowdown. At the moment there is a temporary slowdown which is because of inventory correction.
But that always results in a rebound. Margins should remain under the similar water it has been. There should be a Revenue increase because of the non movements because of SA can and other measures that are being taken.
Disha
This 11% sort of you wish to sustain, right?
Shashank Agarwal
Yeah, yes.
Disha
And any sort of number on the growth that you like to put the revenue growth.
Shashank Agarwal
It should. We should be able to offer steady growth. I mean I’m not in a position to give exact numbers, but we should look at about 10 to 15% growth.
Disha
Okay, I join magnitude. Thank you so much and all the best.
Operator
Thank you. Participants email press RN1 to ask a question. Next question is from the line of Rohan Mehta and division investor. Please go ahead.
Rohan Mehta
Hello. Hi. Good morning sir and thank you for the opportunity. So if you could just touch upon the geopolitical tensions and the conflicts that are going on, particularly in the Middle east, the impact of that on our overall business and raw material sourcing, if it’s affected and how long you see the impact on our supply chains and logistics.
Shashank Agarwal
So I would like to answer it in three different manners. Short term, medium term and long term. So there is a long term structural change that will happen because of this tension where each and individual country will start to operate on its own rather than as a group. This will result in the supply being more competitive. That is the long term effect. On the medium term angle, the prices will remain high. That is given because there is certain capacity that has become defunct and it will not come online in the next three years.
So because of shortage of gas and oil and problems on the shipping routes, the prices will remain high. So we should. We will not look at thousand dollars in this year touching again. So the new normal could be anywhere between $1200 and $1350 for us as our raw material in the short term. The government of India, the kind of proactive steps that they have taken, we have not seen such kind of agility in a long time by the government. This has resulted neither in any consumer disruption or in business disruption of any major kind.
It could have been worse, but it was very well controlled. There was momentary, very high prices. But now the prices are almost back on track. And in terms of international comparison, we are almost 30% cheaper than Europe at the moment and about 10% more expensive than Far East. But all these differences will narrow down, I would say by June or July.
Operator
Okay. Okay. So we are passing on this price impact on to the customers also, is that correct?
Shashank Agarwal
Yes, mostly, yes.
Operator
Okay. Okay. All right. So any guidance that you might be able to give on the entire year and FY27 in terms of top line and profit margins.
Shashank Agarwal
As I said, the Margins would remain similar and we should expect about a 10% increase in the top line.
Operator
Okay
Rohan Mehta
Sir, that was all for them for the time being and thank you and all the best.
Shashank Agarwal
Thank you.
Operator
Thank you. Next question is from the line of Mahesh Kumar from MU Investments. Please go ahead.
Rohan Mehta
Hello. Thank you for the opportunity sir. Just had two questions. One on the other income
Operator
That we have that, that has, you know this year jumped quite a lot. So this income I think we are getting from trading income mostly. So any impact on the margins from you know the other income that we have and how sustainable is the margin because of that?
Shashank Agarwal
So other income comprises of two heads. One is the forex earnings and the other is the trading income. And so sorry. So there is interest income from the trading division and forex income. So because of the volatility that has been there in the foreign exchange as well, this was there how it will be in the next year, it is hard to comment.
Rohan Mehta
Okay, and one more question on the B2C business. So we have recently ventured into it. What is the margin profile that we are seeing in this business and how, how going forward margins will look like?
Shashank Agarwal
So yes, B2C has a much higher margin and also a higher long lifetime value of a customer. We are also able to solve an address problems of the customer in a much better manner. So there will be focus on incremental FIBC capacity addition that will be servicing this B2C market. And yes, the margins there are much better.
Operator
Sure.
Rohan Mehta
Thank you so much for the opportunity. I wish you all the best. Thank you.
Operator
Thank you. Next question is from the line of Ketan Mehta from Mehta Family office. Please, please go ahead.
