Ester Industries Limited (NSE: ESTER) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
Pradeep Kumar Rustagi — Executive Director – Corporate Affairs
Vaibhav Jha — Deputy Chief Executive Officer
Sourabh Agarwal — Chief Financial Officer
Analysts:
Unidentified Participant
Amit Sharma — Analyst
Vikrant Sahu — Analyst
Saransh Gupta` — Analyst
Saket Kapoor — Analyst
Rohit Mehra — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Estate Industries Q3 and 91 FY26 earnings conference call hosted by AD Factor CR. 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 then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sharma from Ad Factor Sphere. Thank you. And over to you sir.
Amit Sharma — Analyst
Thank you, Shruti. Good afternoon everybody and a very warm welcome to you all. Thank you for participating in this earnings call of Esther Industries Limited for the third quarter ended 31 December 2025. Before we begin, please note that this conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. The statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. On the call today we have with us Mr. Vaibhav Jha, Deputy Chief Executive Officer.
Mr. Pradeep Rustagi, Executive Director, Corporate affairs and Mr. Saro Agrawal, Chief Financial Officer. The management will take us through the operational and financial performance for the quarter gone by. Following which we will open the forum for the Q and A. I now request Mr. Vaibhav Jha to take us through the company’s performance. Thank you. And over to you sir.
Vaibhav Jha — Deputy Chief Executive Officer
Thank you Amit. And thank you everyone for joining us today. I will briefly talk about the key business developments post which Sourav will walk you through our financial performance during Q3, FY26 and nine months ending December 2025. Performance needs to be reviewed in the context of an exceptionally challenging external environment marked by aggressive price competition caused due to dumping of Bopet films by China. US trade tariff related disruptions in market for Bopet films specially exports and depreciation of Indian rupee against US dollar and Euro. Against this backdrop, the consolidated performance of the company during the quarter ending December 2025 remained subdued.
Consolidated income for Q3 FY26 declined marginally by 2.1% year on year to 343.5 crores. Within the polyester film segment on consolidated basis, one of the positive development continued to be the rapid scaling of recycled PET though the sale of Arpet and polyester chips to third parties increased significantly both in volumetric and value terms but segmental Revenue declined by 8.9% year on year and stood at 287.7 crores in Q3FY26. Drop in segmental revenue was mainly on the account of reduction in selling prices and margins in Bopet films and reduction in the volume of sales. The reduction in volume is mainly on account of one time maintenance activities in our production lines in order to improve efficiency optimize cost of production.
In line with the strategic initiatives to enhance the proportion of the value added in specialty films, the company was able to maintain the proportion of vas products at 25% despite loss of market in North America. Excluding North America, the growth in VAS products was 5% on year on year basis for Q3FY26 and 18% on nine months FY26 basis. Consolidated capacity utilization for films business stood at 71% with Esther Filmtech operating at 76% and Esther Industries operating at 66%. As far as performance during the nine months ending December 25th is concerned, company recorded a 7.2% growth in total income and same stood at rupees 1047.6 crores which is rupees 1047.6 Crores.
With volume of sales increasing in all product categories namely polyester chips, Bopet films, Arpet and specialty polymers. Operating performance in terms of ebitda reduced during Q3FY26 and 9 months ending December 2025 mainly on account of drop in margin due to aggressive price competition caused by dumping of Bopet films by China. US Trade tariff related disruptions in market for Bopet films and mark to market and reinstatement losses on foreign exchange term loans due to depreciation of Indian rupee against US dollar and Euro. Operating performance was also affected due to one time increase in gratuity and leave in catchment liability by Rupees 2.68 crores due to implementation of new labor codes with effect from 21 November 2025.
However, the Outlook is improving following the finalization of trade deal between US and India which is expected to be formally signed by mid March20. This agreement has reduced the tariff from is likely to reduce the tariff from 50 to 18%. We are still awaiting the clarity from the US Customs but we are expecting it to happen soon and this shift is expected to boost margins and thereby performance in upcoming quarters. Besides US Trade deal, India, EU trade deal and other bilateral trade agreements are expected to improve possibilities of higher exports of Bopet twins from India in period to come.
Furthermore, the dgtr, which is Directorate General of Trade Remedies, has initiated an anti dumping investigation into Bopet twins imports from China and other nations. We are hopeful of an early resolution on this matter for the benefit of domestic industry. PWMR rules, which are the Plastic Waste Management rules, had mandated 10% content usage in flexible packaging since 1 April 2025. This is a significant boost for Bopet film demand in India. We have seen clear signs of increase in demand due to this factor in last quarter. This trend will only increase going forward. We believe that the segment is currently operating near the bottom of the cycle with possibilities of meaningful upside once US Trade tariff relief begins to take effect and anti dumping duty on Chinese imports is imposed.
Coming to Specialty Polymers Business the specialty Polymers segment delivered a stable performance reinforcing its role as a company’s profit anchor. We recorded a significant volume growth of 46.4% during Q3 FY26 and 31.8% during nine months FY26 on a year on year basis due to higher volume, the growth in revenue was 72.9% during Q3 FY26 and 35.6% during nine months FY26 on year to year year on year basis indicating sustained demand despite US trade tariff, EBIT increased by 61.8% during Q3 FY26 on year on year basis. This was primarily on account of IP protection for certain marquee products supported by promising product lines and human capital to pursue focused R and D activities and implementing chosen market strategy.
