Ester Industries Limited (NSE: ESTER) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Gavin Desa — Investor Relations
Vaibhav Jha — Deputy Chief Executive Officer
Pradeep Kumar Rustagi — Executive Director, Corporate Affairs
Sourabh Agarwal — Chief Financial Officer
Analysts:
Jatin Damania — Analyst
Krushna Parekh — Analyst
Aditya Vora — Analyst
Saket Kapoor — Analyst
Presentation:
Operator
The conference is now being recorded ladies and gentlemen, good day and welcome to Esther Industries Limited Q3 and 9M FY ’25 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 the conference call, please signal an operator by pressing star zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Gavin Desa from CDR India. Thank you, and over to you, Mr Desa.
Gavin Desa — Investor Relations
Thank you,. Good day, everyone, and a warm welcome to Industries Q3 and nine months FY ’25 Analyst and Investor Conference Call. We have with us today Mr Japuty CEO; and Mr Pradeep Kumar, the Executive Director of Corporate Affairs. We will begin this call with opening remarks from the management, following which we will have the floor open for an interactive Q&A session. Before we begin, I would like to point out that some statements made in today’s discussions may be forward-looking in nature and a note to this effect was sent to you in the area. We trust Chancell go through the communications and financial performance. I would now like to invite Mr Shah to make his opening remarks. Over to you,.
Vaibhav Jha — Deputy Chief Executive Officer
Thank you. Thank you, Gavin, and thank you, everyone, for joining us today. I will briefly talk about the key business developments post which Mr Pradeep will walk you through our financial performance. I’m pleased to report that we have not only sustained the business momentum of the previous quarter, but have in fact further accelerated it as can be seen from our margins and profitability. While both businesses performed well, film business in particular registered a solid performance, especially with regards to both margins and profitability. This was on the back of better product and market mix. Specialty Polymer business as well registered a healthy growth on year-on-year basis. So now let me move over to the individual business performances. Starting with specialty Polymers, the business registered a strong Y-o-Y growth. The growth was primarily due to strong demand of our marquee products, MB-03 and innovative PBT. For the quarter, our over volume — overall volumes of sales excluding RPET was around 785 metric ton, almost 40% higher compared to Q3 FY ’24 volumes of 558 metric tons. On a nine-month basis, volume excluding ARPET stood at 2610, 2,610 metric tons compared to 1,683 metric tons achieved in nine months FY ’24, higher by 55% on a year-on-year basis. In terms of our key products, MD03 volume stood at 202 metric tons during quarter three of FY ’25 as against 153 metric tons during quarter three of FY ’24. Volume of sales of innovative PBT for Q3 FY ’25 stood at 333 metric tons as against 214 metric tons of Q3 FY ’24. Specialty polymers, as previously mentioned, are primarily produced for sales to overseas customers with a substantial share of its sales directed towards client in USA and China, the primary application of these products are within the scarpet and consumer electronics sectors. From a margin and profitability standpoint, the business remains largely protected due to intellectual property safeguards associated with its key products. Looking ahead, we anticipate that the business will maintain its growth momentum in the coming years, supported by a promising product pipeline and human capital to pursue aggressive and focused marketing strategy in order to achieve the growth that we are targeting in this segment. Now about film business, Q2 was a turnarout quarter for the business. Q3 significs a resurgence in both margin enhancement and overall profitability. As many of you know, the industry faced significant challenges characterized — characterized by ongoing losses due to pricing pressures over the past few years. Many new capacities were introduced over the last two years and that had created substantial oversupply, which has exerted downward pressure on pricing and profit margins within the films market. I’m extremely pleased to report that we are now witnessing an improved demand-supply scenario, which in-turn is translating into better pricing and margin environment. Despite the middle digit — mid-single-digit volume growth during the quarter, we were able to achieve improved margins and we’re also able to deliver significantly better profitability and due to better product mix that we were able to achieve. Increased export of high-margin value-added products during the quarter led to overall better profitability for the business. To quantify, on consolidated basis, exports registered a volume growth of 5% during Q3 FY ’25. Furthermore, on consolidated basis, the share of value-added — value-added products as well stood at around 27% during the quarter as against 16% in Q3 FY ’24. Various initiatives to transform Esther from a commodity player to specialty film players are being pursued diligently. Our wholly-owned subsidiary Ester FilmTech generated revenue of rupees INR90 crores with volumes of 698 metric tons during the quarter. We expect the entity to deliver revenues of approximately INR360 crores in the current fiscal and INR450 crores to INR500 crores upon achieving optimal utilization at reasonable price and margins during next fiscal. Further, in addition to improved demand-supply environment and better product mix, also the plastic waste management rules mandating utilization of 10% recycled content in flexible packaging laminate coming into force from next year is expected to further increase demand for polyester films with conversion taking place from other substrate to polyester. As regards to the JV with Loop Industries, I’m pleased to report that it is advancing according to the established timeline. Collaborative teams comprising members from both and Loops have been established to execute the plan and oversee essential functions such as detailed engineering, project setup, raw-material — raw-material procurement planning and financing. Our objective is to initiate commercial operations the second-quarter of calendar year ’27, JV Company ELITE, which is Elite Luke JV has been capitalized by an amount of INR17 crores, each contributed as equity by INR8.5 crores, each contributed as equity by Ester and Loop. So both Esther and Loop have contributed INR8.5 crores and the JV now has INR17 crore of equity available with it. In conclusion, we expect a markedly improved operational and financial performance in the current fiscal year compared to the previous one. Specialty Polymer continues to demonstrate strength and potential. Likewise, the prospect for the film business supported by a more stable environment appears encouraging. We are assured that both of our SBUs are well-positioned for growth and value enhancements. The collaboration with Loop, groundbreaking and transformative initiative is poised to facilitate profitable growth for the company moving forward. So that concludes my opening remarks. I now hand over the floor to Mr Pradeep to walk you through our financial performance. Over to you, Mr Pradeep.