Rohan Mehta
Hi, good afternoon. Thank you for the opportunity. So the contribution from Europe is more than half of the like more than 50%. So what kind of challenges does this pose to the company?
Shashank Agarwal
I assume the question is assuming that Europe is in a bad position,
Rohan Mehta
A high contribution, this, the high dependency on this geographic region.
Shashank Agarwal
Yeah. So we have a long term standing relationship there and the customer base is very diversified in terms of the countries, the distributor profile, the industry profile and we in none of the markets we are a contributor of more than let’s say 10, 15% share of business and we are at the top segment. So we don’t see that as a very high risk. Europe, despite whatever we read and see, Europe’s manufacturing continues to increase. India as a country itself is only a 60% contributor to Europe’s imports and FIBCs.
There is still about 20, 25% that comes from Turkey and East Europe. India continues to replace that capacity.
Rohan Mehta
Okay, thank you for that. And what is the demand outlook from the Americas for North and South America? So what are our views on that region, that geography?
Shashank Agarwal
So demand in north and South America both remain stable. South America has been stable. It’s been about 22% of exports. North America, despite the tariff disruption and the volatility that was there was 16% the previous year to that it was 21%. So it came down from 21 to 16. The markets continue to offer good growth potential. We are actively working on expanding our presence there. Market conditions as they normalize, we expect further improvement in demand and we should be doing a higher contribution this year in North America.
Rohan Mehta
Okay, so thank you very much for those responses. Best wishes. Thank you.
Operator
Thank you. Participants, you may press Star and one to ask the question. Next question is from the line of Madhurati from Countercyclical Investments. Please go ahead.
Unidentified Participant
Thank you for the opportunity. So if I see our gross margins from the manufacturing division, they have been consistently at the 45% level for the past three quarters. And we are increasing our FIBC share going forward. So can we expect this to reach 50% in FY27
Shashank Agarwal
Or 28 as FIBC share increases? So Jared, two components to this. One component is the raw material cost itself which has been at an average of 55% in the previous years. As the raw material value goes up, it is not necessary that the selling price or let’s say the RM percentage as a percentage will go up in the same ratio. So I would say that if we are able to, with the increased FIBC volume and improvement in margins, if we are able to still maintain 45 to 47% gross margins, it would be a good goal and a good success to have.
So we don’t have a
Unidentified Participant
Price pass through clause in our FIBC order that we
Shashank Agarwal
Sell to Europe.
Unidentified Participant
And
Shashank Agarwal
We do, we do. But that is on per kilo basis and not on a percentage basis. So let’s say if the selling price is 200 and the raw material price is 100, the raw material goes up by 50 rupees, it becomes 150, the selling prices become 250. So 100 divided by 200 was 50%. But 150 divided by 250 would be a much larger percentage and let’s say it would be about 60%. So as opposed converter
Unidentified Participant
Margins.
Shashank Agarwal
Correct? Correct. I am talking on a broad basis.
Unidentified Participant
I wanted to understand regarding the break even level of this non woven technical segment. So will we be Operating at a loss for FY27 when we are doing 2025 crore revenue levels,
Shashank Agarwal
No, we will not be operating in a loss. I am sorry if I gave that picture but there will not be a loss in this year and then on moving. Okay, so like 20 also will be operating at a profit but the margin would be lower. Margin? Definitely when we start a business it will be lower but it is not operating at 20. The way it is that for one machine only six months are available, so 50 of the time is available. And for the second machine only 25% of the time is available. So if you put it like that, then only 35% of the time is available through the year.
So out of that we are saying we will utilize 70% of the capacity and that is why we will achieve 25 crores. Got it? So this 15 to 16%
Unidentified Participant
EBITDA margins would come in FR28 when we are operating at a steady state levels.
Shashank Agarwal
Correct, corrected.
Unidentified Participant
And so have we been able, have we supplied some tile trial orders or pilot products to some customers in the segment or that is. That is yet to begin.
