AGI Greenpac Ltd (NSE: AGI) Q1 2026 Earnings Call dated Jul. 22, 2025
Corporate Participants:
Rajesh Khosla — Chief Executive Officer
Om Prakash Pandey — Chief Financial Officer
Sandeep Sikka — Group Chief Financial Officer
Analysts:
Akhilesh Kumar — Analyst
Balasubramanian — Analyst
Subrata Sarkar — Analyst
Parikshit Gupta — Analyst
Maitri Shah — Analyst
Unidentified Participant
Anil Shah — Analyst
Paras Chheda
Presentation:
Operator
Ladies and gentlemen, good day and welcome to AGI Greenpack Limited Q1 and FY ’26 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. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Kidish Kumar from Emkay Global Financial Services. Thank you, and over to you, sir.
Akhilesh Kumar — Analyst
Thank you, Amshak. Good evening, everyone. Thank you all for joining in the Q1 FY ’26 earnings call of AGI Greenpack. We have with us today Mr Rajesh Khosla, President and CEO; Mr Umprakash Pande, CFO; and Mr Sandeep Sikka, Group CFO. So without any further ado, I now hand over the call to the management for their opening remarks. Over to you, sir.
Rajesh Khosla — Chief Executive Officer
Thank you. Good evening, everyone, and welcome to AGI Green Q1 FY ’26 earnings call. We have already circulated our earnings presentation, which is available on our website and on the stock exchange website. Kindly note that remarks or observation made during the today’s call might be forward-looking. These may include, but are not limited to, financial projections or statements regarding the company plan, objectives, expectation or intention. The company does not have any obligation to revise this forward-looking statement to reflect any future events or developments. For a comprehensive disclaimer, please refer to Slide number two of the earnings presentation.
Now let us turn to our performance for the first-quarter of FY ’26, where your company delivered a truly robust quarter. Total income increased by 25% year-on-year to INR721 crores compared to INR577 crore in Q1 FY ’25. The net profit surged by an impressive 41% year-on-year to INR89 crore, up from INR63 crore in same-period last year. EBITDA for Q1 FY ’26 stood at INR176 crores, marking a strong 20% increase from INR147 crore in Q1 FY ’25. We achieved this exceptional performance through disciplined execution and improved operational efficiencies across-the-board. Our commitment to delivering proactive and innovative packaging solution has also been key, enabling us to solidify our market position and force even stronger client relationship. A major contributor to our enhanced profitability is the successful elevation of our product mix now including more premium higher-margin segments such as cosmetic, and alcohel.
Om Prakash Pandey — Chief Financial Officer
Regarding our current financial standing as on — as of June 30, 2025, our gross debt was INR470 crores with a healthy cash balance of INR263 crores, resulting in a net-debt of INR207 crore. We have already demonstrated our commitment to financial prudence by prepaying INR193.5 crores of term loans in July 2025, a move that has significantly strengthened our balance sheet. This proactive approach to debt management and our strategic investment, including a INR700 crore glass expansion, increasing capacity by 25% and a INR1,000 crore highly strategic investment in aluginium kinds are set to drive long-term growth for next 10 to 15 years, capitalizing on a high-growth liquid packaging market and rising GTP per-capita.
Now, I will hand over the call to Mr Khosla to take you through some of the key business highlights over to Mr Khosla.
Rajesh Khosla — Chief Executive Officer
Thank you, Mr Pande. Good evening, everyone, and thank you for joining us. I am thrilled to begin by sharing some great news. AGI Greenpack Limited has been honored with the Sustainable Organization of the Award 2025 by UBS Forum. Adding to this, our specialty glass unit has also achieved the prestigious ISO 5001 Energy Management System certificate. These significant recognization truly underscore our deep commitment to responsible operations and environmental stewardship, which remains a core value at AGI Greenpack. Turning to our operational performance and future outlook, we are currently operating at over 95% capacity utilization across our existing plants. A testament to robust market demand for the year ’26, we project a year-on-year growth of 8% to 10%. Looking further ahead, once our new capital expenditure project comes online, we anticipate a significant escalation in our growth trajectory, targeting sustained year-on-year growth of 15% to 20% from the year ’27 onwards.
This translates to a strategic aim of doubling our top-line every four years, reflecting our stock and strong confidence in our planned expansion. In a significant leap towards the future growth, your — our Board has approved AGI’s strategic entry into rapidly expanding aluminum cans segment. The new product category perfectly complements our existing packaging solution and directly leveraging our strong customer relationship, allowing us to offer an even broader and even comprehensive range of products. We are investing approximately INR1,000 crore in two phases for a new cutting-edge manufacturing plant in Uttar Pradesh.
We expect this state-of-the-art facility to be operational by Q3 financial year ’28, initially producing 950 million aluminum cans, expanding to 1.6 billion of cans by year 2030. This expansion incorporates the latest technology to ensure superior quality and efficiency from day-one. This new venture is an addition to the 500 tonne daily capacity glass manufacturing plant we announced for Madhya Pradesh in March 2025 to significantly strengthen our ability to serve the Northern and Central India market. This new plant will boost our overall production capacity by approximately 25%, underscoring our commitment to capturing emerging market opportunities. We believe AGI is incredibly well-positioned for continued growth and success as we meet the evolving demand of our industry. Now, we would like to open the call for any questions you may have. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone 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 assembles the first question is from the line of Balas Abramanian from Arihant Arihant Capital. Please go-ahead.