We are targeting to deliver robust growth in this business segment. Moving to Esther Filmtech Ltd. During Q3FY26 capacity utilization stood at 76% as compared to 55% in Q3FY25. Quarterly performance improved significantly driven by 37.2% growth in sales volume and 13.5% increase in total income. Increase in value terms is lower as compared to increase in volume terms due to drop in realization and margin caused by the imports dumping that we talked about. Metallized film line operated above rated capacity underscoring resilience in value added segments. EBITDA for Q3FY26 would have been rupees 27.8 crores 8.1% margin instead of 6.1% margin now but but for the MTM and reinstatement losses of rupees 4.2 crores on foreign currency term loan and one time increase in gratuity and leave and cashmere liability of rupees 2.7 crores due to implementation of new labor codes that came into effect from 21st November 25th.
Similarly during 9 months FY26 EBITDA would have been rupees 96.4 crores that is 9.2% margin instead of 6.4% now and cash profit would have been rupees 46 crores but for the factors stated above, Esther remains focused and committed to advancing its circular economy vision to enhancing operating rates of his existing investment in Arpit business and through the upcoming Elite project positioning the company for sustainable growth in the years ahead. With growing demand of polyester films, IP protection for certain marquee products in specialty polymer segment, focus on development of new products and products promoting recycling and sustainability, we are confident to continue creating value for our shareholders.
We continue to invest in operational excellence, efficiency enhancement and R and D to drive our next phase of growth. We expect that the result of all the initiatives that we have undertaken on these aspects in last one year will start showing in FY 2627. As regards to the path breaking chemical recycling project being pursued through the 5050 joint venture company namely Estelloop, Infinite Technologies Limited or Elite, we are glad to inform you that all the activities related to completion of the projects are being pursued diligently. Process for acquisition of land for the project is in advanced stages and is likely to be completed by April May 2026.
We have globally recognized leading EPC firm Toyo Engineering as our detailed engineering consultant. This follows successful completion of front end Engineering and design which is feed study by Tata Consulting Engineers and represents the final engineering phase ahead of start of construction. European Union has come out with draft ECO Design for Sustainable Product Regulations or ESPR regulations. Finalization of specific recycled content percentages for garments is likely to be completed by mid-2026. Full enforcement of ESPR guidelines with provision for payment of fees pay to pollute for all non compliant fashion brands is expected by end of 2027.
This is going to exponentially grow the demand for products that ELITE is uniquely positioned globally to deliver. ELITE facility will help global brands like Nike who is our anchor customer in achieving their sustainability targets while creating complete circularity in polyester textile to textile space. That concludes my opening remarks. I now hand over the floor to Sourav to walk you through our financial performance. Over to you Saurav.
Sourabh Agarwal — Chief Financial Officer
Thank you, thank you and a Good day everyone. Thank you for joining us on our quarter three financial year 26 earning call. Let me quickly walk you through our financial performance post which we can commence the Q and A session. I would like to start with standalone financial performance in quarter three FY26 the company reported a total income of rupees 254 crore representing a 8.4% decline. Year on year, EBITDA for the quarter stood at 14.3 crore making a decline of 67.6% over quarter three FY25 with EBITDA margin of 5.7%. Because of macroeconomic headwinds, EBITDA would have been higher by rupees 3.8 crore but for the mark to market and reinstatement losses on foreign currency loan and one time increase in provision for employee benefit on account of new labor code that became effective from 21st November 2025.
The company also delivered a loss after tax of rupees 4.9 crore compared to a profit after tax of rupees 18.6 crore. During quarter three FY26 PAT margin stood at a negative of 1.9%. For Aster Filmtech we achieved 37.2% year on year growth in sales volume reaching 9,186 tons up from 6,698 tons in quarter three FY25. This was accompanied by a 13.5% increase in total income which stood at 106 crore compared to RS 93.4 crore in the corresponding quarter last year reflecting an improved operational scale. However, EBITDA for the quarter stood at Rs. 7.1 crore. EBITDA would have been higher by 3.1 crore rupees but for the mark to market and reinstatement losses on foreign currency loan and a one time increase in provision for employee benefit on account of new labor code that became effective from 21st November 2025.
On a consolidated basis we recorded a total income of rupees 343.5 crore making a marginal decline of 2.1% compared to 351 crore in quarter three FY25. EBITDA stood at rupees 21 crore representing a 67.7% decrease over the previous year. With the EBITDA margin at 6.1%. EBITDA would have been higher by rupees 6.9 crore but for the mark to market ending insteadment losses of foreign currency loans and one time provision in employee benefit on account of new labor code that became effective from 21st November 2025, both EIL and EFTL have been absolutely regular with repayment of term loans as per schedule basis.
The expected improvement in profitability due to factors stated by Weber and free cash in bank balance in our hand. We are absolutely confident of adhering to the repayment schedule. On the working capital front, both companies have adequate limits to sustain budgeted enhanced operations. Overall, the company has demonstrated resilient operational progress and bases the recent developments regarding the U.S. trade deal. We are confident of improved profitability in the coming quarters. That concludes our opening remarks. We can now commence the Q and A session. 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 assembled. The first question is from the line of Vikrant Sahu from RK Advisory. Please proceed.
Vikrant Sahu
Thanks for the opportunity. Just a few set of questions. Can you provide an update on the.
Company’S liquidity positions and debt profile like this includes current cash balance, debt levels, prepayment timelines and any changes compared to the previous quarter.