Shashank Agarwal
It has started. It has been very baby steps. I would say it is nothing significant but seed marketing has started. We have almost met all the customers that we want to service. We have understood their problems. We are designing solutions for them. There has also been a round of sampling in certain industry segments. There have been trial commercial orders also where we have imported the material, where we have sourced it locally, where we have added some value to it and then sold it in the market.
But these are baby steps. Got it. And sir, what would be our capacity in this non O segment? And how much of our captive yarn would we use in this segment? So the capacity would be about 10,000 tons and yarns will never be used in this. The raw material for this is fiber which we do not manufacture currently. Okay, got it. So that is from my end. Thank you so much and all the rest,
Operator
Thank you. Participants, you may press star and one to answer question. Next question is from the line of Oramish Shah from money wisers. Please go ahead.
Manoj Agarwal
Yeah, hello. Am I audible?
Operator
Yes, go ahead.
Manoj Agarwal
Yes sir. When you say that the RM prices will not reach thousand and it will be stabilizing at 1200, 1300. Is this for a medium term? Once the geopolitical crisis soften or. Yes.
Shashank Agarwal
And how
Manoj Agarwal
Do we see the order book? Because when you say that you are, you know, I would say not changing but you know, going cautiously on orders then how will the order book and you know, value in value terms look like going forward.
Shashank Agarwal
So I would say capacity contraction is not on the card right now. We do not expect that we have to reduce our capacity. Having said that, order book will remain a challenge in this quarter and the next quarter. But we do not see that there is a structural change in the consumption pattern. So this is a question of only inventory adjustment and cautious purchase by the buyer because the prices are high. So if somebody needs to order thousand pieces, he will order 500 pieces right now, another 500 pieces maybe in the next month instead of ordering thousand pieces together.
Manoj Agarwal
So it will be a split you are saying?
Shashank Agarwal
Correct, correct. So people start to order smaller quantities, but more often.
Manoj Agarwal
Okay, but our lead times would be, I mean as we are doing it currently, it would be at the same levels.
Shashank Agarwal
They would decrease because the order book is reduced.
Manoj Agarwal
Okay, okay, okay, got it. So, so, and my next question is on Japan. I mean, is it on the back burner now or because that market is difficult to penetrate or you know, because when you say in the medium term also how is the Japan market and are we. Because our Europe market is very strong, as we all know that
Shashank Agarwal
Japan is never on the back burner. It is still in the focus, efforts are still there. It is a market to be very patient. It is a very price competitive market. Given this disruption, China’s raw material was cheaper than India’s raw material. So again, the switch from China to India couldn’t happen in this time because it is largely serviced by China and Vietnam where the polypropylene price was much lower than India during February, March, April.
Manoj Agarwal
What was the difference? If you could just quantify.
Shashank Agarwal
So in the month of March, the average Indian polypropylene was 1500. China was about 1250.
Manoj Agarwal
Okay, Okay. But it’s, it’s on the cards. It’s not as a backbone, as you are saying, it’s on the. We
Shashank Agarwal
Are also exhibiting at Tokyo park in September, October again this year. It is in focus. Absolutely.
Manoj Agarwal
Okay, so that. Why am I asking this? Because I feel that once we get a strategic entry, will our margin see upward trend from the current levels also going forward? Obviously it’s still too early to say, but it can be going upwards. Right.
Shashank Agarwal
I don’t expect Japan to cause a significant difference in the margin. What Japan will do is it will add further diversification in the market segmentation. It will allow us to increase our capacity in a more aggressive manner because the volumes there are significantly different. And also as the first mover advantage for cancer plastic part in Japan from an Indian perspective, we will get a margin benefit for the first three, four years. Also the relationships that we get developed will be much more stronger than coming in later.
So it will be a first mover advantage which is strategic in nature from a long term perspective.
Manoj Agarwal
Okay sir. Thank you sir, I’ll join back with you. Thank you.