Balasubramanian
Good evening, sir. Thank you so much for the opportunities. Sir, my first question regarding aluminum cans INR1,000 crore-plus investments. How this capex will be funded? And secondly, like what is the raw-material sourcing strategy for aluminum can product-line and whether it is sourced domestically or it is imported and is there any long-term supply agreements in-place? These are my first question.
Om Prakash Pandey
So I’ll take the first part and then I’ll request Rajesh to address to the second part. So we will fund it with a mix of internal accruals and the long-term debt. We expect to start with around 60 long-term. But depending how much cash we generate, we may prepay some of the loans later on. But as a philosophy, we fund long-term of long-term investments with a long-term matching position on the debt side. So to start with, it’s a mix of debt and internal accruals. And as a part of the process, we may raise some equity over a period of time as the projects are getting more narror to the closures. Rajesh, I would request if you can take it on the aluminum side, the sourcing and
Rajesh Khosla
You are asking on the raw-material supply-side. So this is the aluminum coils which are being used. They have a very special grade, which is called 3104 specification. Currently, we can buy from Novelis, which is a part of Hindalco Group, novelist we can buy from USA, we can buy from South Korea or we can buy even — there is a company called UACG in Thailand. And even Hindalco India has started producing. We understand for the market, it has not yet stabilized to the maximum quality norms, but I think so within next one year or so, Hindalco, India will also be available to supply these coils.
So we have enough opportunity to buy these aluminum coils from all these sources. None the above, there is also China, which is a great producer of these aluminum coils, but we don’t have any plan to buy from China right now. We have a plan to buy from Novelis South Korea or maybe Thailand.
Balasubramanian
Okay. So what is the asset turn-in this business sir?
Rajesh Khosla
Okay,
Balasubramanian
What is the asset turn-in this aluminum can business post completion.,
Rajesh Khosla
I have not understood, can you just —
Om Prakash Pandey
You are talking about the asset turnover?
Balasubramanian
Yes, sir. Yes, sir.
Rajesh Khosla
Okay, okay. Okay. So it is approximately then it will be full fledgered with 1.6 billion tonne of capacity, so approximate it is around INR1,250 crores will be the turnover, which is going to come from this business. With the full Phase-1 plus Phase-2 put together.
Balasubramanian
Okay, sir, my second question regarding average realization per tonne for class packaging and specialized packaging products and how the — how the trends are recently there?
Rajesh Khosla
Sir, we do not mention the average price realization per metric ton, but I can say that the realization per ton is stable as compared to last few quarters.
Balasubramanian
Okay. And big improvement in the special glass business.
Rajesh Khosla
So again,
Balasubramanian
There is an improvement in the realization in the specialty glass business.
Rajesh Khosla
Yeah, of course, that is a product mix which is happening and — but otherwise, segment-wise segment, so it is more or less stable.
Balasubramanian
Okay, sir. And sir, how does this 500 tonnes per day greenfield plant, it’s almost 25% capacity addition. How this address competition from cheaper imports?
Rajesh Khosla
I don’t think so. There is any cheaper imports which are coming from China or any other sources, glass container is an area which is quite sensitive to the imports or to the freight rates. So there is a very small quantity which is coming as an import. So everything is being going to be real, I say served from the local market. So we do not worry and we do not care much about the import part. So whatever is the imports which are coming in this country, in this particular category of the glass, I hope those all will be over once our capacity is there on-stream.
Balasubramanian
Okay, sir. Thank you, sir. I’ll come back-in queue.
Operator
Thank you. The next question is from the line of Sarkar from Mount Infra. Please go-ahead.
Subrata Sarkar
Hello. Hello.
Operator
Yes, you are on.
Rajesh Khosla
Yes, please. Yes, please.
Subrata Sarkar
Yeah. So sir, my question is more on the like margin side. So I need to understand a little bit like both ways. One is like if we compare like year-on-year, our margin has come down. So the reason behind that, if you can explain? And sir, I would also like to go back a little — like little back, like if I go four, five years back, we used to operate at a much, much lower-margin. But from that we have LEV — our margin has gradually increased and reached from, let’s say, 12% 13% to 24% 25% and now in this quarter it has come down to, let’s say, 21%. So if you can highlight both sides why we had experienced a such a improvement in the margin over the last four, five years? And then like on a year-on-year basis and on a Q-on-Q basis, margin is gradually coming down. So if you can like explain that a little bit.
Rajesh Khosla
MR., shall I address this issue?
Sandeep Sikka
Yeah. Please go-ahead.
Rajesh Khosla
Okay. If I see the margins, particularly the EBITDA margins on year-on-year or I can say quarter-on-quarter, so there may be a small fluctuation here and there, a few percentage points like 1%, 1.5%, it is basically because cost and prices, they do not run just parallel. So there is a lot of time lag between these two. And it is not possible that for every increase or decrease in the prices, we go to the market and we settle the same. So we are not operating on like LME-based system or something like that. So that is one part. Secondly, you asked after the COVID time, there has been quite an increase or a better — our operational margins and everything is there.
Yes, because a lot of work has been done on the operational efficiency, whether it is on, I can say on the production side where we have debottlenecked a lot of production capacities and achieved some economy of scale part, we have reduced on the energy consumption part. We have done a lot of things on the automation side. So all those efforts, they have resulted in achieving some level of there. But of course, at those heights, there are some sort of a small fluctuation turbulence where some few percentages come, sometimes they go up, sometimes they go down. But more or less if we talk about some particular band, so everything is operating within the band, we have been talking all throughout in our discussions in our earlier quarters also okay.
Subrata Sarkar
So what is our like stable state margin, sir? I understand it can fluctuate through both up and now both sides like — but what is our like stable state operating margin kind of EBITDA?