Pradeep Kumar Rustagi — Executive Director, Corporate Affairs
Yeah. Thank you and good day, everyone. Thank you for joining us on our quarter three FY ’25 earnings call. Let me quickly walk you through our financial performance, post which we can commence the question-and-answer session. I would like to start with financial performance of Esther Industries. Total income on a standalone basis stood at INR277 crores as against INR211 crores in the corresponding quarter last year. That’s higher by 31%. The primary reason for the growth is the strong performance of both our businesses. EBITDA during the quarter under review, including non-operating income stood at INR44 crores as compared to loss of INR1.2 crores during Q3 FY ’24. EBITDA during nine months ending nine months FY ’25 and stood at INR98 crores as compared to INR14 crore during the corresponding period last year. Coming to the financial performance of wholly-owned subsidiary Ester Fintech, the revenues stood at INR90 crores as against INR99 crore in Q2 FY ’25. Reported EBITDA during the quarter under review, including non-operating income stood at INR22 crores as compared to INR6 crore during the Q2 FY ’25. EBITDA during nine months FY ’25 stood at INR29 crores. In terms of sales in volume metric tons, Fintech sold 6,698 metric ton of film during Q3 FY ’25 with the pricing and margin trend improving and demand-supply mismatch narrowing, we are confident that Femtech will contribute positively to the overall growth of the business in coming years due to state the art plant and machinery and low operating costs. We expect the unit to generate revenue worth INR450 crore to INR500 crores at reasonable prices and margin upon achieving optimal utilization by FY ’26. On a consolidated basis, EBITDA for the quarter stood at INR65 crores as against negative of INR15 crores generated in Q3 FY ’24. On nine months basis, we could earn EBITDA of INR125 crores as compared to negative INR6 crores earned during Nine-Month FY ’24. On a consolidated basis, we could earn profit-after-tax of INR25 crores as compared to loss of INR45 crores incurred during corresponding quarter last year. As articulated by, we possess a strong confidence in the growth potential and value generation of both our SBUs, specialty polymer has demonstrated its potential for growth, while the film division is exhibiting enhanced performance characterized by favorable pricing and margin trends. The significant increase in-demand for film is contributing to a more balanced demand-supply situation. Our collaboration with Loof Industries is anticipated to be transformative. Once operational, it is expected to significantly impact our growth path and profitability. That concludes our opening remarks and we can now commence the Q&A session.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the 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’ll wait for a moment while the question queue assembles first question comes from the line of Jatin Tamania with Swan Investments. Please go-ahead.
Jatin Damania
Good evening, sir, and thank you for the opportunity. Sir, first of all, congrats on good set of numbers. Sir, first question would like to understand on.
Pradeep Kumar Rustagi
Your handset?
Jatin Damania
Okay. Hello, sir, now am I audible?
Pradeep Kumar Rustagi
It’s better now. It’s better now.
Jatin Damania
Yeah. So sir, first question, just wanted to understand on the market demand-supply scenario because in your opening comments, you alluded that a couple of new capacities were set-up in the last two years, which had weighed on the pricing. And what — so just wanted to understand the current demand-supply dynamics in terms of the mismatch, what is it right now and how are we seeing it one year or two years down the line?
