Ganesha Ecosphere Limited (NSE: GANECOS) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
Unidentified Speaker
Sharad Sharma — Managing Director
Gopal Agarwal — Chief Finance Officer
Analysts:
Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Ganesha Ecosphere Limited Q3 FY ’25 Earnings Conference Call hosted by Antique Stock Broking. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Dinesh. Thank you, and over to you, sir.
Unidentified Speaker
Thank you, Muskan. Good evening, everyone, and thank you for joining the 3Q FY ’25 Post Results Conference Call of Ganesha Ecosphere. I would like to thank the management for giving Antique Stock Broking the opportunity to host the call. From the management, we have Mr. Gopal Agarwal, CFO; Mr. Prashant Sandelwal, Senior Vice President; and Mr. Yash Sharma, Director, Ganesha Ecosphere.
Without further ado, I would now like to hand over the call for opening remarks to the management, post which we shall open the floor for Q&A. Thank you, and over to you, sir.
Sharad Sharma — Managing Director
Hello, everyone. Thanks, Manish and Antique Stock Broking for hosting us for the Q3 earnings call. And good afternoon to everyone, and I welcome all the participants here for our quarter 3 FY ’25 earnings call. So in the third quarter, which has just passed, we had a mix of experiences. On the one hand, operations and results of the RPET granule segment were on the expected lines, and we could increase the capacity utilizations and deliveries both. But on the other hand, we experienced some distress in our legacy business of RPSF as well as in yarn.
The major reasons were soaring feedstock that is the PET bottle scrap prices at the one end due to opening up multiple applications and higher demand as well as seasonal impact causing lower consumption of bottled beverages and water. On the other end, the demand in the textile industry was depressed, coupled with oversupply position in the industry, owing to which higher raw materials could not be passed on to the final customers.
And at the end, the gross margins got some erosion. Going forward, we are anticipating that the persistence of the situation for some quarters, it will get reversed if either the demand matches the supply or some kind of consolidation happens in the industry. Silver lining is that in the recent budget, some steps like fixing minimum duty of custom on needed fabrics to restrict the current ongoing very, very cheap imports and increase in PLI allocation, etc, will boost the demand in the domestic textile market.
To combat the situation at our end, we are working hard in both in the export markets as well as shifting our focus from traditional yarn spinning segment, technical textile segment as well as working on alternate and cheaper raw materials for minimizing the adverse effect of the operations. In the RPET granule segment, we operated at a 75% capacity utilization this quarter.
Our product has been well established in the market already, and we have a good demand visibility for the next financial year and do not see any difficulty from demand side. Rather, we are now working on to increase the capacity utilization so that the maximum produce could be achieved in FY ’26. In the recycled filament yarn segment, we are still exploring the market development and demand is yet to pick up. Noticeable ramp-up, we are expecting to pick up by Q2 FY ’26.
With regards to our expansion plans of 45,000 tonnes per annum of RPET in Odisha, we have decided to increase the size to 67,500 tonnes per annum and the revised capital outlay for the same will be estimated to around INR600 crores. We are also looking for increasing the annual capacity at Warangal from 42,000 tonnes to 6,500 tonnes per annum.
So a total of 90,000 metric tonne capacity will be added. And after this expansion, our total RPET capacity would reach to around 132,000 tonnes per annum. The Odisha project is on track as of today, and we have also already identified land parcel and the formalities for the acquisition are being currently under progress. Now I would like to hand over the call to Gopal for taking you through the financial numbers achieved in Q3.
Gopal Agarwal — Chief Finance Officer
Yes. Thank you, and good afternoon to everybody. I hope all of you put the time to look at numbers for Q3 FY 2025. Company made production of INR40,630 tonnes and achieved consolidated revenue of INR390.780 during Q3 FY ’25, which is 39.7% higher in comparison to corresponding last quarter.
Out of the INR268.2 crores has come from standaround business and INR129.78 crores has been contributed by subsidiaries. We achieved quarterly EBITDA of INR53.60 crores, which is higher by 41.3% from Q3 FY ’24. Out of consolidated EBITDA of INR56.50 crores, INR23.25 crores was contributed by standalone business operations and INR33.25 crores was contributed by subsidiaries.