Rajesh Khosla
So whatever margins we have been getting right now, they are more or less stable. I think they are close to 25% and they are very stable. So as per the — as per all the reports which are available with me, they are more or less close to that. Sometimes it is 25.4%, sometime it is 25.7%, sometime it is 24.9% also. So everything is falling within the band. And also, it all depends upon the product mix also. And some of the products, they are very highly seasonal. So like for example, particular like beer industry, they are very-high in the — in the in the quarter like January, February, March or April, May, June and the food may be in some other segments. So all those segments or all those product mix, they try to change quarter-on-quarter earning because of that. But overall, our margins and the market, they are reasonably stable, but always in a band. We cannot have a line, but it is in a band.
Subrata Sarkar
Okay. Okay. Sir, just last question to understand a little bit more from our perspective, is it like EBITDA per ton is the right matrix to track or what is the matrics for us to track to understand it better? Or percentage margin is good.
Rajesh Khosla
Sir, you can track on the data whatever is available in the balance sheet?
Subrata Sarkar
Yes, sir. I got it, sir. So that’s what I’m asking, sir. So percentage margin is the right way to look into it or
Rajesh Khosla
Sir, unfortunately, the total EBITDA margins or PBT is there. But since the quantities are not being mentioned, so it may not be possible to evaluate EBITDA per tonne of that. And we are also not disclosing EBITDA per ton of that. So what I’m discussing from my side is, we see our reports and they are more or less stable in a band.
Subrata Sarkar
Okay. Thank you. Thank you, sir.
Rajesh Khosla
Thank you, sir.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, please limit your questions to two per participant. The next question is from the line of Parikshit Gupta from Fairvalue Capital. Please go-ahead.
Parikshit Gupta
Thank you for the opportunity and congratulations on a great set of results. My first question on the aluminum cans business. Can you tell me what is the steady-state EBITDA margin that you’re expecting from this business?
Rajesh Khosla
Okay. See, since we are not in this business as on-date and we can only refer to the reports and results which are publicly available of all the other can manufacturers. So from there, I can pick it up that the EBITDA margins and other margins, they will be close to whatever we have been getting in the glass segment. Maybe a little less, maybe a little more, it all depends upon so many more factors, but they will be close to that.
Parikshit Gupta
Okay. And what about gross margins then? Okay, EBITDA we understand might be a little volatile also. But what about gross?
Rajesh Khosla
Okay. MR., you like to address this?
Sandeep Sikka
So generally, if you see in aluminum cans, the input raw-material, aluminum and other paint costs are substantially — which forms a substantial part. Unlike in glass actually wherein we do the delta valuation in terms of energy. So this is not — aluminum can is not that energy-intensive. So we feel on a stable state around 35% 36% gross margin and EBITDA margin upon full stabilization ranging around 17% to 19%. So the rest is the delta of around 15% 16% is the other costs which are relating to logistics or some other elements of cost, but the gross margin expectation is somewhere around 35% 36% and EBITDA margin ranging around 17%, 19%.
Rajesh Khosla
And they are as per the — as per the industry norms,
Sandeep Sikka
It’s in-line with what
Rajesh Khosla
Global industry norms, I can say.
Sandeep Sikka
Producers are also achieving the similar.
Parikshit Gupta
Understood. This is helpful. And what about the competitive landscape in India currently? Can you please tell me a little bit about that?
Rajesh Khosla
Yes. There are — okay, so one is from the demand-side and one is from the supply-side. If you’re talking from the competitor scope of that, there are only two competitors as on today. So one is and the second one is ball. So Campak and Ball are there and and Ball both are the America-based companies and they are operating. So both the companies have two, two plants each in India. So — and we will be the new one which are going to enter.
Parikshit Gupta
Okay. And on the capacity front, as compared with our 1.6 billion cans annual aspiration, how much would they be currently at?
Rajesh Khosla
Right now, the demand and supply is a balanced at 3.5 billion cans as on today. But there are some expansions which has been announced by both the parties. 600 million cans have been announced by Paul and 1 billion cans have been announced by. Yeah. So our will be 1.3 billion, but in two phases. The first phase will be close to 900 million and second phase will be then 0.6 billion. So all put together will be close to 1.6 or 1.5.6 something. So I think the India market will be growing very, very fast and such capacities will be absorbed easily in that. I think so. We need much more capacities in the times to come.
Parikshit Gupta
Okay. Okay, understood. My — another question before I get back into the queue, what was the share of exports in the first-quarter when we spoke earlier in the previous quarters, we mentioned that the aspiration is to increase the overall share to about 15%. Is there any change in that target and how close are we to achieving it?
Rajesh Khosla
Okay. We are — see, export is — okay, one is the aspirational number of 15% stands still like that, but we are not going to export at the cost of our margins or at the cost of domestic. So our priority is if at all we are getting a healthy margin from the domestic players or the domestic customers, it is our first choice to supply to them rather than exporting. But looking to the overall condition, 15% export target, we still there and we like to achieve in the times to come. That looks to be for — is a reasonable one. Right now, we are less than 10%, same like last quarter, I can say like that. We are operating at the similar lines. So we have a wider and a bigger scope in specialized glass and a lesser scope in commercial glass. But within the commercial, there are further some sub-segments are there which can have a chance of exporting in a big way. But right now, we are well occupied.
Our capacity utilization is more than 95%. We are selling whatever we are producing. So it is not a pressure on us to export just for the sake of exporting.