Vaibhav Jha
Thank you. So thank you for the question. So basically, what has happened was that their capacity growth was more than the demand growth in last couple of years. And now we are — we are seeing a quite a decelerated pace of capacity addition, maybe one or two lines this year and then another line in subsequent year. So this is making the market more balanced with respect to supply-demand and therefore, we expect that this recovery should continue and the margins should stabilize given that the supply-and-demand are now coming closer to each other. Also, the other thing that we are expecting is from 1st of April, the government is going to implement PWMR rules for flexible packaging. And polyester is a substrate where the recycled content can be much higher than the other substrates. So we expect a pull coming in from the market, which would lead to an increment in the demand much more than what we have seen over last two or three years. So when that happens, it will further help to reduce this gap between demand and capacity. And therefore, we are quite confident that the margin situation should continue to remain stable, if not improve.
Jatin Damania
So sir, in terms of the quantification, if you can probably help us because if we are not wrong in last call or probably a call before that, we had mentioned that the demand-supply match was around 15,000 per month. So has it come down to almost a single-digit or it’s still continue to remain in the range of 10,000 to 12,000.
Pradeep Kumar Rustagi
So it is in that range about 12,000 to 15,000 tonnes a month is the overcapacity. So there is a domestic demand and there is certain amount of exports happening from India. So we are left with a surplus of about 12,000 tons a month.
Jatin Damania
Right? So secondly, now when you look at the numbers, definitely see now in the demand-supply has narrowed a bit, but there is a substantial improvement in the overall margins for us, both in the standalone business as well as into the. So if you can help us what was the spread in the last quarter and how — what was the spreads currently? I mean, after the Q3 exit?
Pradeep Kumar Rustagi
So one of the reason why the film has done better than the last quarter is that there have been significant improvement in the proportion of value-added and specialty films. On a consolidated basis, both the Esther and Femtech put together, we have been able to to make sales of value-added products to the extent of 27%. So that’s been one of the reason for better performance. And our exports have also increased where the margins were better. So overall higher exports and higher-volume of value-added and specialty films has contributed to the improvement in performance of film business. Of course, the raw-material has been very stable in the last quarter and before that also. So a stable raw-material scenario, increased volume of proportion of value-added products, higher exports, all that has contributed to better performance.
Jatin Damania
Yeah. But sir, if I look at your numbers in the previous quarter, value-added proportion was much higher than what — I mean 200%.
Pradeep Kumar Rustagi
That was for Industries alone. On a consolidated, it was close to 19%.
Jatin Damania
Okay. So that’s about 27%. 19% has gone to 27% in this quarter.
Pradeep Kumar Rustagi
Yes.
Jatin Damania
And how do — and how do we see the ramp-up in this value-added products from a 27%?
Vaibhav Jha
Yeah. So our target is to take it — take it in a steady growth trajectory. And what we are doing right now is we are in the budget process. So we will have a much better idea on what we are targeting for the next financial year-by the time we have the next earning call. But right now, the focus for this quarter is to hold-on to this specialty polymer and make it in the range of, say, 30% plus/minus so that this trend of hype of profitability continues in this quarter at least.
Jatin Damania
So it is fair to assume incremental 30% growth in the value-added products will come from the extra flim type only because we operate at 55% and there we have enough value-added or the operating leverage that can come play in the Q4 and the year-after.
Pradeep Kumar Rustagi
No, it will come from both the companies because the major chunk of the value-added products can be produced only in industries because of the infrastructure that we have. We have offline and other various plant and machinery, which can do the product which Esther Fintech cannot do as of now. So the growth is going to be there from Ester Industries primarily.
Operator
Thank you. MR. Damania, please rejoin the queue for more questions. Thank you. Next question comes from the line of Krishna Parik with Dolat Capital. Please go-ahead.
Krushna Parekh
Thank you for the opportunity. Sir, I have a couple of questions. First one, do you still believe on the specialty polymers we are on-track to do INR200 crores of revenue for this year?
Vaibhav Jha
See on specialty Polymers, indeed, the target was to do INR200 crore top-line as we had shared earlier. But right now, given the way 3/4 have shaped up, we believe that it’s going to be quite tough for us to hit that INR200 crore top-line. And we are looking to come close to it, but I believe that in the end, we might end-up being 10% to 15% short in the top-line target of INR200 crores. So that is what we feel as of now. But we are pushing very hard to make sure that we reach as close to INR200 crores as possible.
Krushna Parekh
Okay. Thank you, sir. The second my question was on what is your demand outlook for in the current calendar year ’25.
Vaibhav Jha
So a part of it was already answered in the previous question, but just for your benefit. See, there are multiple drivers. One is the natural growth which is happening and we have seen in the past that the film demand has been growing in the ratio of 1.5 times the GDP growth rate. So that is one natural growth rate which is there in the film packaging industry. The second part of it is coming from this — our expectation of the PWMR rules getting implemented from 1st of April, which is again likely to give us a flip to the film demand in India. So that makes us very confident that if we take a say a growth of 6.5% in the GDP and multiply it by 1.5%, so 9% to 10% of the growth should in-demand in India should come because of the natural progression, plus whatever growth we get due to the implementation of PWMR would be on-top of that. So we are extremely confident that we are going to see a very, very strong growth in BOPET film demand in the next financial year.
Krushna Parekh
Okay. Thank you, sir. That’s it from my side.
Operator
Thank you. Next question comes from the line of Adity Vora with Share India. Please go-ahead.
Aditya Vora
Thanks for the opportunity. A couple of questions from my side. One was if you could quantify what was the average gross spreads for KG for the quarter, which is the 3rd-quarter, that would be helpful.
Pradeep Kumar Rustagi
So we generally focus on 12 micron commodity films, so the value addition, which is the difference between selling price and raw-material cost, in the December quarter, it stood at about INR43 per kg. But the blended VA for the domestic or export market would be much higher for us because we do various grades — various varieties of film value-added and metalized, etc. So the INR12 micron is about INR43 rupees in December quarter.
Aditya Vora
And what would it be currently in the month of February?
Pradeep Kumar Rustagi
Currently, it is in — it is in the range, same range about 40 42 kind of.
Aditya Vora
And if I have to extrapolate this to the peak, say, during I think COVID, we had a peak in terms of spread, what would the peak be and how far are we?
Pradeep Kumar Rustagi
The peak — the peak that we saw was in, let’s say, March ’22 quarter or June ’22 quarter, it was in the range of INR55 to INR60 a kg. And at that time the volumes were also very-high. This time the volumes are lower, the margins are at about INR40.
Aditya Vora
Okay, okay. And so when we talk about the value-add, which has gone up from 19% to 27%, in that how — can you let me know what could be the gross spread there over and above the normal spread or at the total number.
Pradeep Kumar Rustagi
So in the VASH products, the generally the value addition over and above the 12 micron chrona is in the range of INR45 to INR65 a kg depending on the product mix. The mix, the product that we have in the value-added basket are too many. So it depends on the proportion of sales that we achieve. So range can be over an incremental we are about INR45 to INR55.
Aditya Vora
Right, right. Okay. And sir, secondly, on the specialty polymer business, you said it’s difficult to do INR200 crores. But can you just guide us in terms of strategically where do we see this business? Because if we look at Esther Industries, obviously, majority of your revenue comes from your BOPET, which is a commodity business. I know you’re trying to increase your value-added, but the real juice lies on the specialty volumber business. So in that case, where do we see this business, say, two, three years down the line considering the fact that margins are extremely higher and do we see margins going higher from you? Because I think, 30% 33% is the margin. And just another follow-up on the same. Is that your specialty polymer business is down quarter-on-quarter. So any seasonality is there?
Vaibhav Jha
Right. So just a couple of points. First on the strategic view of specialty polymer that we are taking. So we are completely aligned with high-margin business. This is where, like you are rightly saying, the juice is and not to say that film business is any lesser, but in terms of the outlook for specialty polymer, we definitely want to focus on it more and grow it. Now the challenge is that this — while this market is very attractive, it takes time to establish new products and new customers because of the long approval cycle for any new chemical that we develop. So what we are doing right now is working on multiple leads. The pipeline is very strong and we are expecting them to materialize in due course of time and the focus is going to be on the market outreach to make sure that this pipeline becomes stronger and stronger so that we are able to see significant volume growth. On in terms of the profitability, we think that the profits are going to remain stable around the EBITDA levels of 30%, 33%. The focus will be to retain this EBITDA margins and grow the volumes, which is where we are. So in two to three years timeline, we expect the volume to be significantly higher than where we are today right now. Now your — you had a second question, sorry, can you repeat that?
Aditya Vora
There was the quarter-on-quarter decline in terms of the specialty polymer revenues and also the margins, I think 33% has come to 30%. So is there some seasonality or the one-off order in this?
Vaibhav Jha
There is definitely a seasonality because what we see one of our major clients — sorry, one of the major segments that we target is the consumer electronics segment. And our — the trend over there is that the — the manufacturing of consumer electronics is done in Q2. So the most of the sales happened then. And in Q3 because of the holiday season in the global markets, the manufacturing is on a low-side because whatever needs to be sold-in quarter three has already been — has already been manufactured in-quarter two. So historically, we have seen a seasonality wherein the Q2 volumes due to the consumer electronics effect has been lower than the Q2 volumes.
Pradeep Kumar Rustagi
And coming to the lower EBITDA — EBIT margin for the polymer, so what has happened that if you see there is a significant increase in the volume of sales, that is because of the sale of RPET in the domestic market. The margins in RP that is sold-in the domestic market is lower than the normal especially polymer product. So that has pulled the EBIT down from 33% to 30%.