Sourabh Agarwal
In terms of consolidated, I will give you all the numbers as consolidated. So our gross debt as on 31st December is around 742 crore rupees and we have a liquidity of around 80 crore rupees with us. This loan is going to be repaid over a period of time and basically the next five years with a staggered repayment schedule depending on the different loan that we have. But on an average the repayment amount stands at 85 crore rupees per year.
Vikrant Sahu
Okay. And today elaborated on the impact of non operational or one off items on. EBITDA during the quarter especially what were the key factors.
Sourabh Agarwal
So there are two. One, one of items which we already mentioned in our speech. One is the impact of the new labor code where we have done rupees 2.67 crore which is a one time item which is mainly on account of the reinstatement of the retirement benefits. The other piece is the mark to market on account of the foreign exchange movement in euro as well as dollar which is amounting to rupees 4.95 crore.
Vikrant Sahu
Okay, got it. Yeah. Thanks for the opportunity. Thank you.
operator
Thank you. The next question is from the line of Sana, an investor. Please proceed.
Unidentified Participant
Hi, good afternoon. Sir, and thank you for the opportunity. So my first question is what are the key strategic priorities for our next three to five years?
Vaibhav Jha
Thank you for the question, Sana. So Esther wants to become a specialty company. So what it means is that right now almost 35 to 40% of our revenues are coming from specialty products. We want to take this share up to 70% plus in next three to five years. The second strategic priority of course is the cost optimization where we want to be the most cost efficient producer of the product in the world, not only in India. And right now the third strategic priority for us is the successful execution of the Elite project wherein we are expecting to complete the project by end of 2027 and commission the or start selling out the product within the following quarter.
So these are the three high level strategic initiatives. Of course there is a bunch of strategic priorities around our fiscal objectives which sort of can throw some light on in terms of what, how we are going to tackle our debt and other points.
Sourabh Agarwal
So Sana, as Webhav mentioned, Elite is a key marquee project that we are starting. And as you are aware that the total project for Capex for This project is 193 million USD which you are planning to fund through a debt and equity. And we are working very closely with an advisor in order to raise the debt for this project project and we are quite confident that we are going to raise the debt in the coming months and go ahead with the project.
Unidentified Participant
Okay. And sir, one more question I have. How does the management see the mix evolving between the commodity BOPET and specialty segment over the time?
Vaibhav Jha
So are you talking in with respect to Esther’s product mix?
Unidentified Participant
Yes sir.
Vaibhav Jha
Yeah. So see Sana, what we have done is compared to year on year basis. If you leave out North America where we actually had reduction in our sales because of the tariff in last six months, rest of the world we have been able to increase the specialty volumes by 18 to 20%. So despite the North American geography loss of sales, our share of specialty sales has remained at 25%. Right. So now with the tariff going away, we are expecting a bump in sales in North America and also growth like we have shown in rest of the world.
So what we want to do in specialty film share is take this number from 25 percentage to somewhere in the range of 50% over next three to five years and maybe even more. On the specialty polymer side, we expect a double digit growth on year on year basis for the whole financial year and we would like to keep growing in healthy double digits in Specialty polymers on a consistent basis for next three to five years. So, so this is how we want to shape our specialty portfolio.
Unidentified Participant
Okay. And sir, how critical is the US Market looking at a long term growth strategy?
Vaibhav Jha
See, we are fairly globally diversified in terms of our specialty portfolio, especially in specialty film segment. However, US is a very big economy and it is quite important for us. While our dependence is not as much as the other. Dependence is not as much as other geographies in U.S. but going forward, we would want us to have a very healthy presence in US so that the critical market for specialty films and also specialty polymers remain in the focus area and we are able to reach our objectives through our sales and business development there.
Unidentified Participant
Okay, sir, that’s all from my side and all the very best.
Vaibhav Jha
I just want to add that North America as such is a very lucrative market for growing these specialty films and polymers. Right? So there is no way that we can avoid it in future.
Unidentified Participant
Okay, sir, thank you so much sir for all the answers and all the very best.
Vaibhav Jha
Thank you.
operator
Thank you. The next question is from the line of Rohan Mehta. Please proceed.
Unidentified Participant
Hello. Good afternoon sir, and thank you for the opportunity. Sir, you mentioned that North America is one of our important markets to look out for. So wanted to get your inputs from a macroeconomic point of view. What are going to be our impacts about the US tariffs? The changes in tariffs that have happened, what’s your opinion on how that is going to pan out for our business and also specifically for the high margin?
Vaibhav Jha
Especially for the
Unidentified Participant
higher margin, relatively. Yeah.
Vaibhav Jha
All right, thanks for that question, Rohan. So US is a very important market for us and what really impacts us is the relativity of the duties that exports from India into US would be facing relative to the other countries. So far, the other competitors, mainly in Southeast Asia, were in the range of 19 to 20% while we were in the range of 50% in terms of the tariff which was imposed, which put us in a tough spot in that market. But now with 18% tariff, we are going to be in the most advantageous position compared to our competitors in the manufacturing world, including China, which will be at a significantly higher duty.
So it is a very big positive for us and we expect it to lead to good growth in our high margin products in the U.S.
Unidentified Participant
Got it, sir. Got it. Sir, as you mentioned, China also, I was going to ask if we are having any pricing pressures from Chinese competition and maybe in the US market, the tariff change may help us, but otherwise do you see this as a, as a potential pain point?
Vaibhav Jha
Chinese price pressures Chinese price pressure is indeed a pain point in the domestic market. We have seen that the prices of the products coming from China are at a level which has really prevented us from leveraging the demand scenario in India to the fullest extent. But at the same time, to tackle the issue we have filed an anti dumping duty. I mean the industry has filed an antidumping duty. Ester is a part of that petition and we are expecting that very soon we should see conclusion to that antidumping duty investigation. And we hope that government will support us and help us get some relief in the Indian market from these pricing pressures.