Consolidated EBITDA margins were at 14.2% of the operational revenue and EBITDA margins of a stand-alone business was at 8.68%. In the astute numbers, EBITDA per tonne, basically positive INR13,096 per tonne as against INR12,036 per tonne and during corresponding last quarter.
On the standalone basis, EBITDA of per INR8,041 per tonne was achieved, which is lower by 26.9% from Q2 FY ’24, due to the detail — discussed. We got set of INR29.71 crores during the quarter, and it is one set in production higher than corresponding last quarter. On a year-to-date basis, company achieved production of 117,297 tonnes and revenue of INR1,221.16 crores on a consolidated basis, which is higher by 22.29% and 37.2%, respectively, from corresponding last period.
We earned EBITDA of INR159.50 crores in spite of INR79.40 crores billing 9 months period of financial year ’25. These numbers for costing period were INR90.80 crores and INR19 crores, respectively. There is a growth of 75.7% in EBITDA and 317.9% of fat level from corresponding period of financial year ’24.
And you can — so with this, we request this house to ask the question if they may have.
Questions and Answers:
Operator
[Operator Instructions] The first question is from the line of Aman from Ines Capital.
Analyst
So sir, the new capex that you have announced is around INR700 crores to INR750 crores. So I just wanted to know if would be the equity debt mix, or are we going to do it through the internal accruals?
Gopal Agarwal
So the capex is around INR700 crores, and we have raised the funds to QIP of INR350 crores and the promoters potential R&D also INR150 crores. So in all, we raised INR500 crores of funds. So that was primarily for this expense project. And currently, we are having some care with us and some of the funds we applied for repaying the working capital loans, which we can avail any time.
So basically, financed equity and the other things have not been finalized. But more or less, we are not focusing much on the debt level, but we are focusing — we are funding this capex through internal goals as well as the equity have already raised.
Analyst
Okay, sir. Okay. And sir, another questions about our value-added business. What was the contribution of the value-added business this quarter or for 9 months?
Gopal Agarwal
So from our subsidiary businesses, we have — almost 40% is coming from the subsidiaries and 60% coming from a standalone business.
Analyst
Okay. And what are we envisioning for the next couple of years? Because obviously, we are focusing the — on the new value-added business through go revise and focusing on granules and B2F chips. So what kind of revenue contribution in the — going forward in the 2, 3 years we are seeing from the value-added business?
Gopal Agarwal
So with this capacity addition of 90,000 tonnes, we are looking for about 6 — 0%, 65% revenue will come from the value-added products.
Analyst
Okay. And sir, I think that will uplift EBITDA margins up to, let’s say, 16% — doubling margins.
Gopal Agarwal
Yes, we hope so. In fact, we expect the grade up margin, much more than that.
Analyst
Okay. Great, sir. And one last question, sir. I just had a silly doubt, pardon me. I mean, what kind of plastic are we capable to handle? And what are we handling right now? Is it more on the rigid plastics side or the Flex plastic side?
Sharad Sharma
So basically, we are handling rigid plastic and especially the PET section. We are also working on some R&D going on in some of the plant in flexible also, but mainly at present, the company is working in rigid plastic that especially in PET mode.
Operator
The next question is from the line of Prasanna Bensel from Bentone Research.
Analyst
Congratulations for a good set of numbers. So I have a couple of questions. First is, there is fall in gross margin and revenue per tonne or year-on-year and sequential basis. So could you explain what might be the reason for the volume expand?
Gopal Agarwal
So the — as we explained in our opening remarks, the gross margins are coming down because of the souring governmental pieces — prices.
Analyst
Okay.
Gopal Agarwal
It is affecting our legacy business. It is affecting our legacy business, particularly on the standalone business of recycling TSF and yang.
Analyst
Okay, sir. And my next question is on the competition side. So many of our competitors are also announcing expansion trends and doing capex in the chips side of business. So do we see any risk from increasing competition and if this and how might it impact us?
Gopal Agarwal
Yes. So yes — Yes — So as regard the completion, of course, there is — many more players are coming in this recycling RPAT space because you see as for these regulations, the mixing of 30% RPET much from FY ’26 and it will go to 60%. So with the size of the industry, which is going to be created from zero — from scratch to about 1 million tonnes in the next 4, 5 years.