Sandeep Sikka
Yeah. So I think to what Rajesh said is on 154 tonne specialty glass. The focus there is also on the exports. Rajesh, if you can extrapolate that for the market, I think that will be.
Rajesh Khosla
Okay. In our specialized glass segment, so obviously, there is a — there is a big thrust on the export side. And right now, we are — I can say we are exporting a close to around 10%, 11% on the export side and soon we will be achieving 15% to 20% of the target of the export soon. In the specialized segment
Parikshit Gupta
Understood. Just one follow-up on it, please. So can we consider the HNG case to be not subject now because I have a question on that
Sandeep Sikka
So it’s still in the court and ideally I think the Supreme Court judgment is there. We had filed for a review and which the decision is still against us. So they have given it the second-largest bidder, but matching our bid plus some other conditions, which is there in the review order of the Supreme Court. Since the matter is still prejudiced and it’s before the NCLT Kolkata. So I’d still like to avoid it at this.
Parikshit Gupta
Understood. Thank you for this. I’ll get back into the queue.
Operator
Thank you. The next question is from the line of Maitri Shah from Sapphire Capital. Please go-ahead.
Maitri Shah
Yeah, hello, am I audible? Yes. Hello. Yes, you’re audible. Previously, you mentioned that our guidance from FY ’27 onwards is 15% to 20% growth. So that will be post FY ’27, is that correct?
Sandeep Sikka
So if you see right now, we have a production facility, a subset of a production facility. So we have been giving that we should be able to grow the debottlenecking of the existing facilities, using better product mix or using higher capacity utilization enhancing on the other products like security caps and closure. So there are plus number of other initiatives. We are adding some more lines wherein we can do more value-added products. So from the existing patients, we feel 8% to 10% growth momentum, which is there, which we should be able to maintain over next two, three years till we have a new greenfield 500 ton plant in the state of Madhya Pradesh.
And also within a six months of that, the first phase of the production with 950 million cans, aluminum can or for the liquid packaging that will also come through. So after all this, it’s a growth on both the sales and the underlying EBITDA and the profitability and more cash generation and we’ll continue to keep investing into the — into these businesses so that we have — we achieved the size and scale. And overall guidance which we have given now is that in a span of five to six year, we should be able to grow almost 2.5 times of what we are currently and when we consider a base of FY ’25?
Maitri Shah
Okay. And the margins you said will be in the range of 25%, 24% to 25%.
Sandeep Sikka
Yeah.
Maitri Shah
And once the aluminum Cans come in, those margins are much lower than that of glass. So what sort of blended margins will we have post FY ’28?
Om Prakash Pandey
So right now till existing operations are there, we have disclosed EBITDA margin ranging 23% 25%. The guidance on the stabilized margins on aluminum cans, we have stated like it’s in a range of 17% to 19%. We feel that we should be able to do 1.2 times the investments which we do in cans. So you can use a mix of that and drive actually, but it should be in a range of somewhere around, 21% 22% then around 22% 23%
Maitri Shah
Then. And this 1.6 billion cans will be like completely optimum utilization by FY ’29 or by FY ’30.
Om Prakash Pandey
So in this industry, when you have a 1.6 billion can capacity, that’s installed capacity. But there is a of the facility or there are product mix changes because of the sizes of cans are also different. So industry is able to take an output of ranging 85% to 88%, 89% capacity utilization on account of maintenance days, the change mix in the change of the punching lines and other stuff. So the equivalent production — the saleable production out of this should be somewhere ranging 1.35 billion cans against 1.6 million — 1.6 billion can capacity.
Maitri Shah
And we’ll be achieving that correct?
Om Prakash Pandey
Sorry.
Maitri Shah
We’ll be will be targeting that utilization by FY 2030.
Om Prakash Pandey
No, the first phase with 950, what we are doing is the whole paraphernalia of the plant, including utilities, we are building in-line with 1.6 with installed capacity of 1.6 million ga. But in the first phase, the machineries would have an installed capacity of 950 million cans. And then we’ll wait for another year or so and then add additional 60 million can capacity. So that by March 30, we are ready with the whole 1.6 billion can capacity. So the turnover will start flowing in from the aluminum can from Q3 of FY ’27 ’28.
Maitri Shah
Okay. Yeah, that is it from my side. Thank you.
Operator
Thank you. The next question is from the line of Mde from Investments. Please go-ahead.
Unidentified Participant
Hi, so first of all, congratulations for a great set of numbers and thank you for having my question. I just wanted to ask like what was your rationale behind flooring into the aluminum cans segment? What are the synergies that you expect? And having said that, how do you plan to acquire customers? Are you planning to sell cans to your existing customers that take clear waters from you or are you planning to acquire new customers all-the-time?
Rajesh Khosla
Let me answer, both cans as well as glass, they fall under rigid packaging category. So the customers are more or less same. There are some set of customers who are into glass only and there are subset of customers who are into cans only. But majority of the customers, they fall into glass and can. So we may not have any problem and that is one of the reason why we are entering this category because it is complementing our business. For example, in the beer category, in the cold drink category and in other non-alchoric beverage category. So all the customers are saying, our relationship stands with them and it will be quite easy for us to enter into relationship with those customers.
Unidentified Participant
Okay. Thank you. And just last question from my side. Can you just keep in a number of — sorry, the capacity utilization in this quarter of the specialty glass factory?
Rajesh Khosla
Okay. And I think the capacity utilization in the — in the specialized glass is shared below 80% and there is a good scope that we can increase. We are doing by debottlenecking lot of machineries and other things. And we hope that we will be able to achieve some optimum level in next — within this financial year, hopefully.