Unidentified Participant
I see, understood, Understood. Sir, if you could give some color on our agreement with Nike as well as the status of the Elite JV that we have with Loop Industries.
Sourabh Agarwal
So in Nike we have signed a three year contract where Nike is going to buy 5,000 tons of the finished goods from us which can be. And it is valid for three years post commencement of commercial production. So that is the understanding with Nike.
Pradeep Kumar Rustagi
And the second provision, important provision in the agreement is that soon before the commencement of commercial production they are going to increase the quantity from 5,000 to 10,000 tons. And it’s a take or pay contract. So. So it’s a take or pay contract, 40%. If they don’t buy the material, even then they would be paying 40% of the agreed price. So it’s a very good order that the Elite project has obtained to start with. And we are working on many other such off take agreements.
Unidentified Participant
And that is the same case with the Elite also, right? This was for.
Pradeep Kumar Rustagi
This is the Elite. Elite Nike is a contract which Elite has obtained.
Unidentified Participant
I see, I see. Understood.
Sourabh Agarwal
That is why we mentioned that three years post commencement of commercial production by the project.
Unidentified Participant
So just last one thing, if you could spare some time about our capacity utilization. What have been our utilization levels currently and do you see that? Do you see any possibility of further reduction or have we bottomed out and you know, what is your view over the next.
Pradeep Kumar Rustagi
So yeah, so we talk of the consolidated capacity relation for film business. On consolidated basis we are close to 75%. And as the, you know, not in the immediate quarter but in the following quarters, let’s say in the next financial year there should be an improvement in the capacity utilization.
Vaibhav Jha
So this increase in capacity utilization is coming on the back of the strong demand of BOPET films which we are seeing in India. So we are expecting that due to the government regulations around PWMR plus the good growth in FMCG space that we are Expecting due to GST rationalization, BOPET film utilization levels should increase. And on top of it, the various initiatives which we have taken, business development initiatives on the Xtra export market side that should also fructify into improved volume. So overall we are expecting that the operating rates going forward are likely to improve beyond what we are seeing today.
Unidentified Participant
This is expected from Q1 or are we already back in the upswing in this ongoing quarter?Sir, t
Pradeep Kumar Rustagi
There would be a slight upswing in this quarter but I think it’s going to be a consistent set of gradual increase in operating rates due to the consistent increase in BOPED demand. So it won’t be a step change. But if you see quarter on quarter over next four to five quarters, you would be able to see a growth curve in our operating rates.
Unidentified Participant
Fair enough. Just to close from my end, if possible, if you could give some guidance for the full year that would be great.
Pradeep Kumar Rustagi
For the which year?
Unidentified Participant
For this full year and maybe for the next also, if possible.
Pradeep Kumar Rustagi
We would, we would dissuade from doing so because we are still, you know, the industry and Indian industry economy is coming out of a very volatile phase. So at this point in time it would not be prudent on our part to give you a guidance. But we can state that we see improvements coming in from each quarter in the following year and in the next quarter as well.
Unidentified Participant
Fair enough. Thank you sir, that’s very helpful. And that’s all from my side. All the best. Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press start in one to ask a question. The next question is from the line of Saran Gupta from Swan Investment. Please proceed.
Saransh Gupta`
Yeah, thank you for the opportunity. Sir, as you said that the Chinese.
Pradeep Kumar Rustagi
Your voice is not clear. Can you speak a bit loudly?
Saransh Gupta`
No. Is it better now?
Pradeep Kumar Rustagi
Better than before.
Saransh Gupta`
December month? Like in the January month, nine days of February for the.
Vaibhav Jha
Sorry, it’s not very. Your question is not very clear to me. Can you repeat it?
Pradeep Kumar Rustagi
Voice is not clear.
Vaibhav Jha
Voice is not clear. I mean, hello.
Saransh Gupta`
Is it better, sir?
Sourabh Agarwal
Yes, it is better.
Vaibhav Jha
Yeah.
Saransh Gupta`
Yeah. So basically I wanted to understand like post the December quarter, in the month of January, what are, how have the prices shaping up and what is the current situation of imports? If. If you can help us with that.
Vaibhav Jha
Right. So see like I was mentioning earlier that we are seeing clear signs of demand growth in the Indian market in last quarter due to various factors. So this has led to stabilization of supply demand dynamics in India and therefore we are seeing improved value additions in there was some improvement in December. January and February seem to continue building on that improvement in VA. The Chinese imports have stabilized roughly 6 to 7kt per month is what we are seeing now. In between it had gone up to 11 to 12,000. So what happens is that even though the dumping numbers, I’m sorry not the dumping number, but the import numbers from China seem to have reduced and stabilized, they have an impact on the pricing of the rest of the, you know, supplies because everyone then start benchmarking to that pricing.
So there is still some pressure of Chinese pricing on the Indian price realization. But situation has improved and the Chinese imports also have come down from the peak.
Saransh Gupta`
Okay, so so as like there was a draft notification that the recycle content will be delayed by and take and the recycled part of content up to three years. So before that there was a capacity constraint within the industry after which I believe a lot of companies have started introducing new capacities for recycled pet. So how is it right now?
Vaibhav Jha
Right, so your voice continues to break in between. But I think I understood your question. I think you are asking that there was a notification which gave leeway to the consumers of film packaging laminate producers rather to defer the PCR introduction by a year. So let me give more clarity on this situation. So what has happened is the notification said that and it was a draft notification. It is not a final legislation which said that the companies can differ but not eliminate the obligations of PCR obligations that they are supposed to fulfill. So if the companies decide to not fulfill their 10% obligation, then it gets carried forward and added on to the subsequent years obligation.
So that is the leeway which had come out in the draft notification. But so far there is no official word word on it. It is yet to be notarized. So it still remains in the ream of circulation and to some extent speculation. Having said that, the brands and the leading companies and consumers of Bhoped films are not taking chances. They are preparing for this legislation to be enacted because it was not waived off, it was only deferred. So the later they start, the higher the obligation they need to fulfill. So this is the situation that we are seeing now that many of our large customers have already started improving their volumes of PCR films.
In fact many of them are converting their films in other substrates like BOP and BOPP to bopet which is leading to increased demand of BOPET film even without PCR content.
Pradeep Kumar Rustagi
The crutch is that the obligation remains. It’s just that they have got more time to complete the Obligation.
Saransh Gupta`
If I’m right that then at least for FY27 the obligation still stays at 40% though you can carry forward your 30% to the next three years. But for FY27 it is still 40% and there is no new, no new news about how is it framing up right now.
Vaibhav Jha
Yeah, see what this means is we are talking about so films is category two. So category two, the obligation was 10% for this financial year and 10% for next financial year and then it increases to 20%. What we need to be aware is that in a typical packaging laminate there are multiple substrates which are there. Right? So there could be pe, there could be BOPP and then of course there is bopet. Now the PCR obligation can be fulfilled by BOPET and not any other substrate. Which means that 10% of laminate needs to be fulfilled by the BOPET content.
And so the customers are taking two approaches. One is that they are trying to change their laminate itself and converting it to as much as BOPET as possible and moving out from other substrate. The second approach they are taking is that they are going for higher PCR content in BOPET. So instead of say 20 or 30%, they want to go to 80%, 90% because that needs to also take care of lack of PCR content in other layers. So overall all of these things solutions are a big positive for BOPET volumes and margins.
Saransh Gupta`
Okay, so just one last question then I’ll join back the queue with our elite 195 million kind of capex. What will be the peak debt that we can look at?
Sourabh Agarwal
So as we mentioned that this 195 million we are going to fund through a mix of debt and equity. Our target is that we are going to raise 70% of this amount as debt which tent amounts to roughly 1100 crore rupees since it’s a 5050 JV. So even if you assume that 550 crore rupees is a part of Estra Industries, so that my peak debt is going to go up from 750 crores plus 550. So it’s around 1200, 1250 crore rupees. But as I mentioned this is going to, this debt will be taken gradually over a period of two years during the project construction.
So it’s not a static number but it will keep moving as we move along because there will be also repayments that we are going to do in the next two financial years.
Pradeep Kumar Rustagi
But there is a, there is a accounting standard which we need to be cognizant of. In a 5050 JV the there would not be consolidation line by line consolidation of the debt, assets, liabilities, income etc. It is the bottom line of elite to the extent of 50% will be consolidated with bottom line of Astra industries. So when you see the balance sheet of Astra industry you will not see this debt increasing by 550 crores.
Saransh Gupta`
Yes sir. Right. Thank you. Thank you so so much and all.
operator
Thank you. Before we take the next question we would like to remind participants that you may press Star in one to ask a question. The next question is from the line of Jazair. Please proceed.
Unidentified Participant
Hi, am I audible to you sir?
Sourabh Agarwal
Yes, you are audible. Yes.
Unidentified Participant
Thank you for the opportunity. So my first question is like how has the predatory pricing of Chinese bulkhead film affected the pricing dynamic and competitiveness in the domestic India market? Sir.
Vaibhav Jha
The Bopet films pricing is done on import parity pricing which means you take the import dollar pricing, add duty, convert it into Indian rupees and then put in the freight and other logistic cost to arrive at the landed price of the product in the market. Because that’s really the benchmark price against which everything would be compared by our customers. So if the import prices go low then obviously the prices at which the domestic industry becomes competitive is low. And if it goes high then the domestic industry can charge higher and earn more margins. So that is how it is affecting the prices and margins.
Unidentified Participant
Okay, my second question is what were the major CAPEX during this nine month upper 26 and how much capex are we planned for the next quarter or let’s say for FY27.
Sourabh Agarwal
So in terms of Capex you may recall that in a previous call and call previously that we have mentioned about our investment in recycled polyester extruder at Hyderabad. So that capex was around 40 crore rupees. So that is the major capex that we have done in this financial year. Apart from this we have also done Capex with respect to maintenance of the plant and there is no other significant major capex in terms of the next financial year. We are still evaluating, we are still firming up our capex plan and we can revert to you, we can come back to you with a more stronger number maybe in the March quarter.
Call.
Unidentified Participant
Okay. And I have one question on the industry side sir. So how has the overall industry performed? Hello. Yeah. So how has the overall industry performed over the last nine months? And are we broadly in line with the industry? And what is your outlook for the industry over the next two, three years?
Vaibhav Jha
So we would not like to compare comment on how the others in the industry have performed. But we believe that the overall industry has undergone some relief during the mid of the last calendar year and that relief was there for a couple of quarters. And again you know the pressure came in from the Chinese imports after which the industry in general has been under pressure and that is reflecting in our financial performance as well. And the outlook is that in India the demand continues to be strong and it has become stronger because of the PWMR rules that I just talked about in my previous part of the speech.
So we expect that the new capacity addition is going to be at a reasonable pace. When I say reasonable it means that the growth in the industry and the capacity additions are going to be in sync. So net net we are going to see improved operating rates in the industry and that will have a reflection on the margins as well. So we are hoping that the volumes as well as the margins should now be very stable. And once and if the anti dumping duty is announced by the government it is going to have a significant impact on the margin as well the volume.
But even otherwise given the inherent growth in the Indian demand, we believe that we are at the bottom of the cycle and things should start improving from now on.
Unidentified Participant
Okay, and my last question is could you please provide me the film sales volume data for this 9 month FY26 and also the realization per turn or EBITDA per turn if possible. And what is your expectation for volume growth in the next quarter?
Sourabh Agarwal
Sir, what is the question? So else quantities for which for this.
Unidentified Participant
9 month FY26 and what is your expectation in this volume growth for the upcoming quarter? Is it possible for you to share with the realization pattern or EBITDA per turn for this nine month FY26 data?
Vaibhav Jha
Yeah, we can share. Yeah.
Sourabh Agarwal
So during the nine months we have done 61,000 tons of film sales and the realization has been.
Pradeep Kumar Rustagi
Quarter by quarter. We’ll give you the quarter by quarter realization and we will focus on 12 micron which is the base commodity film. In June 25th the in the domestic markets 12 micron was selling at about 102 rupees a kilogram. September it dropped to 95 rupees a kilogram. December it marginally improved to 97 rupees a kilogram. And currently we are at about 110111 rupees a kilogram which is 12 micron base corona film. That’s the industry benchmark. We generally focus on this number. All other products are add on on the 12 micron Corona film.
Unidentified Participant
Okay. Okay. So thank you very much. That’s all from my side and best of luck for the next quarter.
Sourabh Agarwal
Thank you.
operator
Thank you. The next question is from the line of Saket Kapoor from Kapoor and company. Please proceed. Your line has been unmuted. You may proceed with your question.
Pradeep Kumar Rustagi
Okay.
Sourabh Agarwal
Hello. Are you there, Mr. Kapoor?
operator
So shall we move on to the next participant?
Vaibhav Jha
Yes.
operator
The next question is from the line of Ms. Kaan Malhotra. Please proceed.
Unidentified Participant
Hi sir. Good afternoon.
Sourabh Agarwal
Good afternoon.
Unidentified Participant
I wanted to know that how sustainable is India’s current film demand growth according to you and can it absorb the upcoming capacity?
Vaibhav Jha
Muskaan, like I said earlier that we are expecting good growth in Beaufort films because of PWMR rules As well as expected support from government in terms of anti dumping duty which will reduce the imports and improve the possibilities of sales for the Indian supplier. So demand wise we are expecting good demand because of this ADD application. We hope that we will be able to cater to a larger part of this demand. Now coming to your second part of the question on the capacity addition. See right now the Indian market is roughly 900,000 to a million tonnes, right? Somewhere in per year.
And we are expecting growth in the range of 8 to 10% on this. So which means that every year 90,000 to 100,000 tons of capacity increase happens. And we are seeing over the next two years approximately 150,000 tons of capacity addition. What this means is that the demand growth is going to be higher than capacity addition. We must also keep one thing in mind which is that whenever a new capacity comes up it takes it around six months to a year to actually reach its potential in terms of production. So there is a lag effect in terms of how much production they can churn out practically right from that plant.
Because there is a learning curve. There is a technology stabilization period, all that. Right. So overall in terms of supply, demand balance we are quite fairly placed for next couple of years.
Pradeep Kumar Rustagi
And you also talked about sustaining the demand. So I will just give you share with you the historical growth in demand numbers. If you look at a long period of time, 10, 20, 30 years. The Indian demand for polyster film has been growing at about. If you take a wide range, I would say between 9 to 13%. If you take a narrow range it will be about 10 to 12% per annum. So the increase in demand is not under question. And the capacity expansion as Vaibhav has told are also not coming in bunches. And it would be just about enough or Marginally, I would say short of the demand growth.
So the things are going to get better from the manufacturer point of view, from the, the film manufacturer’s point of view.
Unidentified Participant
Understood sir. And thank you so much for such an elaborate and detailed answer. So my second question is like what would be the Easter force position versus say Chinese exporters and where do you still see gaps?
Vaibhav Jha
See, it’s a very difficult question to answer because and not only for BOPET film industry but any industry as such, regarding Chinese cost competitiveness because the price at which they sell product somehow doesn’t match up to our understanding of cost and how we anticipate participated. So I don’t think we are in a position to comment on specific matters.
Unidentified Participant
Understood? Understood. Thank you sir. That’s it. From my side. Thank you. And all the very best.
Sourabh Agarwal
Thank you.
operator
Thank you. The next question is from the line of Rohit Mehra from SK Securities. Please proceed.
Rohit Mehra
Yeah, so thank you for the opportunity. So I have a couple of questions pertaining to our specialty polymers that have volume has grown strongly. What is the current installed capacity and utilization and also what will the peak revenue potential of this business?
Vaibhav Jha
See, right now the specialty polymers capacity is north of 30,000 tonnes per annum. And what we are looking at is roughly 10 to 12,000 tons of production. So we are looking at 25 to 30% operating rate right now. The peak revenue potential, you know, if we thoroughly use this 30,000 tonnes out of the production should be roughly, in my opinion somewhere around 400 to 500 crores.