Aditya Vora
So right, right. And sir, just lastly, since you have seen a lot of cycle, currently, where are we in terms of the BOPED cycle? So I’m assuming that upstick started last year. So when, where do we look at it? Because we have reached, I think 45%.
Pradeep Kumar Rustagi
Only I can answer this now. I have seen many cycles. So what has happened that there is the upturn has started and is likely to continue for, I would say, three, four years because no major new capacity is expected to come before ’27, ’28, only one or two lines are going to come in ’25, ’26. The growth in-demand at about 11% to 12% is going to be — if the industry will need about two lines to come every year. So as the time passes by, we are going to see a significant narrowing of the demand-supply gap. Secondly, the plastic waste management rules is going to trigger a spike in the demand. So we are going to see a much better scenario to emerge in the next, let’s say, years or year-after that. And the good run is expected to continue not less than three years.
Aditya Vora
Okay, sir. Thank you so much for your time.
Operator
Thank you. Next question comes from the line of Saket Kapoor with Kapoor Company [Phonetic]. Please go-ahead.
Saket Kapoor
Namish, and welcome, Mr. Thank you for the opening comments and giving us a brief review and answering our questions, sir. For the first point was, sir, I think so we are also in the process of installing a metric strudder in our Katima plant. So is that also related to this value addition proposition going up? I think so some INR70 crore INR80 crore of capital work-in progress was there at the closing balance.
Pradeep Kumar Rustagi
So we are going to install an extruder in Fintech in Hyderabad for taking advantage of the increased demand or emerging from the implementation of plastic waste management rules. There is no major capex planned in Katima. After FilmTech, there is a extruder to be commissioned, which is likely to be installed by June or July ’25.
Saket Kapoor
Okay. And how will we benefit out of it, sir, but what.
Pradeep Kumar Rustagi
That machine will convert the bottle flakes, PET bottle flakes to granules, which can then be fed into the — as a raw-material in the manufacturing process of polyester film to meet the requirement of PCR contained in the film.
Saket Kapoor
Okay. It will be a backward integration exercise in that.
Pradeep Kumar Rustagi
Yeah, yes, to some extent, yes, yeah.
Saket Kapoor
Okay. And sir, when we — as per your commentary also and since Mr Singhania is not in the call to — firstly, I would like to thank Mr Singhania on behalf of investors that you and have given us the right understanding as the way things were shaping up way back-in the first-quarter and things have been in-line with that expectation — expectations have been met and even better. So congratulations to both of you, convey my regard to sir also and sir, when we look at your — now the way forward, going ahead, what — since we are running at optimum level for our Katima unit and the demand-supply gap of, 12,000, 15,000 will be — will take time to get a balanced. So where will the growth in the segment come, especially where in terms of the higher value-added — value-added proposition and also export? And if you could give some color how the mix is going to be going — going ahead in the next quarter and the way forward.
Vaibhav Jha
So you mean the current quarter, right?
Saket Kapoor
Yeah, current quarter, especially also going ahead also, sir.
Vaibhav Jha
So see, in terms of domestic demand, we know it’s growing, but there is definitely the supply overhang, which is receding as we speak, right? So in terms of domestic sales, we expect that the domestic sales should remain in the range where we are right now, but we are expecting to see an improvement in the export sales in this quarter. So I would say that while there will be some improvement in the domestic sales, we are expecting a better improvement in the export sales quarter.
Saket Kapoor
Okay. And you have thrown the thrust and the weight on value-added flim segment. So sir, actually what has exactly been in favor of these value-added claims are the product mix or some type of orders that we are executing due to which the proposition has gone up and where should it be on a on a conservative basis going ahead?
Vaibhav Jha
Yes. Yeah. So in terms of value-added products, see, these have long gestation period. And once you develop a product, it takes anywhere close to one year to one and a half year to establish it. So the pipeline which we had built earlier, they are slowly materializing as we speak and that has led to a fruition of some of the value-added sales that we are seeing right now. In terms of the growth path we are looking at, you know in this quarter, I already mentioned that our focus will be to hold 27% WAS share and probably grow it to the range of 30%. What we are going to do next year, we are still working out on the details as a part of our annual operating plan and we will be in a much better position to give you an outlook for next financial year-by the time we are ready for the next investor call. So please bear with us till then and we should have a much clearer picture by the next call.
Saket Kapoor
So two small points and I’ll join the queue. Firstly,, if you could give us the net-debt numbers and I think so the rating has also been given some changes last — in the month of May. So after these numbers, when are we opting for a rating review and what is our current cost of fund?