Unidentified Participant
Okay. So post debottlenecking what addition to the capacity do you expect in additional.
Rajesh Khosla
Post bottlenecking, I think we will be able to make our capacity utilization close to 100%. I would say 100% means 95% to 100%.
Unidentified Participant
Okay, sir. Understood. That’s all from my side. Thanks.
Operator
Thank you. The next question is from the line of Anil Shah from Insightful Investments. Please go-ahead.
Anil Shah
Yeah, hi. Am I audible?
Rajesh Khosla
Yes.
Om Prakash Pandey
Yes.
Anil Shah
Yeah, congratulations. Good set of numbers to everyone. Just coming back on the aluminum cans part of the business. Just correct me if I’m wrong, you said current demand is about 3.5 billion cans in India. Is that correct?
Sandeep Sikka
Both demand and supply?
Anil Shah
Supply-demand. Okay. And the two main competitors, which is Bell and the other — from both the Americans, they would be supplying 50% of the current demand. Is that correct though there are overall 40
Sandeep Sikka
No, no, no, no. No, no.
Anil Shah
Okay.
Sandeep Sikka
They will be — they are — they both are sharing the total market as on today. As on today.
Anil Shah
Sorry, sorry, they are both.
Sandeep Sikka
They both are sharing the total market as on today.
Anil Shah
Oh, okay. Okay. But you said there were 42 competitors. That’s what I was just —
Sandeep Sikka
No, no, no, no, no. I didn’t say. I think maybe I have misspelled or maybe wrongly understood. I didn’t say 42 competitors. There is no 42 competitors.
Anil Shah
Okay. So there are two of them which are sharing and both of them,
Sandeep Sikka
We are going to be the third one.
Anil Shah
Yeah, but you said also, is it correct that you said both of them are expanding, one by 600 million and the other billion.
Sandeep Sikka
Yeah.
Anil Shah
Yes. So incrementally, almost the existing demand is new capacity is coming up in the next three years.
Sandeep Sikka
The demand is expected to double and triple in the times to come.
Anil Shah
Okay.
Sandeep Sikka
So whatever capacities they are expanding and whatever capacity we are bringing, the market should be able to absorb the full capacities.
Anil Shah
Right.
Sandeep Sikka
So I’ll give you a little perspective. I’ll give you a little perspective. In the USA, the penetration level of can is 55%. In the UK, the penetration level is 50% to 55%. In Brazil, it is around 50%. In China, it is around 40% to 45% and in India, the penetration level is 4% to 5%.
Anil Shah
Yeah. So when you say penetration level, what are you comparing it with penetration —
Sandeep Sikka
Penetration level means if the liquid is filled in 100 containers, in America, 50 containers are of aluminum
Anil Shah
Cans. Okay.
Sandeep Sikka
In China, it is of 40 containers are of aluminium.
Anil Shah
Understood.
Sandeep Sikka
And in India, the 4th-quarter. Four containers are of aluminium,
Anil Shah
Right. So we need to see a much faster move towards aluminum.
Sandeep Sikka
Yes, yes. Yes,
Anil Shah
That’s the call. And that would be moving from whatever it could be moving from —
Sandeep Sikka
So it is — so this industry looks to us, it is more on the supply-side. So this industry is constrained on the supply-side, strangulated on the supply-side rather than on the demand-side.
Anil Shah
Got it. Got it. And I understood that, sir. And one more question, just as a follow-up on the same is, have we — have we booked any of our capacities with some of the existing relationships that we have?
Sandeep Sikka
Are it’s already going on. So I cannot share the present status, but I think is going to be there,
Anil Shah
So right. And you know, would either of these two players have any other advantage versus us in terms of are these — are these players backward integrated into aluminum itself or
Sandeep Sikka
No. No. No. The only advantage is they are ahead of us. We are entering now, they have entered long-time back.
Anil Shah
Okay. But we do have the relationships, so that should not be a problem to get off
Sandeep Sikka
Absolutely, absolutely,
Anil Shah
Right? That’s fine. And so one small bookkeeping question. Our employee cost in this quarter has slightly gone up to about INR65 crores versus year-on-year and quarter-on-quarter. So is it — this is the quarter that we do a variable payouts? Is that so or is there some slight
Sandeep Sikka
Variable — yes, variable pay, then there are increments and increase and then since we are increasing even the futuristic increase, we have to build-up our manpower and structure for everything. So all those expenditures
Anil Shah
Understood. So can it — so can we say that most of that has happened in the first-quarter itself in terms of the variable payout and the increments and from the next going-forward in the rest of the quarter, it should be relatively.
Sandeep Sikka
It should be more stable. But since we are entering into new ventures,
Om Prakash Pandey
So the part is there, which will continue.
Anil Shah
Sorry,
Om Prakash Pandey
But the increment is a permanent element in the —
Anil Shah
No , but one-time in a year. So possibly it’s come in this quarter, it will further increase in the next 3/4 till the next year may not be that
Sandeep Sikka
Because we are increasing our business and we are expanding our structure. So one is the increment part, second is the variable part. Third is the increase in manpower. Fourth is restructuring also to take care of the future businesses. So all those factors are adding up with that. So there are some investments which are being done on the manpower side for the future growth.
Anil Shah
Understood.
Sandeep Sikka
Yes,
Anil Shah
Understood. And so both these new — both the competitors on the aluminum can side are brokering aluminium again from the same list that you mentioned in terms of novelous US?
Om Prakash Pandey
Absolutely, sir. They are also brokering from right now. So right now, only if I exclude China, so these are the three people which are available in the market, sir.