Pradeep Kumar Rustagi
But please realize that this 30,000 capacity was not built for especially polymer. This capacity was built to cater to the needs of film plant. But when we put up the continuous polymerization plant, this capacity, this batch polymeration was surplus which we modified to produce specialty polymers.
Rohit Mehra
Understood, sir. Okay. And also what will be the steady state EBITDA margin profile for the similar specialty polymers?
Pradeep Kumar Rustagi
What? Pardon? I couldn’t get you.
Rohit Mehra
What steady state EBITDA margin profile should investor expect from these specialty polymers?
Pradeep Kumar Rustagi
If you.
Vaibhav Jha
Yeah, see there are two parts to specialty polymers. One is the high margin products which are, which have an ebitda of almost 40 to 50%. And then there are value added products where the EBITDA could be anywhere. It is a wide margin from 8% to 17, 18%. So we are still in the phase of ramping up our specialty polymer sales on the back of both high margin specialties and value added products. So how we stabilize this product mix between high margin specialty and value added products is going to determine the EBITDA that We are going to see on a steady state but it is going to be significantly higher than our film business.
And I will just stop short of giving a margin outlook. But the current margins that you can see in the range of EBIT margin is asking EBITDA. So EBIT margin of around 30% plus. Right. So that gives an idea where we are future will depend on how do we stabilize this product mix going forward.
Rohit Mehra
Got it sir. And one more thing pertaining to as you were earlier saying that few of one offs this quarter pertaining to the foreign currency fluctuations and all. So are we doing any efforts to hedge these fluctuations or how are we seeing it going forward?
Sourabh Agarwal
The foreign. So foreign currency fluctuation. Rohit, in the current scenario it’s very difficult to make any judgment. Right. So if you see Euro it was. We started this the calendar year 2025 with an exchange rate of 88 rupees compared to rupee. And dollar was somewhere around 84 rupees compared to rupee. And today dollar is at 92 rupees and euro is hovering around 106 rupees. Right. So the question is that there has been a lot of volatility around currency in the current financial year. And any strategy which you may adopt may not be a foolproof strategy.
Having said that we keep looking at our. We keep looking and monitoring the market on a regular basis and at the appropriate time and the right opportunity we do hedge our law our installment repayment for six months to 12 months. That is a strategy that we follow since we, since the rupee has depreciated so much against $. So on the export side generally what we have done is that we have kept our exposure open in order to get benefit of the depreciation in rupee.
Rohit Mehra
Got it. Got it. So. So that’s it from my side and all the very best.
Sourabh Agarwal
Thank you.
Rohit Mehra
Thank you.
operator
Thank you. The next question is from the line of Saket Kapoor from Kapoor and company. Please proceed.
Saket Kapoor
Hope I’m audible.
Pradeep Kumar Rustagi
Yeah, yeah. Yes.
Saket Kapoor
So firstly pertaining to the export of flims to the US market we, we did face headwinds for the, the I think eight, nine months. So if you could just give us some understanding what percentage we are going to see uptake going ahead when this becomes a reducer.
Vaibhav Jha
So Sake ji, see we saw no impact on speciality polymers. And your question is on specialty films, on speciality films we. Our volumes into North America took a hit by almost 30 to 40%. Right. So that volume we are expecting to recover in a few months. So we should Be back very quickly to those volumes. And then of course the bigger hit was that the business development pipeline dried out because people stopped engaging on new business development which could have resulted into further volumes by now. So we are engaged with the customers and going forward we should see us selling specialty films.
Beyond the volumes which we were doing before the tariff application.
Saket Kapoor
We were eyeing 30% I think so value added on a consolidated basis and we are at 25. So those that 5% incremental is all focused on from the US trade part. I think. So they will get the incremental volume.
Vaibhav Jha
Yeah. So that accounts for a big part of this gap. And it was of two hits that I mentioned that one was we lost the volumes which we’re doing a part of the volumes which we’re already doing. And the second was that the business development pipeline which we had projected to Frati that stalled. So that could did not give the results that we had thought. And therefore, you know, we are short of our target. If you look at the growth in specialty films other than North America, we have registered close to 20% growth. Right. So the missing piece is the North America.
Saket Kapoor
Okay. And for the installation of the the metal extruder. Extruder at. At Katima? I think so correct me there. Where are we selling terms of that to be installed and when we’ll start sweating the that asset?
Vaibhav Jha
I think you mean the new recycled pet extruder that has been installed in our Hyderabad facility. That was installed somewhere in October and we are right now in the stage of conducting trials with our customers. So we expect that we should start seeing ramp up in the operating rate starting from next month and then it will keep on improving.
Saket Kapoor
Okay, so there was also some capex for Kathima unit. Also everything was pertaining to.
Vaibhav Jha
See there. Could be some maintenance capex, you know, the capex that we need to do to do some cost saving initiatives or to, you know, maintain our plant or enhance some small cape technical capabilities of our plant. So those are always there. Right. But when in the management parlance we don’t call it like a capex. Capex. Capex for management is a new facility addition of significant size. So nothing of that nature was planned in Fatima.
Saket Kapoor
There was also one understanding given by the largest their SRF. In their concord where wherein they have spoken about that the bupet capacity at China, some mandate has been enforced. Because of it there is a curtailment to the tune of 20% and that had led to incremental margins for BOPA. Sir, can you give us some understanding how are the spreads being post the December quarter and some color how things are trending up for the commodity flims.
Vaibhav Jha
Yeah. So I would not comment on SRF point of view on the Chinese production. Many times such kind of information come in the market. It’s very difficult to assess what’s really happening. But we can talk about the trend in the value addition and we have seen that starting from November onwards there has been some improvement in the film realization. Lot of it has to do with the improvement in demand due to the PWMR rules. We are seeing quite robust demand for pet films starting from November and right now also it is very good. So this trend is likely to sustain.
We have also seen many customers, many customers moving away from other substrate to bopet. Right. And that has clearly led to us being engaged on various conversion projects as well. So all in all the supply demand situation in Indian market has improved in a large way and we hope that and we expect that it will continue going forward.
Saket Kapoor
Can you give some color on the spread part?
Vaibhav Jha
So the spread which is VA between 12 micron plain film, which is the commodity film and the raw material in January was roughly around 30 rupees and it is an improvement of around 5 to 6 rupees from the previous quarter.
Saket Kapoor
I didn’t get.
Pradeep Kumar Rustagi
So Webhav told that in the month of January the VA which is the difference between selling price and raw material cost for 12 micron film was about 30 rupees a kg and in the December quarter it was about 2324 rupees. So there is a improvement vis a vis the December quarter in the month of June by about five to six rupees a kg.
Saket Kapoor
Same trend is continuing for Feb also Sir, we are 10 days and five small months.
Pradeep Kumar Rustagi
Yes. So so far? So far? Yes.
Saket Kapoor
Okay. Sir, in the presentation we have mentioned about some savings from the use of ride huts also I think the power cost may reduct. So what. What exactly will it translate on in an. On an annual basis in terms of.
Pradeep Kumar Rustagi
That we have stated that our focus on green energy and we have been using her since last many years.
Saket Kapoor
So nothing new?
Pradeep Kumar Rustagi
No, nothing new that’s been there since last many years and we are. We are looking at other avenues and we are trying to get into more into green energy, renewable energy at. Etc but that as it rectifies we will inform you.
Saket Kapoor
Okay. I was late to join the call. So look front pair. What are the further developments other than any meaningful things?
Pradeep Kumar Rustagi
Yeah, yeah. So the land acquisition we are expecting to be completed by April, May 26 Feed Study has already been completed by Tata Consulting Engineer engineers. And for the detailed engineering we have engaged with Toyo Engineering which is a Japanese internationally renowned EPC contractor. We have engaged with them. So there are many activities going in parallel including the efforts through a debt syndication agency for raising debt.
Saket Kapoor
Okay ABHI as on December what is what was our net debt on console level.
Sourabh Agarwal
It was. About 6. See our gross debt as I mentioned earlier was 740 crore rupees. And when you adjusted for the cash in cash equivalents it’s around 660crore rupees.
Pradeep Kumar Rustagi
This includes working capital as well.
Sourabh Agarwal
This includes working capital and term debt.
Saket Kapoor
Cost of fund and credit rating curve due revision.
Sourabh Agarwal
So cost of debt is around in the range of 10 to 11% depending upon the entity in which the debt is there. As you know that we also have a euro loan from OLV bank. So where the rate of interest is very low at less than 3%. Now in terms of working capital loan our total amount Is as on 31st 1st 12-20-2026 is 230 crore rupees.
Pradeep Kumar Rustagi
And if you talk of the cost of debt weighted average cost of debt in Astra Industries it is about 9% 9.4% and Aster Film tech is about less than 9%.
Sourabh Agarwal
That is because of the OLB loan that we have.
Saket Kapoor
And on the rating revision.
Sourabh Agarwal
As you know that you know rating agencies keep a strong track and there will be a revision in by end of. After the end of. After the completion of the performance for March 27th. March 26th.
Saket Kapoor
The factors that were affecting making the businesses bleak. Can we conclude today that those factors have now behind and the worst in terms of the business sentiment is at least over. And now we can expect volume and profitable growth trajectory for the flim industry. For the Buffet industry.
Vaibhav Jha
Yes, I think that is what we are seeing on the ground as well that the business challenges have subsided. U.S. tariff has normalized. We are seeing good supply, demand balance and strong VAs in the Indian market. So overall looks like that the film business is now going to start showing improved financial results as we move into next quarter and beyond.
Saket Kapoor
Right. And so will be the utilization level. So we will have operating leverage also too which will come into play.
Vaibhav Jha
Yes. So we are expecting that the operating rates are going to improve because of the sustained demand and certain internal enhancements that we have done in our production line in last quarter. So we should see that the operating rates would start inching upwards from now on.
Saket Kapoor
One more small point, when is our that warrants conversion due, sir. And the price?
Pradeep Kumar Rustagi
Mid of May. Mid of May 26.
Saket Kapoor
And what is the exercise price?
Sourabh Agarwal
158 rupees.
Saket Kapoor
158 for both promoter and non promoter, right?
Vaibhav Jha
Yes.
Saket Kapoor
Okay, sir. Thank you. And all the best to the team.
Pradeep Kumar Rustagi
Thank you. Thank you.
Sourabh Agarwal
Thank you.
operator
Thank you. We take that as the last question for the day. I now hand the conference over to Mr. Vaibhav? Ja for his closing comments. Over to you, sir.
Vaibhav Jha
I would like to thank all our stakeholders, partners and team members for their continued support. And thank you all for participating in this call. We remain committed to driving sustainable growth, delivering value and building on momentum achieved in this quarter. We look forward to an even stronger FY 2017.
Sourabh Agarwal
Thank you.
Pradeep Kumar Rustagi
Thank you.
operator
Thank you on behalf of Ester Industries. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.