Pradeep Kumar Rustagi
So as far as rating is concerned, we is A-minus and Esther Fintech is BBB. We are targeting — we have been in discussion with the rating agencies and we are talking to them to consider an upgrade and we have a strong case to pursue that. And basically December result that we have just declared and the expected performance of March, we expect some improvement in the rating from our rating agency. As far as net-debt is concerned, it is standing at about INR600 crores as on 31st December ’24. But consolidated. This is consolidated INR600 crores, including working capital, both for Estra Industries and. So it’s my long-term borrowing breakup top-line. Long-term would be about INR400 crores and working capital would be about INR200 crores.
Saket Kapoor
And our current maturities, March that may be.
Pradeep Kumar Rustagi
March quarter there is hardly an amount to be paid INR3 crore to INR4 crores. Next year it is INR50 plus 35, INR80 crores to INR85 crores.
Saket Kapoor
Okay. And sir, now one small point and on the — this loop part of the story, I think so it’s a big project that we have undertaken considering our size of operations to — at today’s valuation at $165 million, it runs around INR1,500 crore capex and in an uncharted, if I may use the word, since the product understanding and the business profile is very unique, has a unique proposition. So what is the management objective? I think sir is not here, but I think to, you would be able to give or convey to him that next time when he is there, he gave us some much more understanding because this is going to be a bigger risk, if I may use the word quote-unquote. In terms of the size of the business that we are trying to inculcate the profile into the company. And out of this INR1,400 crore INR1,500 crores, how much will go into land, plant, machinery, technology, if some breakup, some understanding further would be provided to us that would give some more inputs.
Pradeep Kumar Rustagi
So first, coming to the size of the implementation, INR15 crore appears to be big, but we have done projects about INR700 crores all alone. But this time we have a joint-venture partner who has developed the technology, who has a pilot plant running, who is looking after the marketing and shares arrangement. So we don’t see any major issue in implementation of the — or commissioning of the plant and plant. As far as the funding is concerned, the breakup of INR165 million for you? You have ready numbers. So yeah, just — so it is INR165 million, close to INR1,400 crores to INR1,500 crores. It will be funded through debt and equity. Equity will be 40%, 60% will be debt. And the 40% equity is going to come equally in equal part from and. So it is going to be INR280 crores each from as per Industries and per — sorry, loop. As far as breakup is concerned, how the INR14 crore is consisting of building land, etc., that forum will be.
Sourabh Agarwal
So roughly around INR90 crores is for the land part and around INR1,000 crores is for the plant and machinery, which we are planning in this and the balance part is your GST and interest during construction, et-cetera.
Saket Kapoor
Okay. And lastly, Pradeepdi, there was an INR8 crore exchange fluctuation impact in the LimTech because of restating of loans. So it’s been net of that, that would give a better understanding for the PBT numbers, the PBT number on a consolidated basis was INR31 crores. So that had a INR8 crore additional impact. So other number of operational numbers so we should eliminate the same.
Pradeep Kumar Rustagi
Yes. So whatever impact was there in the second-quarter, INR8 crore in Fintech on account of reinstatement of foreign currency loan that we have taken from OLB, that entirely got reversed in Q3. So the EBITDA of SF Fintech was hit adversely by INR8 crore in Q2. Now that has been reversed in Q3. So we — if you eliminate INR8 crore from the performance of Astra Fintech, we would be standing at about EBITDA margin of 16% to 17%. For Astra Fintech and remains the same.
Operator
Thank you. MR. Kapoor, please rejoin the queue for more questions. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Jatin Tamania with Swan Investments. Please go-ahead.
Jatin Damania
Hello.
Pradeep Kumar Rustagi
Yeah.
Jatin Damania
Yeah. So sir, just wanted to majority of the questions have been answered. Just wanted to understand our margin profile in the standalone entity. So can you help us how does the margin differs into the — in our business as a chip business?
Pradeep Kumar Rustagi
So you are talking of chips business for film, which is captively consumed and made small quantity fold or you are talking of film and especially polymer.
Jatin Damania
So fleams and the chips which we captively consume because we sell such a INR30-odd crores of it.
Pradeep Kumar Rustagi
The major quantity is captively consumed. It is hardly — it has hardly any contribution margin. The contribution margin is not then — not more than INR2, INR3 a KG. So it’s an intermediate product primarily produced for captive consumption or consumption in, a very small quantity is left with us that is sold into the customers outside of Esther and.
Jatin Damania
So that means the entire margin of standalone entity is largely a polyester margin, which a film.
Pradeep Kumar Rustagi
Yeah. Chips is hardly anything. It is just addition to the top-line, nothing to the bottom-line.
Jatin Damania
Sir. And sir, secondly, now when you guided, I mean, it is good to hear that we have raised our guidance for a business from INR300 crores to INR350 crores of the top-line for this year and INR400 crore INR450 crore to INR500 crores of crore next year. So if we consumer next year, what will be our rated capacity utilization for FlimTech? And are we on a sustainable basis, we’ll be able to make 18% to 20% EBITDA margin in, which we reported in the Q3.
Pradeep Kumar Rustagi
So coming, we are currently operating at about 55% to 60%. Going-forward, we could see an increase of about 10 percentage point in the capacity utilization and the EBITDA margins at the current prices and the margins that are prevailing, we should be able to sustain that because the fixed-cost remain will remain the same. So only the variable-cost will be incurred to achieve higher sales. So we expect the EBITDA margins to be sustained.
Jatin Damania
Okay. And sir, in export, I mean, definitely you indicated that the current quarter export will be good and there is a huge visibility for FY ’26 also. So do you have any rough order book in terms of the export order that is there in the pipeline or probably are we bidding for something or a couple of customers which are already have tenders or things. If you can throw some light on that?
Vaibhav Jha
If we are see the export business that we have established so-far, that is a very recurring kind of business, right? It’s not a tender-driven business as such. So basically, once you have established a product with a customer, then you get into the repeat business mode. So we have that proven pipeline, which we have executed in-quarter three and we expect that pipeline should continue to give us business in this quarter also, plus in some newly established businesses, we will try to see if our business can expand. So that is how the export situation is right now and therefore, we are targeting to hold-on to this 27% of VAS volumes and also the target on a minimum DCM export sales that we did in Q3 and potentially see some increase on-top of what we did in Q3.
Pradeep Kumar Rustagi
So in exports, what happens that we receive order every day, every week and execute the same. So it’s a sort of almost like a running account kind of situation.
Jatin Damania
Yeah. Sir, last question from my end. Sir, just on the specialty polymer, definitely now on an innovative MBO3, I mean, we are probably a well-known first-party in the market. But is there any other product in the pipeline that we are working on and which should be launched in next couple of quarters that could also be as big as what innovative or is at this point of time?
Vaibhav Jha
Yeah. So there are two strategies that we are taking in specialty point. One is farming what we already have, right, like has good potential and we are looking at other chemicals which are there, but very small. We don’t talk about it because the volumes are quite small, but the potential is huge. And like I said that the maturity timeline for specialty polymer is quite large. So we have the pipeline where the approval processes are on and we are expecting some gains in the coming quarters. So of course, in terms of potential and pipeline, it’s quite rich. How it materializes, we are quite sure that we will be looking at least a double-digit growth in the next financial year across not only the existing products, but the new products that we had started working on and we have started working on these sometime back, right? So sometime during next financial year, we should see those pipelines also materializing. But overall, in terms of understanding the volume growth, it would be safe to say that we are looking at a double-digit growth in specialty volumes.
Jatin Damania
Sure, sir. That’s all from my side. Thank you and all the best.
Vaibhav Jha
Thank you.
Operator
Thank you. Next question comes from the line of Saket Kapoor with Kapoor Company. Please go-ahead.
Saket Kapoor
Yeah. Thank you, sir, for the opportunity again. Sir,, when we look at the — at the consolidated numbers for Specialty polymer, we find our revenue as well as the profitability is lower. What explains this number, sir at when we look at standalone, the number is INR126 crores for the nine months and profitability PBT number is 44.53 and consolidation by three years figure Mujar, INR123 crore of that. So what exactly?
Pradeep Kumar Rustagi
Especially, especially polymer made, there is a very small portion of especially polymer, which is sold from to. That amount is very, very small. As you rightly said, INR126 crores is getting reduced to INR123 crore or INR124 crores. So that’s the elimination when we look at the consolidated accounts.
Saket Kapoor
Okay. Okay. And also, sir, when we look at the volume for the nine months for, there was a 3% volume decline, right? So what explains, although we are running at 91%, but when we look at nine months FY ’24, the volume was 38 170 and this time nine months it is 3698, right?
Pradeep Kumar Rustagi
So yeah. So there was what happened that the accounting standard is such that something dispatched on the factory but not reached to the customer is not recognized as sales. So that plays a — that makes it create a gap of about 1 to 2 percentage points. That’s insignificant. So what we — what is transport — despite from the factory in this, let’s say, in the month of December not reached by 31st December will be recognized as sales in the following quarters. So 1% to 2% variation can happen because of this?
Saket Kapoor
Yes. And sir, other than that for the specialty polymers, we had volume of, say, 1,155 tons as mentioned in the presentation for the nine months. So what should we end the year in terms of the tonnage and is that also a reason for the lower tonnage that something was got shifted to the next quarter or this is not — this has not played out for specialty polymers.
Pradeep Kumar Rustagi
So first of all, 1,155 includes 370 tonnes of RPAT. This is quarter three, the only quarter three in-quarter two also, sorry, INR1,200 tonne was the quantity of special polymer out of which 128 was RPAT. So if you look at the total quantity that we achieved till-date 31st December 3,353 tonnes.
Saket Kapoor
Correct.
Pradeep Kumar Rustagi
We should be looking we should be closing near to 5,000 tonnes, including RPET?
Saket Kapoor
Okay. And sir, why is this segregation for RPET part being mentioned, if you could just provide the significant.
Pradeep Kumar Rustagi
Is a — RPT is sold primarily in the domestic market and the margins are not comparable to the other especially polymer products that we do.
Saket Kapoor
Yeah, correct, sir. Sir, although the organization is growing, there is impetus on growth, there is impetus on convert or transforming to company into value-added fund company, but we are also seeing the attrition also in the organization at high-level. I think so is joining the — addressing investors for the first time. So I would like to understand if you have a long strength here in the organization, what could be the reasons for these they build?
Pradeep Kumar Rustagi
First of all, we must realize that there is no alarming attrition. The people who left us, they served after — they have served the for four years, five years after that, they have left. So there are opportunities new film players have also come in. So people look for opportunities, but after serving the company for five to six years, if they leave, that’s not an alarming situation as far as attrition is concerned.
Saket Kapoor
Correct. And for, sir, what is the task in-hand currently, what’s the role being in Versaj and your background, sir, earlier role?
Vaibhav Jha
Yeah, sure. So I was earlier with a company called Reliance Private Limited. I was the CEO of the company. That company was a joint-venture between Reliance Industries and Sibur, which is the largest petrochemical company in Russia. So I served Lance for almost 13 to 13.5 years in reliance and I was on second to this JV as the CEO. So that’s my background. In terms of the task at hand, it is very clearly to transform into a specialty focused company, whether it be specialty polymers or specialty films. So that is the key task, which is the juicy part, right? And of course the other responsibilities are the typical organization management responsibilities, which has — which is basically a part of day-to-day operations. But the key task is to help Esther transform into a specialty focused company.
Saket Kapoor
Correct, sir. And last point, sir,, for this loop industry venture, when will we be drawing the debt, particularly that 60% of the total cost of the project where have we tied-up for the loan or which stage we are? And also with the closing balance of INR450 crores, which is due on account of the debt, long-term debt taken from FlimTech, when will we be able to lower that down to reasonable levels? What is the thought process timeline there, sir?
Pradeep Kumar Rustagi
So as far as loop is concerned, so there are various activities like identification of land, feed study, raw-material planning, procurement planning, etc., detailed engineering, all that is going on diligently. We are in the process of getting the DPR prepared for bankable DPR prepared and we expect the debt to be tied-up in the next four to five or outer limit six months. And in the meantime, whatever is the requirement of funds will be fund — will be met by the equity contribution from Industries and Loop. We both have invested INR8.5 crore each about a week ago and we now have INR17 crore INR18 crores sitting in the Elite. And so the fund is not going to come in the way of the implementation of the project in due course of time, both equity and debt will be tied-up. We are very confident we have — we have reached out to few bankers and that all would be — yeah, that all would be tied-up. On the equity that has to come from, we have already raised share warrants for INR175 crores, out of which 25% has already been received. And as we need additional money, we would be calling on the share of warrant holders to make the remittance. Coming to the debt of Estra FilmTech, the repayment obligation is INR50 50 crores each year. So going by the current outstanding of about so by 2030, we would be — existing debt will be liquidated. And in the intervening period, if we have some capexes for which we may raise additional debt, but the existing debt will be extinguished by 2030. Some debt.
Operator
Thank you. MR. Kapoor, please rejoin the queue for more questions. Next question comes from the line of Jatin with Swan Investments. Please go-ahead.
Jatin Damania
Yeah, thank you for the opportunity again, sir. Sir, just last question. How much of the — how much of the tonnage we do RPET in second-quarter?
Pradeep Kumar Rustagi
RPET in December ’24 quarter was 370 tonnes. In September ’24, it was 128 tons.
Jatin Damania
And out-of-the ones — as you gave a guidance of 5,000 tonnes for the full-year, which makes it around 1650 tonnes for the next year for specialty, how much will we do RPT for 4th-quarter?
Pradeep Kumar Rustagi
See, in the 4th-quarter, we are expecting RPT sales to be in the range of about 800 to 1,000 tonnes.
Jatin Damania
Okay, sir, that’s great. That’s it from my side. Thank you so much.
Operator
Thank you. Thank you. Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
Pradeep Kumar Rustagi
Thank you. Thank you, everyone, for attending the call. We look-forward to talk to you all-in the month of May when we have the next earning call. Thank you.
Operator
Thank you. On behalf of Esther Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Vaibhav Jha
All right. Thank you.