Operator
Thank you. Participants, you may press RN1, 21 for question. Next question is from the line of Shravan Modi from Syndicate family office. Please go ahead.
Rohan Mehta
So in terms of. Hello. Yeah, so my question is how is the company edging against future geopolitical risk?
Shashank Agarwal
Sorry, could you please explain the question a little more? Yeah, so I’m asking you how
Rohan Mehta
Is the company hedging against future geopolitical risk in terms of geopolitical impact?
Shashank Agarwal
So if we see the past, right, so every time there has been a disruption, the company has been able to very in great agility and flexibility been able to handle the situation. That is because of the long term relationships and partnerships that we have on the supplier side and the customer side both. So we have multiple suppliers in India, multiple controllers across the globe and similarly diversification the customer base. Where will the next geopolitical disruption happen? We do not have an answer.
Can we influence the disruption? I think the answer is no. So the only thing that we can do is to build a stronger foundation in terms of relationships, network, have a diversified and divided supply and customer base, be able to act, reduce the risk in those moments. Those are the steps which we are repeatedly doing. Every time there is something that happens. There was the Red Sea crisis that happened. There were. There was a Russia, Ukraine war which shot up the gas prices in Europe. There was the COVID lockdown that happened.
So multiple challenges. But agility and flexibility with long term partnerships is the key.
Rohan Mehta
Right? Thank you. Just one more question. I just want to ask about this. Why is HF’s contribution quite relatively low despite it being a very large market?
Shashank Agarwal
So Asia’s contribution is relatively low due to the combination of competitive intensity and also our strategic market focus region is highly price competitive. There is strong presence of local manufacturers with a lesser lead time. This impacts margins as well. Also in the past we have focused highly on Europe and America and value added opportunities are better and local manufacturing base is not there. So in the past it was a strategic choice. Today it is a situation of price competitiveness and within Asia we should see Japan and South Korea separately and places like Indonesia, Thailand separately and Philippines, Cambodia, China separately.
Rohan Mehta
Thanks so much for your feedback and inputs. I’ll just join the feedback and yeah, good luck to.
Operator
Thank you. R7G1 to ask the question. Next question is from the line of an. From an partners. Please go ahead.
Unidentified Participant
Hi, how are you?
Operator
I’m sorry to not. There’s a lot of background noise from your. Am
Unidentified Participant
I audience level.
Operator
Yeah, go ahead.
Unidentified Participant
Yeah, first of all, I had a few questions. The first question was that you said that in Europe we have announced. Sorry
Operator
To interrupt you. Can you please move to a different location?
Unidentified Participant
Yeah, just give me a minute. Yeah, just. Hi. For the module. Go
Operator
Ahead.
Unidentified Participant
Yeah. So you said that majority of our exports are to Europe and around 40% come from Eastern Europe and other Asian markets. So are we actively planning to take some more share from the European market or.
Shashank Agarwal
Sorry, I mean the question is, are we increasing our focus on Europe? Is that the question?
Unidentified Participant
Yeah, like actively. Is like are we actively trying to get more. What do you say, exports to Europe or is that like a passive plan we have?
Shashank Agarwal
No, no, it’s completely active. We are very strong presence in Europe. Almost 55% revenues are there. So it’s like, do we want.
Unidentified Participant
Are we actively trying to increase it to 60, 60 to 65%? Let’s say.
Shashank Agarwal
No, I think 55 to where we are in a very comfortable situation. The growth will be coming from North America, South America, Japan.
Unidentified Participant
Correct. And I think the last time I spoke to the cfo, he was mentioning something about artificial leather or leather upholstery that you guys might be starting. So can I have some clarity on that?
Shashank Agarwal
What is the clarity that is required?
Unidentified Participant
Like has the production started? Are we in line or. I haven’t really had an update.