Anil Shah
Right. Okay, sir. Thank you and best luck. Thank you so much.
Om Prakash Pandey
Thank you, sir. Thank you.
Operator
Thank you. Thank you. The next question is from the line of Saurab Manchandana from DSSK Global. Please go-ahead.
Unidentified Participant
Hi, hi. Hi, congratulations to the management firstly. So I have a quick question. You just mentioned previously that the aluminium can penetration is India is about 4% to 5%, correct?
Rajesh Khosla
Yes.
Unidentified Participant
Okay. So going for — of course going-forward this would increase, but would this hamper say a lot of your customers might move to aluminum? Would this hamper your glass container sales or pet sales in any way? Would those numbers go down?
Rajesh Khosla
Yeah. We are not very big in the pet bottle sale. So that is one part. And in whatever segments we are in pet bottles, it is more or less stable. So coming back to on the glass side and aluminum side, yes, we are aware that the trend is moving towards the aluminum, but that does not mean the trend is not there in glass at all. So if any of the segment, the growth is getting 100%, okay. So the — on the glass side, it will be slightly less. And on the aluminium side, it will be slightly more. But those numbers we have already incorporated in our growth trajectory in the glass side and the same numbers we are capturing in the aluminum side. So those — so we are working with those numbers. So those numbers are not anything new or very surprisingly new for us.
So we know these numbers. And all the packaging segments, they will have their due share and all. So aluminium is just filling the pipeline because it has entered newly into this area. So they have to fill the pipeline whatever they have not been able to do that because of non-availability.
Unidentified Participant
Okay. Okay. Okay. Okay. Thank you. That was my only question.
Rajesh Khosla
Thank you.
Operator
Thank you. The next question is from the line of Mohata from Sequent Investments. Please go-ahead.
Unidentified Participant
Good afternoon, sir. Sir, my question is on the other income side. So our other income since last two quarters has increased quite drastically compared to the previous year. So is there any particular reason for that?
Rajesh Khosla
MR.,
Om Prakash Pandey
We have disclosed like in the last quarter, Q4, it was more on account of the subsidy. And this quarter, we have received one of the — there was a fire and we got an insurance claim if you see note number two and three of our published results so you would know about it
Unidentified Participant
Okay sir. That will be all. Thank you.
Operator
Thank you. The next question is from the line of Sheth from Ara Investors. Please go-ahead.
Unidentified Participant
Hello. Am I audible?
Om Prakash Pandey
Please go-ahead.
Unidentified Participant
Yes. Congratulations on the great set of numbers. I just had one question as to where do we stand-in the debottlenecking process? I assume it with the two furnaces in the glass side.
Om Prakash Pandey
Can you go again with your question I couldn’t understand fully. I wanted to know that where do we stand with the d
Unidentified Participant
Ebottlenecking? I assume it was to be done for the two furnaces. So by when can we expect that to happen?
Om Prakash Pandey
One debottlenecking and the expansion of the furnace got completed in FY ’24, another one got completed in FY ’25. So they were already done last — in the last two years.
Anil Shah
Okay. So there is no debottle happening right now, right?
Om Prakash Pandey
I think the next mining is coming up in after two to three years now.
Anil Shah
Okay. And monetarily, how much do we expect to benefit from that
Om Prakash Pandey
Oh.
Rajesh Khosla
No, I think I think it’s very difficult and whatever is going to get a monetary benefit you are going to see in the balance sheet in the coming quarters, ma’am.
Unidentified Participant
All right. And I have one more question. For the aluminum, for the other two players that you mentioned, ball and the other one, since they’re both in American companies, are we the only one who are like — who is an Indian company that would be manufacturing this?
Rajesh Khosla
Yes, ma’am.
Unidentified Participant
So
Rajesh Khosla
Yes, ma’am, you’re right.
Unidentified Participant
So do we have any additional benefits to it when it comes to manufacturing?
Rajesh Khosla
See, ma’am, as far as benefit is concerned, I think so, since we are into the glass business already and we are deep into the glass business. So we understand the packaging needs very well. So we have a relationship, people — we can give a single platform to all the packaging need of the people. So certainly, we are going to get the advantage.
Unidentified Participant
Right, right. But if it comes to manufacturing, do we have any other incentive over there?
Rajesh Khosla
No. So they are — they are — the technology is quite standard. And at the end, I can say be Indian by Indian.
Unidentified Participant
Of course. Sure, all right. Thank you so much.
Rajesh Khosla
Yes.
Operator
Thank you. The next question is from the line of Kunal from FBC. Please go-ahead.
Unidentified Participant
Hello, am I audible?
Operator
Yes
Unidentified Participant
Just to extend the conversation that the last question I was having it’s a little difficult to understand that the aluminium can business is dominated by two American companies when this business does not seem to have any, any kind of barriers-to-entry like access to raw-material or it is not a huge capital capital requirements though it is for you, you are committing half of your net-worth to this opportunity. It is not a patented project or an opportunity. So coming back to the question, why is this why is this business — why does this business not have more players and maybe even some unorganized small-scale players entering this business and you said yourself that the only advantage of the two players is that they were ahead of you.
So it can be stated another way that it’s your advantage when you enter this business, will your advantage be own over the fourth player B only that you were ahead of them.