So certainly, a lot of capacity is required to be created. So players are coming in and no doubt players are coming in. But you see, we are having a couple of advantages. Number one, we are the first mover and first one. Second, we are in these businesses last 30 years, and we understand the wish very well. Number three, we are having the robust collector network across the country.
So number four, we have made a lot of R&D, and we have put a lot of efforts in understanding for RPET for grid canes because in India, you see most of the PET conjunction is in food grad, about 8,500 is used is food grad, 15% is land food grad. So for grad, it is very, very important to be contaminate the polymer. So no leasing is done in the end of a package product.
So these are the couple of things which we are already addressing and our product is very well accepted by the branch. And we are applying since last 1 year to them. So we are not afraid of any kind of competition.
Operator
The next question is from the line of Prakash Kapadia from.
Analyst
A couple of questions from my end. You talked about value-added products, you increased the capex. So typically, what could be the asset turns in this business? And on a steady-state basis, what could be the EBITDA margin in the value-added products?
Gopal Agarwal
So Prakash, if you are talking about the ARPU general, so the asset turn is about 1.25: 1.5 at is lower because the taxes is higher in this business. But of course, as for the capital deployment, margins are also higher. So we are looking for EBITDA margins in the range of 20%, 25% in this business.
Analyst
Okay, okay. And that should come once we achieve a minimum threshold capacity in the second year, we should expect that?
Gopal Agarwal
Yes, of course, so basically it took a longer time when we start off such line, but after that, we are not — second and third line, which took much time. So a quarter was taken to stabilize underline. So we don’t think it takes more than 3 or 4 months’ time.
Sharad Sharma
Maybe at the end of first year, we could expect these margins.
Analyst
Okay. Okay. And there was a government regulation as per plastic waste management rules, the micron thickness was scheduled to increase from 50 to 120 microns for plastic bags. How much of this is implemented and in recycled plastic usage in plastic packaging, are these big drivers for us or not really big game changers or these are just incremental policy initiatives, which could add a bit.
Gopal Agarwal
So basically, this 50-micron versus 120-micron is applicable to the flexible packaging. So we are working in rigid packaging only. And we are — so flexible packaging, there is a mandate of using 5% of recycled content in FY ’25 as against in rigid plastic, it is 30% of recycled content is to be used by all the brand owners. So there is a difference between — so there are different categories, category 1, 2, 3, 4.
So category one belongs to rigid plastic Category 2, 3 belongs to flexible plastics. So there is a difference between a flexible and rigid plastic. So basically, for Rigid plastic, the mandate is 30% in 2025. And every year, it is getting — going to increase by 10%. So in ’26, it is 40%, then 50% and in ’28, it is 60%.
Analyst
Okay. Every year, there is a plus.
Gopal Agarwal
Yes, yes, Yes, there is a plus.
Operator
The next question is from the line of Anand from [Indecipherable].
Analyst
Just probably an extension that we bring this to. Sir, how is the plastic waste collection environment have been given the EPR regulations in place? Do we see any change in the industry-wide collection mechanism that’s currently in factors? And what are our key sources for getting the sourcing plastic?
Sharad Sharma
So basically, in India, the sourcing and collection is being happened through the rat pickers. So it is — there is a fleet of almost 60 lakh people engaged in this business. They are collecting the scraps from all the residential societies, houses, different offices, hotels, etc and also from the spas, restaurants everywhere some areas were where the waste is there.
So basically, it is an informal system, which is being operative in India since many years. And yes, mostly, it is the rigid plastic, which is being collected. However, the flexible plastic collection is very low. That is not happening because of the light weight of the material and nonrecyclable design of these flexible plastic where multilayer plastic is majorly consumed in flexible packaging.
So yes, there have been several actions taken in the previous years for formalizing the collection system across country, different small projects have been done, but still the most feasible system is the informal collection system of the rec pickers and then it goes through different collection centers, then it dealers and then it comes to the recycler. This is how it is being…
Gopal Agarwal
So the formal sector is — it is in formal sector, but it is very efficient one. So that’s why the Indian collection rate is much more than the other developed countries where the — is happening to the government agencies or the regulators.
Analyst
I mean do we have any partnerships or with large brands or providing any APR certificates or something on those lines?
Gopal Agarwal
Yes, we are providing the API certification to various brands, large bands also. So their EPS liability is to 100% of their conventions. So whatever we are recycling, we are providing the recycling particulars to the branch.
Analyst
Any new tie-ups on that side?
Gopal Agarwal
So it is ongoing. It is not a new business. It has gone in since the last 2, 3 years.
Operator
The next question is from the line of Kartik Pande from Ashika Broking.
Analyst
I just missed out the expansion plan that you were just selling it to the other analysts. Can you just speak to for the previous expansion plans and how we are be announced new expensive plants and what we need as.
Gopal Agarwal
So you see earlier, we decided the location only for the 45,000 tonnes. So we are already having the plan for 90,000 capacity additions, but we could find a location only for INR45,000 tonnes and balance INR45,000 location was to be decided. So we announced a plan only for 45,000 tonnes at the first phase.
So when — now we have decided the location for another INR45,000 tonnes. And so — so it is not a — basically, it is not a different expansion but is a part of the expansion which we early start out for 90,000 tonnes.
Analyst
Okay. And what will be the additional total capacity of service expansion at our, will right?
Gopal Agarwal
So now 67,500 tons in EBITDA and 22,500 tonnes in the Warangal that is the existing location.
Analyst
Okay. And what’s in the capex outlay for these 2 lands?
Gopal Agarwal
About INR700 crores. Earlier, we were — for the 2 lands, we had a capex of INR450 crores, but now on 700 — INR90,000 tonnes, it has been now INR700 crores.
Analyst
INR700 crores will be including both of these expansions, right?
Gopal Agarwal
Yes.
Analyst
So if I’m right, you had earlier — said you would expand 5,000 tonnes per annum. Now it’s INR67,500 at, so additionally, you are doing.
Gopal Agarwal
No, no, no. Actually, earlier 45,000 was in Odisha, so that 45,000 tonnes has been increased to 67,500 tonnes 22,500 tonnes has been added to the location and 22,500 tonnes credit to the existing location of Warangal.
Operator
The next question is from the line of Suraj from Samara Investments.
Analyst
So how much time will it take for our brownfield expansions?
Gopal Agarwal
Sorry, sorry, come again.
Analyst
How much time we will take for our — expansion because it’s a brownfield expenses. So I’m assuming that it will take a lower — a much shorter period of time.
Gopal Agarwal
Yes, of course, we are looking for operationalizing this plant — this expansion by the end of this
Analyst
Okay. And sir, we were earlier given a guidance of around INR1,600 crores of revenue. In 9 months, we have done about INR1,120, INR1,130 crores thereabout. So can we — is there any — in the guidance or we are confirmed that we will achieve INR1,600 crore revenue for this year?
Gopal Agarwal
No. So already, we have done INR1,121 crores in 9 months.
Analyst
Yes. INR480 crores more to go in one quarter. So until now, we have done.
Sharad Sharma
Last quarter, we did it INR400 crores, almost INR400 crores we did it, last. So the balance, it may not be — it was only the guidance of INR1,500 crores. So always, it is not — it may be INR60, or INR70 but we are not far away from INR1,500.
Analyst
Okay. Okay. And sir, last question is that from this year, the EPR guidelines will kick in? And will we get additional revenue for EPR certificates that we will sell to the companies over and above whatever we are doing for recycling?
Gopal Agarwal
So no. So whatever we are recycling, we are getting the EPR on that quantity. So in future, whatever the quantity will increase, we will get the additional revenue from that source from EPR. So we are doing a — sorry?
Analyst
Sir, complete your point.
Gopal Agarwal
Yes. So what about the quantity we are promising — in this financial year, we have promised about 115,000 tonnes production. And so the matching EPR we have sold. And so when — and whatever the quantity will increase so EPI will also increase the session Right.
Analyst
So my question was that the EPR certificates that we will sell in the market that revenue will be over and above whatever we are doing in recycling and the EPR certificate revenue will directly flow to almost like PBT line because there will be no additional expense for it.
Gopal Agarwal
So it is built in the cost it is built in the past. And although it is — you are right, there is no expenses for issuing it, but it is a part of the operation and the cost and revenue metrics.