Shashank Agarwal
So this is. Yeah. All right. So this is the non mobile technical textiles. The first machine will start its production in September and then second machine in December. This will be the commercial production. We will have 25 crores worth of revenue this year. Next year we should be looking at between 100, 225 crores next year.
Unidentified Participant
Correct. And what sort of margins are we looking at in that business?
Shashank Agarwal
15 to 16% EBITDA next year.
Unidentified Participant
Okay. And do we have like, let’s say five years or 10 years down the line? How much do you think that will contribute to the top line
Shashank Agarwal
Next 10 years?
Unidentified Participant
Yeah, like let’s say next. The next five or 10 years. How much would you think that would be contributing to the top? I
Shashank Agarwal
Would say that this would become. This would become an equal contributor compared to Graphia. So this will become a significant portion of the business.
Unidentified Participant
Oh, okay. All right. This would also.
Shashank Agarwal
This would also. So as we will continue to increase our business profile in the non woven technical textile area. But obviously this will get decided once we start our commercial production and once you start getting OEM approvals, it might also lead to the need of a backward integration in this area.
Unidentified Participant
So would that also lead to an increase in margins? Right.
Shashank Agarwal
Yes.
Unidentified Participant
Okay, got it. Thank you so much.
Operator
Thank you. Participants, you may press star and want to ask a question. Next question is from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Unidentified Participant
Hello.
Operator
Yes,
Manoj Agarwal
Thank you for the opportunity.
Rohan Mehta
In your presentation you have alluded to precisely that we are eyeing for capability, aligned diversification and capital allocation. In the. In the conversation that we are having currently you did alluded to the fact that we are looking to take the next leap forward in terms of this non woman part of the story. So if you could just spare a few more minutes of what kind of opportunity the non woven segment is offering and can you give us some any comparables where we can look into who are already operating in the segment in the country or any, any peer comparison that will give us some more understanding of what exactly are we eyeing in this space.
Shashank Agarwal
So there are three things, right? Broadly, let us see there are three things. The first is the B2C part of it which is Valex Ventures in UK. We have not got an immediate success yet but we have to keep trying though. So we will try different business models. What will work, when it will work, how it will work. We have to continue trying so there is some certain capital allocation there. Second, it is the performance yarn that is a joint venture with Acegoma where we do see in the long term, medium term very high margin business.
Good, good growth, maybe not rapid but good growth and something very difficult to copy for our competition because of the technology in the machine, in the know how, in the making of it. It is also protected by patents with Asygoma. That is the second growth engine. The third one is the non movement exhibit Excels. That is an area of hypergrowth where we are in our country today with a very low consumption of this non urban technical textile compared to other developing countries. We will see much more demand, much more need of this particular product, many more applications.
It is industry agnostic. The consumption of this is across industries from automotive to geotextiles, infrastructure, luxury leather footwear. There’s also filter fabric. There is also it’s used in retail, it is used in exhibitions, it’s used in houses. So there are many reasons. Now what we have started off with is two extremely flexible and agile Machines which will be capable of manufacturing a lot of these products. We will find our niche going over the next three to 12 months. We will see what fits in best for our portfolio.
Our capability, our comfort, where we see the maximum growth and that is where we will expand. This also brings us to an opportunity to enter this world of recyclability where the raw material is polyester fiber. So the next obvious step after reaching a certain scale and non woven technical textiles will be to do backward integration
Rohan Mehta
In this non woven segment. What is the end product currently that it will be the yarn part of the fabric. What are we going to sell directly to the non
Shashank Agarwal
Woven? Non woven by definition means a non woven fabric which is made out of fiber. The end markets will be automotive. So the headliners in the cars, the artificial leather for furniture, for automotive cars, for office chairs for example. Then geotextiles for roads, railways, flood control, then exhibition mats. Then it is also heavily used in the footwear industry for sole, for anti static applications. There are also carpet and rug applications. There are, there is also lining for filter fabrics.
So the applications are across industries and different place. The capability is in the machine and the know how of it. The team that we built will get the know how and the machines that we have ordered are flexible enough to do this entire range.
Rohan Mehta
Correct sir. Coming back to again our core product today, FIBC, you mentioned in your opening remark about the 18,000 metric time as the installed capacity. Our sales for this year correctly here was 14,352. So that translates into sub 80% utility level. So correct me here, like you mentioned, I think 85% as the number or is there any next map in mic? Understand
Shashank Agarwal
Your numbers are correct. What we have dispatched this year is 14,351 tons. But what we produce is about 15,000 tons. So 15,000 divided by 18,000 is about 83%. So yes, we utilize about 83%.
Rohan Mehta
So
Shashank Agarwal
There is something I would also like to clarify. The way this is measured is we tell you 10 figures because it’s easy to understand. But one kilo of FIBC can be produced in 10 minutes or it can be produced in five minutes. So the real capacity is based on the stitching time that is available by the tailor and not by per kilo. So sometimes we see different figures in per kilogram, but it is more about utilization of stitching capacity.
Rohan Mehta
Correct. That defines our margins.
Shashank Agarwal
Our margins and our margins are not defined on per kg but on per stitching minute of retailer.
Rohan Mehta
So in that case a lot of investment is to be done on the manpower part. So our preparation should also be aligned to adding more skilled labors which will add to the margin. Since we are now looking to up our capacity significantly going ahead.
Shashank Agarwal
Yes. So the easiest thing is to add a building and machines. The most difficult thing is to get people to work and to train them for quality and consistency. The entire focus of the company is there. We are working extremely hard even in the new unit, even in the existing unit. We might. We are also working on different models on how we can probably decentralize the production. But this is the key challenge and it is also the key capability of the company. Also geographically we are located at Kanpur, which is also a very big advantage.
Rohan Mehta
Sir, two small points. One in the opening remark you mentioned about the. The reversal part of a 3.1 crore that if you could just explain explained to the benefit of how that. How has that worked and then our EBITDA margin would be much higher than what we have reported. Since it’s a notional entry. What I could understood from your opening remark.
Shashank Agarwal
Decrease.
Rohan Mehta
But it’s an only. It’s only a book entry. That. That was my. My point.
Shashank Agarwal
So eight seconds. So basically what. So we use a scheme of the Ministry of Commerce, which is dfia. So it allows us to buy domestic material and then we avail the license which has been sold in the market which is almost equivalent to the customs duty of the import. Now when the custom duty has been suspended by the government for three months, the value of that license has become zero. We are unable to sell it in the license in the market. Whenever this reversal of the government will happen, this revival will also happen.
Rohan Mehta
So this was the closing balance for a transaction up to 31 March or up to 30 December, this value, the. That reversal will be took what this reversal is
Shashank Agarwal
31st December. This, this reversal was for the 31st of December up to the 31st of December
Rohan Mehta
Up to 31st of December. N1 number, if we can define it for FY25 or if you have the number for the 9 months.
Shashank Agarwal
9 months. So that’s already realized.
Rohan Mehta
So
Shashank Agarwal
A quarter December, quarter March. So similar number to December, similar number March.
Rohan Mehta
What is the. I was looking for.
Shashank Agarwal
Okay, I don’t have the figure right away, but it is also a very complex and complicated thing which because the percentage of DFI exports to advanced authorization also changes from quarter to quarter. And it also depends on the percentage of product mix from FIBC fabric the pricing of raw material. So it is a little more complex than this. But to answer in short we should say that three to three and a half CR for quarter is a maybe an average number.
Rohan Mehta
Okay. And last point was about the EBITDA margin trajectory. If we take as in your presentation mentioned that X of trading we did 12.17%. So going ahead and the current environment we will be able to better this or match this number of 12.17 purely for the manufacturing segment
Shashank Agarwal
I would say that you would maintain a similar number.
Rohan Mehta
Okay. And the bookkeeping question I have about the non current attack part. So can I ask here or should I nail it? Yeah.
Shashank Agarwal
No. No. So there is an increase of capital advances by about 12 point. So it’s basically capital advances of 12.3 crores. The non woven machinery that is there, the FIBC building that is is being made other machinery that is coming. So there is a total increase of 13. There is the increases from 1.46 crores to 3475 crores.
Rohan Mehta
Okay thank you sir for all all the exclamations provided to the team and we hope for continued interaction and best. Best of luck to the team sir. Hope to inter. Thank you. Thank you.
Operator
Thank you ladies and gentlemen. You must have star and one to ask a question. Next question is from the line of Madhurati from Cyclical investments. Please go ahead.
Unidentified Participant
So thank you for the opportunity once again sir. What is the volume expectation for this non woven fabric in FY28?
Shashank Agarwal
About 8,000 9,000 tons
Unidentified Participant
Optimal levels. So I also wanted to understand that we are we are going to manufacture something called artificial leather in this segment. And there are companies like my Unicota who manufacture this PVC leather for automotive segments. So how is our product different from theirs? I’m just trying to understand the market and
Shashank Agarwal
We will be making the backing for the artificial leather. So my new unique orders typically would be a customer.
Unidentified Participant
Got it. Got it. Answer just one final question sir. On this premium polypropy we are expecting a 20 to 25 crore revenue in FY27. What kind of margin profile are we expecting in this answer? What is our capacity and Capex in this segment?
Shashank Agarwal
So we’re talking about SA can which is a joint venture between Kanpur Pacific and Acebona. We should expect about 20 to 25 crores. The there is no significant Capex because it’s a marketing company in manufacturing capabilities in Kanpur. Plastic pack.
Unidentified Participant
Right. So our current equipment will be sufficient for us to manufacture this. We already
Shashank Agarwal
Have installed. We already have installed additional equipment in FY 26 27. Oh sorry. In 25, 26.
Unidentified Participant
Okay. And what would be that there is no particular amount of capex that we have done particularly for the JV. The
Shashank Agarwal
CapEx is about 3 cr.
Unidentified Participant
Okay. 3 year. And so this 25 crores is the revenue share that Kanpur Tashtipak will get. Or this is the combined revenue and 12 and a half Karore will be for Kanpur plastic
Shashank Agarwal
Pack. 23, 25 crores is what the saan will sell. The entire manufacturing of it will be done by Kan Plastic pack. So Kanur Plastic Pack will be selling to Asakan at a lower value, let’s say at a markdown of 20%. So plastic will sell to Asakan at 20 crores and then a second will sell the product at 25 crores.
Unidentified Participant
Right. So on what would be the EBITDA for us on overall basis? So for the marketing JV as well as for the production or what kind of EBITDA margin are we
Shashank Agarwal
Marketing JV, we should look at 15%. And for manufacturing also we should look at 15%.
Unidentified Participant
Got it.
Shashank Agarwal
The product is highly technology driven.
Unidentified Participant
Right? So this product looks very interesting. Is there a possibility for Kanpur to move from yarn to fabric for this as the demand or as the JV or as a relationship strengthens? Can we move into fabric manufacturing as well for this product?
Shashank Agarwal
So can we? The answer is yes. Do we want to? Currently I would say the answer is no because the the technology is in manufacturing the yarn not the fabric.
Unidentified Participant
Right. Got it. So that was from my chair. Thank you so much and all the best.
Shashank Agarwal
Thank you.
Operator
Thank you very much. As you know for the questions, I’ll now hand the conference over to the management for closing comments.
Shashank Agarwal
Thank you for your time and looking forward to seeing you next quarter.
Operator
Thank you very much on behalf of kanpur Plastic Pack Ltd. That concludes this conference. Thank you for joining us and you may now disconnect. Thank you.