Rajesh Khosla
Okay. Number-one, we are talking with respect to India. They are the global players. They have been all-around the world and whenever we can was introduced in the world, so they have been into this market. For example, one player is the biggest player in the world. They are almost 50% of the world market is captured by them. The second one also has quite a big presence globally and they are doing it. And they have come to India and they are selling with that. Yes, there is no barriers, but I don’t know-how we call a barrier. For example, putting INR1,100 crores is quite a big barrier for — for a lot of manufacturers to come into this area. Number two area, this area needs a very strong, strong understanding about the packaging industry, which fortunately because of the glass, we are quite convergent and we will take the advantage of the same.
Relationship with the customer, understanding about the market, complementing the products, giving both the things on simultaneously. So all these are advantages which become the barrier for the others to come is there rest I can say it’s not like that. It is such a barrier. Nobody else can come. Of course people can come, but they will come with their own risk with their own problems have there been any — have there been any Indian companies that have tried to enter this segment before? Fortunately, we will be the first one in the world, an Indian company entering can business. So before that, it’s not like that. Before that, there were Indian companies in India, they tried to produce a long, long back. I’m talking of, 20 25 years back and they were not able to successful. At that time, the technology was not much available there. So they closed down and it was over.
Unidentified Participant
Okay, so the world gover, the situation is similar that these two companies nominate their markets that
Rajesh Khosla
No, no, no, no in if you talk about the world, they are quite a big companies. It’s not only these two companies, there are six, seven, eight big companies we can talk about, they are available. In China, there are so many local companies are there. So India is a market which is getting matured. I say penetration level is only 4% to 5%. So once the penetration level goes up, possibly there may be more companies which can come. But then we will be ahead of them and we can certainly capture the growth whatever is going to come there.
Unidentified Participant
All right. Got it, sir. Thank you very much for your answer.
Operator
Thank you. The next question is from the line of Paras Chheda from Vertex Ventures Limited. Please go-ahead.
Paras Chheda
Thank you, sir. And congratulations for the great set of results. Sir, I joined this call a little bit late. So apologies for that. Just wanted to understand, sir, what I heard that we are looking at a expanding to 2.5 times our business size over the next five years, right? So approximately about INR6,200 — I mean in that crore-plus over five years. And secondly, the other thing that I understood is that over the next two, three years until lease to new capacities come to fruition, we would probably grow by about 8% to 10% in that region. Is that correct, sir?
Sandeep Sikka
Yes, please.
Paras Chheda
Okay. For the next two, three years, that will be about 8% to 10%. The asset turnover for the — yeah, please go-ahead, sir.
Om Prakash Pandey
Facility should be ready. And within 2.5 years, the first phase of aluminum can should be ready.
Paras Chheda
Right. So on current capacities, we are almost 90% utilized and there is some scope whatever. So 8% to 10% is what we can stretch for the next two financial years. Let us put it that way. Is that correct?
Om Prakash Pandey
Yes, that is on account of, you know, we can — we have an ability to upscale the product mix. So our focus on value-added products and also there is a capacity which is unutilized on the specialty glass, which we can use.
Paras Chheda
Right.
Om Prakash Pandey
And apart from this, we are also trying to see that how we can further debottleneck the existing facility so that we can touch almost 100% or maybe slightly more of the capacity, whatever we have.
Paras Chheda
Right. So for the next two years, there is a bit of stretch and of course these units come on and then there is growth potential. The other thing, sir, what I understood is, so until FY ’27, at least we are about 8% to 10%, the asset turnover for the aluminum can business would be about 1.2 times. Is that correct, sir? So that means about INR1,200 crore business?
Om Prakash Pandey
Glass generally gives — has a potential to give from 0.9 to 1.1 times of the asset value. And aluminum is somewhere touching 1.2 and 1.2 is also depending on input aluminum price because aluminum is a pass-through here. So for this, if you see like this is a horizon of five to six year which we have talked about, there’ll be some cash-in the system, which will inform all these businesses. Right now, we have a run-rate run-rate of a free-cash flow. So we’ll utilize all of them for the next level of growth also.
So we’re not stopping here in terms of growth. So growth will continue with all the earnings which we are going to generate.
Paras Chheda
Right, sir. So let’s — so I’m just trying to put things together for my own self. So INR1,200 crores kind of a range on an annual basis from the cans business eventually whenever we hit optimal capacity on that, in that region, let’s put it that way, right? And we are at the moment doing about 2.5 and we could probably go up to about INR3,000 odd crores basis 8%, 10% incremental debottlenecking over the next two years. So that’s about INR4,200 odd crores. So another INR2,000 crores that comes from — one is the, of course the other expanded glass capacity, but how much would that add, sir?
Om Prakash Pandey
So that is against one-time. So if you’re investing INR700 crores, we can generate INR700 crores INR700 crores correct. And with all the — with all the — it’s not something that we have stopped the investment here. With all the cash flows, because of this is going to yield a substantial cash-flow. So we need to deploy that also. So that will also be deployed in terms of debottlenecking the facilities or you know or maybe doing some acquisition maybe two, three years down the line, so which can actually take us to around 2.5 times.
Paras Chheda
Right. Because bulk of the capacities are going to come a little bit back-ended, you know and therefore your cash generation also and you will have to also invest into these capacities. And so incremental cash for further acquisitions, I’m just trying to understand,, hitting that 2.5 times or that number could be a stretch, I mean broadly.
Om Prakash Pandey
So if you see, you know, we now generate from operations, if you see in the past also, in the last three years, we have paid-off debt of around INR607 crores — INR700 crores. We have done capex for the last years without any debt and the net-debt level is right now at INR200 crores. So substantial amount of cash generation has happened in the system. Now given the fact that the old debt is just INR200 crores right now, which will be paid-in next 12 to 18 months. So whatever we generate in the system will go as an internal accrual towards and debt for the creation of these facilities. And once the facilities get created, they will also throw the EBITDA out. The old facility debt-free, that is surplus, surplus. The incremental money which we are going to generate with all the investments that is also going to throw up in the cash balance now.