Operator
The next question is from the line of — Ashalom from Growth PR Ventures.
Analyst
First of all, sir, congratulations for a very great set of numbers, specifically from our PET side. Sir, I just want to understand how do you see the demand and supply scenario, right? So doubling the capacity is a very big commitment and from what I understand, there are multiple extrusion lines that are coming in India in probably FY 2017, ’28.
So just wanted to understand your POV because do you think that export market in itself will also be one of the things that you’ll be facilitating with these lines? Or you will be only serving domestic in that case, demand supply scenario. How do you see panning out and how you have actually calculated?
Gopal Agarwal
Yes. So you see.
Sharad Sharma
Demand is largely.
Gopal Agarwal
Yes, please go — please go ahead, please go ahead.
Sharad Sharma
So you’re absolutely right. A lot of capacity has been building but you see what is happening currently globally is that these recycling target mandates are being implemented across the globe. And for that capacity building is happening everywhere. So for us, we are completely — obviously, we are also exploring the export market as well.
And we are already have made a couple of good network and already they’re leveraging that and even building up even more because the RPET capacity globally is currently quite low compared to the current expected demand by 20230. And all these targets, once we reach that 2030 number, you’re going to be revised upward again.
And currently, what is happening is that the RPET, there are hardly very few players, even though a lot of plants are coming up, but not everyone is getting successful. A lot of these capacities are not able to perform because running an RPET plant requires multiple competencies about collection of waste because you can’t order raw material about processing the waste in the right manner.
These are the washing lines, there are no standard suppliers over there. So you really have to build your own expertise over there. And because of which, I think that for the coming 5 to 10 years, we have quite a good head start already and because of our expertise already delivered results, we will be obviously the preferred choice of big global brands for using RPET.
So obviously, I mean, we have both the domestic as well as the export opportunity in front of us if we talk about the next 10 years.
Analyst
Got it.
Gopal Agarwal
And the size of this market is a very large — because this market is basically is a regulation driven. So in the next 4, 5 years, we need about 1 million tonne of the RPET granule in the packaging. So the demand is and so looking to the capacity addition, it is not much larger because you see capacity addition also take 15 to 18 months’ time to stabilize and then further approvals are required. So it takes about 2 years’ time to come on the stream.
Analyst
Got it sir. Sir — and in our opening commentary, so you mentioned the fact that the scrap side bottles car prices have been pouring a lot and hence, our RPS division has been suffering the due to some of the unavailability of raw materials. So do you think that the same can affect PEG granules business as well or that might be — not that harmful because at the end of the day, the margins will be protected in that case because already there is some demand of the time as much?
Gopal Agarwal
This is ARPU granule — Yes, please, please, yes — Yes. So for this after granule is, we are doing with raw material base. We are not putting up the raw material increase in our account. So our margins are protected in that business as of now.
Analyst
Okay. Okay. So sir.
Gopal Agarwal
Fiber is not so — the fiber is not — basically fiber is not — it is a commodity product. So there is a 2 of challenges of the sales pricing.
Analyst
Sir, my last question is that on the JV that we did with Ganesha Eco, right, for our lakes. I just want to understand the conditions on write-off portal versus right of first half. Do we have the severing the eco. Second thing, the quality checks that will be done by our customer will be on that washing line as well. And the third thing that I wanted to understand is that post this do you think that almost all the captive requirement of the flakes or granules will be completely satisfied for Ganesha as an entity?
Gopal Agarwal
So you see this is brand — on an intermediate product as the fact plex. That plex, we are developing this model on a comment book model. So we are creating the sports and the watchlist will be brought to our other plant for product processing.
Sharad Sharma
So that material — the intermittent material not be itself will be of the food yet, but it will be brought towards mother plant and we’ll make it a foot.
Analyst
Got it, sir. So it will be 100% for our care consumption only, right?
Gopal Agarwal
Correct. Correct.
Operator
The next question is from the line of Nitesh Direct from Gorman Capital.
Analyst
I had a question regarding our subsidiary performance. If I just do on consol minus stand-alone math, I think our EBITDA in subsidiaries was INR33 crores versus a revenue of roughly INR130 crores. So that gives an EBITDA margin of 20 — more than 25.5%.
This EBITDA margin, if I calculate for the last quarter was roughly 21-odd percent. So I just want to understand what has driven this uptick in the EBITDA margins in our subsidiaries and which I’m assuming is the angle business.
Sharad Sharma
So number one, the capacity it has been done. So the both capacity utilization is there. And the steel is also more than the production — so it also drove the EBITDA margin. And further, in last quarter, some of the raw material increase, we could not pass on to the end customer. So that has also been parked in this quarter. So — and largely also, the EBITDA margin will move in the range of 22% to 25%. That’s why I told it earlier. EBITDA margin will move 22% to 25%.
Analyst
Understood. Understood. Can you split the INR130 crores revenue from Warangal into different product categories as well as give an idea of realize volumes and realization across product carries.
Gopal Agarwal
Sorry, I couldn’t get your question. Can you please come again?
Analyst
I just wanted to understand the breakup of the INR130 crores revenue is INR130 crores revenue from Warangal across our RPET and different products? And also, what kind of volumes did we do across rPET and other products.
Sharad Sharma
So actually, due to the sensitivity, I don’t think we can do give a product level breakup of the Warangal unit currently?
Analyst
Sure, sure, no worries. Just one more question from my side. When do we see the other products picking up other than ARPC from our Warangal facility. Hello, am I audible?
Gopal Agarwal
Yes, please, go ahead.
Analyst
I was asking when do we see our other products, the filament yarn and PPS picking up from our Warangal facility.
Gopal Agarwal
As of now, we are expecting it will take another 2 to 3 quarters and we are expecting it will take off by September ’25.
Operator
The next question is from the line of Bhagya Gandhi from Dalal and Gulshan Stock Broking.
Analyst
Sir, my first question is regarding the split of INR700 crores of capex between Orissa and Warangal. What is the split between Orissa and Warangal? And what would be the ramp-up time for each of the projects?
Gopal Agarwal
Yes. So the open market, we have informed is project would be costing around INR600 crores and another INR125 crores will be from Warangal.
Analyst
Okay. And sir, just wanted to ask what would be the ramp up? How long will it take to ramp up the Warangal set up pivota because that is the brownfield one.
Gopal Agarwal
So brownfield, I also we answered, it be operational by — we are expecting it to be operational by the compare by December.
Analyst
By December. Okay. December this year. And Orissa will take 15 to 18 months?
Gopal Agarwal
Yes.
Analyst
Okay. But will we see incremental revenue in FY ’27 from Orissa?
Gopal Agarwal
Of course.
Analyst
Okay. Sir, is it possible to say what is the asset or expectation for year 1 and year 2 post capital — I mean, commissioning of the plant?
Gopal Agarwal
So you see it takes about 3 to 6 months’ time even at the capacity. So the last 2 expenses, we completed the stabilization 3 to 4 months’ time. So we are expecting that the same time here also.
Analyst
Okay. Okay. And just wanted to understand, sir, what is the current cash balance as of now that we have on our books, including investments, liquid investments?
Gopal Agarwal
About INR150 crores.
Analyst
INR150 crores, right. And almost 6 months are away for the Warangal conversion of our promoters. So that would add another INR125-odd crores, INR112 crores.
Gopal Agarwal
Yes.
Analyst
Okay. Okay. And another INR300 crores, we would be raising debt?
Gopal Agarwal
So you see we are already raised up funds INR350 crores 2Q in Feb. And that fund was deployed centrally in the working capital of the company. And we had been the working capital loans at that time. So we are already having the space. And when you — and with the project goes on, we will drop the confound working capacities.
Analyst
Okay. Got it, sir. And with respect to the traditional business, that was like a INR70 crore, INR80 crore PAT business, so.
Operator
Please follow in the queue, sir, please. The next question is from the line of Mr. Daneesh from Antique Stock Broking.
Analyst
Yes. So first question is with regards to the yarn business revenues this quarter.
Gopal Agarwal
Yan, we made about 15%, 15% from the yarn.
Analyst
Okay. 15%, 16% of the console revenue is from the yarn segment.
Gopal Agarwal
Console revenue, yes, yes, perfectly.
Analyst
Sir, second is on the question efficiency within the system. So earlier understanding was within India, there is 80% efficiency with regards to headquarters. Is that understanding still correct?
Gopal Agarwal
Yes, correct. We already — 80% — is happening in the country.
Analyst
So the question here comes is with us setting up a JV with, how will the raw material sourcing move ahead in future. Earlier we used to source everything on our own and then process it. Now with Race Eco chain, whether we will procure it from the JV or it will be both? How will the mix shape up going forward?
Gopal Agarwal
So you see we are sourcing the fed bottles across the country with more than 300 vendors. So raise is having the — raise is already collecting from these vendors and they we are presently collecting about 12,000 tonnes to 13,000 tonnes metal in a month. So in this EBITDA agreement with them, we are having the copper of 75% of their quantity, which we can have on the market terms. So we are having this on for spending our capacity.
Analyst
Okay. So if I understand it correctly, whatever we are sourcing territory, that will stay. Additional 10,000 tonnes of raw material is what we can source from race eco chains, roughly?
Gopal Agarwal
Correct, correct.
Analyst
Sure. Perfect. And sir, is there any change in the lead time for machinery from Salinger Earlier, it was around 1, 1.5 year. So that still remains because the Warangal brownfield retention is coming at a very short span of time, around 9 to 10 months, we are expecting the commercialize. So is there a change in the lead time from the machine manufacturer?
Gopal Agarwal
Yes, basically, Geneesh we have already booked the machine earlier 4, 5 months earlier, much earlier. But the announcement could not be done regarding as we as 45 because we couldn’t decide on the place and location where we are going to come on these. The lead time is same, but as we have already booked a deal much earlier. So we are getting it in time.
Analyst
Perfect. Sure. perfect. And just one last thing. Sir, what can we expect in terms of the quarterly interest run rate? So I believe it has increased slightly on a quarter-on-quarter basis. But as a the working capital requirement increases and we are expecting a peak debt of around INR600 crores. What should be the quarterly interest run rate we should assume?
Gopal Agarwal
Yes. So presently, our total debt position is about INR500 crores. So going forward, when we draw down our working capital facilities, it may go to that — the deep debt may go upto INR700 crores, INR750 crores.
Analyst
Okay. And that will be from first quarter of FY ’26 only?
Gopal Agarwal
It will ramp up in stage. It will not be one go.
Operator
Our next question is from the line of Manavar K Mannu, an investor.
Analyst
What kind of revenue are you expecting next financial year?
Gopal Agarwal
Sorry, sorry?
Analyst
Can you hear me?
Gopal Agarwal
Yes. Yes, please go ahead.
Analyst
What kind of revenue are we expecting next financial year, sir?
Gopal Agarwal
Next financial year, we are looking at around INR1,800 crores, INR1,900 crores revenue.
Analyst
Okay. I have one more question. For example, do you have any kind of a more, for example, if there is any new entrant big entrant comes into this business. Are we able to hold this business, sir?
Gopal Agarwal
Yes, you take this.
Sharad Sharma
Yes, sure, sir. Yes, absolutely, absolutely. So see, basically, what happens when you talk about the conversion process from PET water tale waste to granules is not a very standardized process. You need to understand how the washing is to be done. So there are 2 parts.
The first part is washing, cleaning of the Pecos into flakes and then flakes to renewals. The first part is particularly very, very complicated. And for you to create a very good quality of lake for the end RPD application, you need to understand very closely and build your own process design because there are no EMs currently in the world available who can give you a committed quality guarantee on the bail-to-flate part of the process because in the bail it’s ultimately — it’s post-consumer waste and there are no quality standards whatever you talk about.
So this understanding and this expertise is what we have developed over the years and running this plant with a very high operational efficiency because generally, these washing plants from day to place, they’ve done at very subpar efficiencies. So we know how to run those plants on very, very high efficiency, high efficient models. And then thirdly, the collection network that we have built over the years.
So in case of waste, there is no single point where you can just order the raw material, you have to build your collection network. It’s completely informed in India. So we have an established relationship with almost more than 350 vendors across the country today who are supplying to us on a daily basis, a very pyrite quantities of based on a daily basis. So this is something which is very, very difficult and very costly to replicate today for anyone else.
And that is the reason the way we have grown in this market in the recycled 3D market over the last years in India. And no one has been able to do that to whatever. So I don’t think that even if someone big comes into, which is already happening, they are not really afraid because the kind of size, the kind of momentum, the kind of quality and consistency that we provide, it’s very — it will take years for other — for anyone else for a new entrant to be able to reach that space?
Gopal Agarwal
Because outlet, I’ve been seeing some of the companies which are trying to get into this business. So as per my understanding, there is some learning cover they have to go through. It is not like just with money they’ll be able to do things.
Analyst
Exactly. Exactly. You’re absolutely right.
Operator
[Operator Instructions] The next question is from the line of Pavia Grandi from Dalal and Busselton Broking.
Analyst
Sir, just wanted to understand what was the consolidated asset utilization and stand-alone capacity utilization.
Gopal Agarwal
So the stand-alone extended capacity revision is out 106%.
Analyst
106%. And consolidated capacity utilization?
Gopal Agarwal
Consolidated capacity utilization is about 65%.
Analyst
65%. And for the entire Warangal plant, if you may have.
Gopal Agarwal
So sorry, it is about the Warangal area — it is not a conservative one.
Analyst
Okay. Warangal is 65p. And for the control capacity utilization, if you have.
Gopal Agarwal
Can be worked out.
Analyst
Okay, no worries. Sir, just one more thing because we are putting this kind of capex, INR700 crores of almost INR760 crores. Have you finalized any long-term agreements with any of the players because I think this kind of visibility is only possible if you have any long-term agreement.
Sharad Sharma
So they are already — we are currently discussing long-term agreements with big players as well that is also already happening in. Currently, we are doing annual agreements, annual capacity agreements. But you see that as the regulation gets implemented, these stocks will be happening because the market needs to settle down the industry needs to develop.
So from both the sides, it is currently just a discussion. So we’ve already — it is happening or it will take some time to finally materially and enter into that. But nonetheless, the kind of regulation, the implementation, which is coming into picture. And currently, the state of the market where enough capacity is not available. It’s just a matter of time until all of the industry ramps up.
So I mean, as of today, we already have the ability of much more demand. I mean, currently, we are handling than we can actually produce when it comes to this RPET segment, this targeting segment. So we don’t see any such difficulty coming in the coming years. And it’s not just domestic, I mean it’s a global phenomenon that is happening.
So those long-term discussions will also be — will also materialize in the coming time as well.
Analyst
Got it. Sir, just one more thing on the traditional business because over there, the raw material prices are now weighing on the overall consol number. So what you are making around INR70 crores, INR80 crores of PAT in that business — I mean, on a steady-state basis? So what sort of PAT should we expect maybe 2, 3 years down the line from this kind of business because that would sort of have been on that traditional business?
Gopal Agarwal
So it cannot be — we cannot be projected as of now what will be the position after some of the quarters because currently burdened with the overcapacity as well as demand content. So ultimately, it will be moved. So after 2 quarters, 3 quarters, 4 quarters industry provides, this elective return up. So it is very difficult as of now to comment on the profitability for this business for the next 3 years.
Analyst
Okay. Got it. And sir, with respect to the warrant conversion, any outlook from the promoters?
Gopal Agarwal
So it will be converted as per the schedule?
Operator
The next question is from the line of Karl Tekalia from Ashika Broking.
Analyst
So just trying to understand your value as a segment, I see it has a very good margin profile. So these years, down the line or kind of business and contribution you’re looking from this segment.
Gopal Agarwal
So you see that the market size is also quite large, and it is going to be created in 4 years. So — and supply position will remain tight. So we see that the margins will remain there early for next couple of years.
Analyst
Okay. And then what kind of contribution you are looking at the consol numbers from this segment then going to you forward?
Sharad Sharma
I think we have described enough about the competition in this field in this call.
Operator
Thank you. As that was the last question for the day, I now hand the conference over to the management for closing comments. Over to you, sir.
Gopal Agarwal
Thank you, Mr. Muskan, and thank you, Dinesh. Thank you to all the participants. Good day to all of you. Thank you.
Operator
[Operator Closing Remarks]