Paras Chheda
Understood. Right. And sir, is this a steep jump that has happened in FY ’23 and FY ’20 — basically FY ’23 from odd to INR2,200 odd crores, that was basically on the back of a significant expansion, is it?
Om Prakash Pandey
It’s a mix of everything. It’s a mix of an expansion, mix of debottlenecking, mix of our improved efficiency we had Mr Khosla was saying, we had taken maybe more than 30 40 projects wherein we have improved our quality, efficiency, production efficiency, furnace throughput. So it’s not just one factor. It’s a mix of combination of many factors wherein you are seeing this. And also we have upgraded the mix, the product mix has changed. The focus on the high-value added items has increased. Our ability to use better fuel mix, that also is the factor.
Paras Chheda
So right. And sir, just last bear in mind, in terms of aluminum can business as and when it happens, I mean, sort of what is the plan in terms of hedging this raw-material pricing and managing the risk-on that side. So how does that generally work? I mean,
Om Prakash Pandey
So in this can industry, generally what happens is what you try to do hedging is by matching the quantities. So the customer will give you order-based on certain specific month-wise — month-wise quantities and a month-wise price. And then you manage your intern the and hedge. Yes. So you hedge by way of metal quantities rather than giving a hedging cost.
Paras Chheda
Right. And these cans can eventually again be sort of recycled back into the system. The capacity that will come in, we’ll be able to use recycled metal?
Sandeep Sikka
No. Once the can is used, it is out-of-the system. And then this can be recycled not by us, not by our user, but only by the coil manufacturer, which can use it. Otherwise nobody else in-between. Or if somebody use it, melt it and make some other products, then it is out-of-the system. So practically for all practical purposes, you can assume that cans will always be out-of-the system. Once used out-of-the system, but they are 100% reusable. Sorry.
Paras Chheda
They are not recycled and is what
Om Prakash Pandey
It may not be in the same industry? Yeah, may not be in the same product, but in some different product.
Paras Chheda
Understood. Understood. Okay. Thank you very much. I’ll just come back-in the queue.
Operator
Thank you. The next question is from Srisankar Radhakrishnan from EIP. Please go-ahead.
Unidentified Participant
Gentlemen, congratulations for the continued good performance. Quick two questions. Your ROCE has consistently improved in the packaging products of up to 23% in FY ’25. What are we looking in terms of an ROCE for the aluminum cat business? And I’m assuming that in last days that you are going to have expansion will continue to remain at these levels. So what’s the ROC that you are expecting in the aluminium business?
Om Prakash Pandey
Rajesh, you will take. So
Rajesh Khosla
You replied. No problem.
Om Prakash Pandey
So I think the whole right now we are at an ROCE ranging 18%, 19% from the overall operations. This is despite the fact that major chunk of our assets are also you know which are relating to old land parcels which are there. But if you see the operational efficiency from the glass plant and the other investment, it is actually more than 20%. The investment which we are doing on glass should have a very-high ROCs in ranging 25% plus. And the investments which we are doing in the aluminum cans, generally once it is — once the full capacity is achieved and full scalability is done, it should be ranging around 17% to 19%.
Unidentified Participant
Okay. Question, can I ask what will be the ROI from the alluminate that you?
Om Prakash Pandey
So ROA is more from the perspective of project IRR if you are trying to say, because the return-on-equity can be different, but what I can tell you is project IRR.
Unidentified Participant
I was asking you about ROI in that
Om Prakash Pandey
14% 15% ROI.
Unidentified Participant
40%, 15%. So you expect a 60-year return of the investment?
Om Prakash Pandey
Yes. Once the whole — in the entire packaging segment, like if you are entering into a segment where — where the capital intensity is lower, you know, then the investment is more risky in the sense that entry barriers are very few, then anybody can put a capital and they’ll come in. And that especially happens on the PET vehicles business. But here we are making strategic investments and we are piggy banking on our very strong right to win with our customers, which we are dealing with almost for four decades now. And in fact, with good alignment and ability to deliver the quality product and also give a customer — give a wholesome solution like we have not only glass bottles, we have — we’ll have cans, we’ll have security caps and also the pet bottle.
So we’ll be providing wholesome solution to our — the customers with the way they want to address it, we should be able to offer them. That’s the biggest advantage which we can have and that’s the biggest right to win is which the whole — the plan has been?
Unidentified Participant
Okay. And all these capacities coming up in the facility or land you are acquiring right now or already these land with you?
Om Prakash Pandey
So we have shortlisted various land parcels for both the projects. And right now, we advanced-stage of closing those stuff and after which the negotiation with the equipment suppliers are also very advanced-stage. So once the whole thing is done, immediately it will come into the execution stage. The Board has just yesterday approved it. So after that, the things will move very fast now.
Unidentified Participant
Okay. Thank you very much and all the best to you.
Om Prakash Pandey
Thank you.
Operator
Thank you. Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand over the conference to the management for closing comments.
Om Prakash Pandey
I thank you all of you for joining us on the call today. Maybe a few of the questions are still left answered, unanswered maybe, but I think most of the questions, if I would have in an investor, so I think we would have answered. So if anything left, I think you can get back to our agency and Investor Relations agency and we’ll be very happy to make a response to the same. Thank you very much. Thanks again.
Operator
Thank you. On behalf of AGI Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines