GRP Limited (NSE: GRP) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Harsh Gandhi — Managing Director
Shilpa Mehta — Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
operator
Ladies and gentlemen, Good day and welcome to the GRP Limited Q3 and 9 months FY26 earnings conference call. 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. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your Touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Gandhi, managing Director. Thank you. And over to you sir.
Harsh Gandhi — Managing Director
A very good afternoon ladies and gentlemen. Thank you for joining GRP Limited’s Quarter 3 and 9 month for FY26 earnings conference call. I’m joined today by our Chief Financial Officer Ms. Shilpa Mehta as well as. Our Investor Relations Advisors from sga. The investor presentation has been uploaded to the stock exchanges and is also available. On the company’s website. We trust you had the opportunity to go through the same while quarter three and the year to date FY26 were marked by muted demand and persistent challenges, the last 15 days have been particularly. Encouraging for us as a company and of course the country as well. The reduction of US tariffs on Indian imports from a potential high of 50%. To about 18% is a significant development. That provides meaningful relief the pressure that we have faced earlier during the year. This change is expected to improve our export volumes and realizations with benefits likely. To begin reflecting from the current quarter itself. In addition, the India EU Free Trade Agreement, while not immediately impactful for our business, is expected to enhance competitiveness of Indian tyre manufacturers. Zero duty access to the European Union market. Over the medium term, this could support increased demand for reclaimed rubber both for sales in Europe as well as through our customers in India who will have a platform for exports to the eu. This reinforces the sustainability driven growth opportunity. Together, these trade developments mark a turning point providing us greater confidence as we look ahead to the future. While recent developments are encouraging, it is important to note that Q3 of FY26 and the year to date period were still shaped by macroeconomic and industry challenges.
Despite these headwinds, we maintained the top line stability with total income of Rupees 1352 million reflecting a marginal 2% year on year growth overall volumes remained stable. With incremental gains from new business from. Anti pyrolysis oil helped balance the drop in certain export linked business. This stability reflects the benefits of our diversified portfolio and the gradual traction of our newer initiatives. As part of our long term strategy to build a fully integrated tire recycling ecosystem, we continue to make calibrated progress in our newer businesses of tire pyrolysis, recovered carbon block and crumb tire pyrolysis. We are encouraged by the yield profile and the product mix that we have achieved so far. Most of this in terms of operations starting in Q3 of FY26 which gives us confidence in the long term viability of the technology.
However, stabilization of the technology has taken longer than anticipated and near term capacity utilization remains below our internal expectations. Technical teams are working closely to optimize process stability and consistency along with the technology providers. In light of this, we have prudently deferred the next stage of expansion including scaling up of the tyre pyrolysis capacity and commissioning of the carbon black facility. They are now expected to be commissioned by August 2026. Commercial production available from the second half of we believe this disciplined approach protects capital while ensuring that future scale up is based on stable operating parameters.
The Crumb Rubber Modified Bitumen Business we have made strides and been able to penetrate certain markets and while we remain strategically committed but we are realistic about our current input economics build a structurally margin accredited model we are actively developing import channels for waste tyre. The reliance solely on domestic sourcing does not presently support attractive returns for the CRMB sector. Once secured, these sourcing strategies will allow us to participate in a much larger way in the CRMB value chain. However, sales in this sector have begun and approvals of several large road contractors as well as bitumen manufacturers has already been established.
Overall, these businesses represent important pillars in GRP’s long term circular materials roadmap, while the near term is focused on operational stabilization and capital prudence. The strategic direction in these sectors remains unchanged. To place this in perspective, let me now turn to the broader industry environment that shaped the quarter till date. Global tire demand remained under pressure. Passenger car and light truck OEM markets saw modest growth largely driven by China, while Europe continued to experience weakness. Truck and bus OEM demand was subdued with North America at historic low levels for reasons we all know. However, while replacement markets offered some stability helping balance the overall demand environment in North America.
Pre claimed rubber industry exports were broadly unchanged on a year to year basis, but with the US share of exports from India declining from 12% to 7%. Tariffs have had a significant impact on India’s competitiveness for the North America. Domestic trends till quarter two FY26 have however been more supportive. Consumption rose on a year on year basis and GRPs market share improved by 200 basis points. Our deliberate focus on non tire applications have yielded tangible results with consumption in these segments rising sharply and our share expanding in the non tire applications. This focus contributed to a 17% year on year growth in the domestic revenues on a YTD basis in reclaimed rubber sales during the quarter the figure stood at 27% helping reduce the impact of external demand pressures.
However, at much lower margins within this industry backdrop, our reclaimed rubber business delivered steady progress. Revenues grew during the quarter driven by strong domestic performance come from the pyrolysis and crumb rubber businesses started to build during the quarter and supported by sales to cement players as well as to steel industry. This contributed to overall stability in volumes for the entire tyre recycling vertical. The volume level. The most significant impact was seen in exports to the North American markets where volumes to key customers fell nearly 40% on a year to year basis. Margins were affected by continued inflation in select raw materials.
One key grade saw a 45% increase in input cost year on year against which a 35% pass through of prices were already large part of the price increases will get effective from this quarter onwards and hopefully as a result the extent of the price increase will be completely. This along with sourcing diversification helped mitigate the pressure but did not fully offset the escalation of the product mix improvements and selective pricing Gross margins were however kept broadly at the EBITDA level. Margins in the reclaimed rubber business improved supported by a structural cost reduction. These included leaner manpower deployment, energy optimization and a gradual shift towards the new technologies which together contributed to a 256 basis point reduction in other expenses.
Progress is gradual as transitions align with customer approval timeline, but improvements remain steady and sustainable. Quarter after quarter. Revenues within the non reclaimed portfolio were broadly maintained despite softer offtake particularly in the recycled polypropylene segment. This segment continues to face near term headwinds driven by a sharp decline in virgin polypropylene prices and sustained inflows of low cost imports, particularly from China which has emerged as a net exporter industry. Prices declined 4 to 5% sequentially during Q3 and remained 30 to 35% lower year on year. This affected our ability to increase volumes and build scale in the recycled polyolefin market, but we believe that there is a lot to catch up to price distortion that has temporarily compressed the economic spread between virgin and recycled materials has reduced the immediate commercial incentive for converters the recycled content beyond compliance requirements.
As a result, the demand momentum linked to EPR benefits has been slower than initially anticipated. However, we view this largely as cyclical rather than structural remains structurally underpenetrated in the recycled content usage relative to global benchmarks. Addition implementation of the auto EPR norms mandating minimum recycled content by FY28, along with broader regulatory tailwinds in the packaging and consumer goods sectors are expected to create sustained demand visibility over the medium term. There have been several encouraging product and customer approvals which will contribute to the long term growth of these businesses. However, given our earlier plans and the current context, we are reassessing the subsidiary’s operating model to ensure that capital deployment aligns with return thresholds.
Our focus is on optimizing sourcing efficiency, improving product positioning in higher spec applications and end markets like automotive, electrical and appliances. We are also evaluating strategic partnerships that enhance traceability and help us build scale. We remain committed to the opportunity, but are playing a more disciplined approach for pacing the investments until pricing spreads normalize and return on capital employed is justified. Further to our earlier update, we have entered into a PPA agreement with becis Solar Private Limited involving an investment of approximately 3 crores. This project is expected to deliver annual cost savings of approximately 3.2 crores while also helping us reduce our carbon footprint, advancing our sustainability and decarbonisation goals.
On that note, I’ll hand over the call to Ms. Shilpa Mehta, our CFO, to walk you through the consolidated financial highlights and for Q3 and nine months of FY26.
Shilpa Mehta — Chief Financial Officer
Good afternoon everyone.
operator
Shilpa Ma’, am, sorry to interrupt but we can’t hear you properly.
Shilpa Mehta — Chief Financial Officer
Hello. Now
operator
much clear. Ma’, am, please continue.
Shilpa Mehta — Chief Financial Officer
Yeah. Okay, so we start with Q3 of FY26. Total income is at Rupees13.52 million compared to Rupees13.27 million in Q3 of FY25 which is reflecting a 2% increase. Gross profit was Rupees 666 million versus Rupees 704 million in Q3 of FYI which is a decline of 5%. Gross margins were 49% for the quarter. EBITDA came in at Rupees 112 million compared to Rupees 130 million in Q3 of FY25, which is lower by 14% on year. On year basis. EBITDA and margins during the quarter were impacted by 11% higher RM cost in decline, volume drop in plastics and high base of polymer composite and EPR of previous year and a 45% export margin decline due to US tariffs.
Another major factor is fixed cost from a new plant operating at suboptimal levels which is expected to improve gradually in future. EPR accrued for the quarter was rupees 4.54 crores and income from subsidiaries GCSL and GSPL stood at rupees 44 million with a loss of rupees 11 million. Adjusted profit after tax stood at rupees 23 million compared to rupees 44 million in Q3 of FY25 with a decline of 49% on year on year. This figure however excludes the impact of an exceptional item which is gratuity provision as per new Labor Code which is coming to this 14 million.
Now we turn to 9 months financials 9 months of FY26 where income is rupees 3930 million compared to Rs. 3912 million in 9 months of FY 2020 which is maintaining broadly the same levels year on year basis despite prevailing headwinds. Gross Profit is at rupees 1970 million versus rupees 2044 million in the previous period. Previous YTD of FY20 which is lower by 4% on year. On year basis EBITDA is Rs 335 million compared to Rs. 363 million in nine months of while margin remains steady at 9% is consistent with priority. Margin reduction was driven by flat volumes.
5% increase in rumor tail cost, forex loss of rupees 3 crore on account of revaluation of working capital loans and nearly Rupees one crore of additional debt servicing for new projects contributing incremental volumes but operating at sub optimum level. EPR for the period accrued at rupees 13.56 crores adjusted PAT stood at rupees 60 million compared to rupees 113 million in nine months of FY by 25 including the impact of an exceptional item related to new Labor Code of Rupees fourteen million. Gross debt including long term and short term Borrowings stood at rupees 1802 million in nine months of FY26.
Debt to equity ratio was 0.92 as on 31st December 2024. With this I now open the floor for QLA.
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 N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star. And two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rajvi Shah from Bright Securities. Please go ahead.
operator
Hi. Thank you for the opportunity. So sir, on the US tariff normalization, now that the tariffs have been reduced to around 18%, I had few questions regarding the same. So the first one is have commercial negotiation with your U.S. customers resumed?
Harsh Gandhi
Rajiv, may I request you ask all the questions so I can respond to all of them together. It’s just easier from my perspective.
Unidentified Participant
Okay, sure. So I’ll. So my second question is that are you seeing any early indications or green shoots in terms of order inflows or volume recovery? And nextly, how should we think about the timeline for regaining the volume loss that occurred earlier due to the higher tariff return? These are my questions.
Harsh Gandhi
Thank you so much, Rajiv. So as far as the US tariffs are concerned, as we said, the volumes. Dipped in Q3 on a year on year basis by close to 40%. I think commercial conversations have already begun with the customer, notwithstanding the fact that one particular business, which is a rubber composite, we announced earlier that we had decided to sort of shut that business that we would not be restarting. But the rest of the businesses around the custom dye forms as well as the reclaimed rubber, we should be able to revert to those volumes potentially over the course of the next few quarters. I mean, exact timing is still uncertain. We are having the conversations, but we do believe that the recovery in volume will take place only to the extent of the substitution that was done for our product on a like to like basis.
However, customers are experiencing or have experienced. During the year lower demand and lower production of their produce, especially tires. As I mentioned, the OE tyres were far lower in terms of overall production in North America. I think a large part of our demand recovery will be also linked to how quickly does the oe, the replacement tire manufacturing in North America kind of come back to. As far as the timelines are concerned. We are in conversations with the customers. I would say it will probably be another three to four weeks before clarity of this emerges. Some impact visible from this quarter. Definitely it backed that entire volume. I still don’t have a timeline to be able to.
Unidentified Participant
Yeah, that was really helpful. Thank you.
operator
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star N1. The next question is from the line of Jigar Shah from Elevate Research. Please go ahead.
Unidentified Participant
Yes sir. Good evening sir, I need some clarity on the 150 crore capex plan that was targeted by December so that you had mentioned that around 76 crores remains to be deployed across pyrolysis recovered from carbon black and crumb rubber. So could you break down how much CAPEX has already been incurred in each of these three segments individually and how much incremental CAPEX is yet to be deployed in each business?
Harsh Gandhi
Sure. So I mean I think the questions. Are mostly around the green energy or the pyrolysis and the carbon black business. I. I think so far a total of about 76 odd crores has been deployed until FY26 until Q4 of this financial year starting FY24 last quarter that we had begun and the rest of the capex. As far as FY27 is concerned an approximate about 80 crores of capex is to be deployed in this year. However we’ve recalibrated our plans and from our earlier trajectory or earlier volumes that we were planning almost 25% additional volume is planned for the entire project given the cost economy therefore there’s going to be an overrun on the overall spend but with a higher capacity that will get deployed.
We expect that by first half of. FY27 the entire project in Sholapur will be executed and commissioned as I mentioned by September October we are expecting commercial volumes to kick in for both the additional pyrolysis as well as the recovered carbon black and the next site where we are planning to deploy will also. Have additional capacity and that work will. Start towards the second half of this year potentially complete by Q1 of FY. That’s broadly how I can.
Unidentified Participant
Got it. Got it.
Harsh Gandhi
Provide the breakup of this.
Unidentified Participant
Yes, got it.
Harsh Gandhi
As far as the other businesses. Sorry, your your question was also in. Terms of capex in other businesses.
Unidentified Participant
Yes,
Harsh Gandhi
you already initiated CAPEX in line. Two of the new technology in lithium rubber that we are in the Deborahization technology as we explained explained earlier that as customer approvals improve we will look at deploying the second line. Wanted to share that we have already initiated the investment in and potentially by May or June of this year that CAPEX is likely to get commissioned as well so that will add additional capacity. As far as reclaimed rubber through the new technology is concerned that investment is likely to be in the region of between 12 to 15 crores will be deployed entirely by May of this year.
That’s the other deployment that is being planned. And this will be in the new plant in Sholapur where this technology will get commissioned and capacity utilization hopefully will start showing up from for the nine months of next year.
Unidentified Participant
Got it? Got it sir. And sir, at peak utilization, what kind of revenue potential do you see from each of these projects? And additionally what asset turns are you targeting at steady state?
Harsh Gandhi
I don’t have those numbers immediately. I mean I think we’ve indicated as far as the entire pyrolysis and recovered carbon black is concerned there the expected asset turns out depending on the stage of execution that we go, as far as the reclaimed rubber itself is concerned, the asset would be in line with the current number and therefore this 12 to 15 crores will yield appropriate revenue numbers.
Unidentified Participant
Okay, Got it sir. And lastly sir, given some of these plants are currently operating at suboptimal levels. So what kind of margin drag should we factor in over next few quarters?
Harsh Gandhi
So reclaimed rubber in the last six. Months we’ve seen the utilizations being lower mainly on account of tariffs as I said. And US alone was down 40% from the previous year’s Q3. We’re hoping to obviously get back some of those levels as far as utilization is concerned. I would say that with this new technology starting to pick up steam and we are starting to see the orders filling in, I think the new tech we will start seeing the utilization inch up above 60, 65% starting this quarter or sorry starting next quarter. And as the next line comes in that utilization will also take some time to do.
But as far as Q3 Reclaim is concerned, overall we were at about 87% utilization. There is still some room for growth. The EP business or the engineering plastics. Business continued to operate at just about 50% levels. And the custom diphorm and the rubber composites again which were both us dependent were operating at 50 utilization. As I mentioned the composite business we have taken a call to discontinue that will obviously not show up. But the CDF business is expected to get back up to the 75 80% utilization that it was operating pre the tariffs. So that’s in a nutshell how I. Would describe the utilizations over the next couple.
Unidentified Participant
Got it, Got it. This helps. Thank you. Thank you so much.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star N1 on the Touchstone telephone. The next question is from the line of Karan Sharma from Shyam Securities. Please go ahead.
Unidentified Participant
Hello. Thank you for giving me the opportunity. Am I audible, sir?
Harsh Gandhi
Yes, yes, go ahead.
Unidentified Participant
So sir, as you mentioned about reassessing the subsidiaries operating model. So does this include any potential capital reduction or any strategic investor onboarding?
Harsh Gandhi
I think all options are on the table. I think the subsidiary has predominantly the Polyolefin recycling as part of its portfolio. We’ve got some good strong approvals from brand owners. We’ve also started recently working with Compounder for the same. Some of the areas that we are. Reassessing the same is the kind of product mix and customer mix that we are targeting and also the end segments is shifting or rather I wouldn’t say shifting but focusing far more on automotive, electrical and appliances sectors and that’s something that we are hoping will provide long term stability as well as improve margin. As far as your question on whether. We are looking at either of a fundraise or a strategic partnership and or a reduction capital, I think we haven’t gotten far. I mean there’s all on the join board and several options under consideration. We will certainly announce something once we have made progress on either of these opportunities. But yes, there some of these are within the realm of possibilities.
Unidentified Participant
Okay sir, okay. What is the current capacity utilization in non reclaimer rubber segment of this last year?
Harsh Gandhi
As I mentioned I think each of. These businesses are operating at different utilizations. The engineering plastics business is operating at just about 50 odd percent 50 plus a little bit plus minus. The CDF business operating also at closer to 50% while the subsidiary is operating at sub 50% at the moment.
Unidentified Participant
Okay, okay. And lastly sir, on the with auto EPR norms kicking in by FY28, what revenue contribution are we expecting from EPR linked demand by FY28?
Harsh Gandhi
It’s interesting question. I don’t have the quantification yet but. I can tell you two things. One is the auto EPR in Europe has been in place for a while and what I’m given to understand with the India EU FTA is that a lot of the vehicles that will be produced in India or your exports to Europe will start having to comply with those auto EPR norms and that will provide some demand impetus to us wherever our approvals with the automotive brand owners is in place, especially in the plastic compounding side, that traction should potentially start by FY27 etc. As far as the India norms are concerned.
I believe we are in the draft stage so it will be a little early to comment on what would be the impact of that on our business. But I think these are directionally the area that we’ve been investing in and if the norms are, you know, anywhere close to what the European norms are. It could mean a significant growth in capacity. Could mean for us at least in EP and polypropylene doubling down of capacity from where we are at the moment. But again, as I said, since the norms are in draft state, very difficult to be able to provide an angle to you at this stage.
Unidentified Participant
Okay. Okay sir, thank you. Thank you so much and all the best for the future. Thank you.
operator
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star N1. The next question is from the line of Jain from JJ Capitals. Please go ahead.
Unidentified Participant
Hi sir, I hope I am audible.
Harsh Gandhi
Yes sir.
Unidentified Participant
On the EPS EPR side, could you provide some color on the current environment like Are we facing any challenges in generating or monetizing EPR credits? Whether in terms of regulatory approvals, verification timelines or realizations?
Harsh Gandhi
No. Answer is no. There is no challenges in either of monetizing, generating or regulatory challenges. We continue to generate EPR credits in line with our domestic sourcing and in line with the production of the different grades of materials that are eligible for generating the credit. There is only one particular issue which is our pyrolysis plant. That registration is still pending and likely to be received in this quarter for. The impact of EPR credits on account. Of both purchases and sales in the policies and RCB business. Those are not factored in our current accruals because the approval from the CPCB is not in place. But that’s generally there is a lag. It takes a couple of months and we are hoping that in this quarter we will have the registration and then start generating the credits and accruing the income to that effect. As far as sales of EPR is. Concerned, I mean we currently don’t have challenges in selling. We have long term contracts in place with several of our customers with whom on a quarterly basis we are selling the EPR credit more or less in line with the generation that we are accruing. There is some lag in terms of credits, but I don’t think the lag is significant. We are pretty much able to convert most of the credits that are approved in terms of cash with a lag of maybe a couple of months.
Unidentified Participant
Okay, so the reason I’m asking that we have seen some peers reporting higher than expected EPR accruals. So just want to understand is there any industry wide shift in pricing or credit issuance that we should be aware of?
Harsh Gandhi
I mean, as I said, we are. Generating credit based on only the domestic sourcing of raw materials that we are doing, which is in line with the norms we are generating those credits on the portal and are able to sell those epr, what do you call it? Credits are not allowed on imports and therefore we are not generating any credits as far as imports are concerned. As far as pricing is concerned. Currently all of our accrual is at the floor price of 2.52 rupees. We are not either bullish and or ambitious in terms of the price at which we are approving the credit. So I can’t comment on what other players as you mentioned have been considering, but we are very much in line. In fact the guidance that has been provided in the past and I think. The information that is there on the website in terms of the generation possibility based on our domestic sourcing and the production of reclaim that we have I think is more or less in line with what we are generating. I can’t comment on yours and how they are reporting.
Unidentified Participant
Got it sir. So just one last question from my end. How much incremental EPR benefit do we expect from the pyrolysis and crumb rubber business as capacity stabilize?
Harsh Gandhi
I don’t have the numbers immediately off the top of my head but I mean we know that as far as pyrolysis is concerned the oil generates credits at a conversion rate of I think 05 point and so does the chart crumb rubber generates. Let us set a conversion rate of 1.1 times the input less the yield reclaim continues to be the highest at 1.3 times. But the others and I believe the conversion factors and the tables are all mentioned on our investor presentation. There is a slide on that which I encourage you to go through.
If you have any questions, post that, we’d be happy to address them offline at your convenience. But Yeah, I mean 1.3 is what reclaim is and crumb rubber is at 1 and pyrolysis oil and char so the continuous method is at 0.8 weightage. So all of that together will definitely add to the ETR revenue in the coming period. As I said, we haven’t got the approvals from the people for the pyrolysis unit to that extent we’ve under reported the income accrued but only we can only accrue it once the approvals come in place and the credits are in our book.
Unidentified Participant
Got it sir. Thank you for the detailed understanding. All the best.
Harsh Gandhi
Thank you.
operator
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star N1. The next question is on the line of Nisha Shah from NM Securities. Please Go ahead.
Unidentified Participant
Thank you sir for the opportunity. I have a couple of questions. Your gross Debt stands at 1802 million with debt equity ratio at 0.92. So what is your comfort level for leverage and what do you expect debt to increase before PI analysis stabilization?
Harsh Gandhi
I think the debt equity was a conscious call when we did raise the. Capital because there is adequate confidence in the future cash flows that we are generating from the business. Of course this year, the first six. Months there has been a little bit of a hiccup on account of the tariffs from North America and its resultant impact on the gross margins of the company. But we remain fairly confident that the margins will now start turning given that. The tariffs have reversed and this leverage will certainly reduce. But I think the current debt to. EBITDA as well as the debt equity ratios, we are fairly comfortable with the current level. You will see in the course of the next few quarters that this will start improving for sure. That’s broadly how I define this. Yes.
Unidentified Participant
Okay, so my second question is your solar PPA investment of rupees 3 crore yields gives you 3,4 crore savings annually. So when do you see this start reflecting in pnl?
Harsh Gandhi
So I just want to clarify that. The investment that we have made is in the equity of the spv. So the total project cost obviously will be significantly more because the way the SPVs will be structured we will hold the 26 equity, the power producer will hold the remaining 74% of the equity and then they would subsequently leverage the project for debt. So therefore the overall contribution of ours to the total project cost would be significantly lower at closer to about 11 or 12%. That said, this project is for our plants in Gujarat, is expected to be commissioned by July and therefore the benefits of this will start accruing from August.
For solar power has its own seasonality in terms of generation. So during the monsoon period we often find the generation of units from solar plants lower than the rest of the year. So one will need to factor those in the projections. But yeah, I mean currently the SPV PPA is very clear that from August we will start generating the units.
Unidentified Participant
Okay, so and lastly, what will be your peak guidance for a peak capex guidance for FY26 and FY27?
Harsh Gandhi
As I said, I mean FY26, FY27. I already indicated that the total number is likely to be about 80 crores for the pyrolysis and recovered carbon black business and between 12 to 15 crore for the incremental capacity addition for the reclaimed rubber business. This is obviously in addition to whatever. Is the maintenance capex requirement for the plants which will be more or less based on the historic level. As far as FY26 itself is concerned, roughly 31 crores has been spent on the pyrolysis in the RCB plant and business and another 18 odd crores has been spent on the rest of the capex. So together close to 50 crores is the total capex for FY26.
Unidentified Participant
Okay sir, thank you, that was very helpful. All the best,
operator
thank you. A reminder to all participants, anyone who wishes to ask a question may press star N1 on the restaurant telephone. The next question is from the line of Raj Mehta from Wisdom Advisors. Please go ahead.
Unidentified Participant
Hello. So thanks for the opportunity sir. On outlook front on FY27 outlook as we look beyond the current year and factor in tariff normalization along with the ongoing capex ramp up. So how should we think about revenue growth in FY27 and can you share any broad guidance on EBITDA margins once the new capacities stabilize?
Harsh Gandhi
I think as far as the volume. Growth in the reclaimed rubber business itself is concerned, we have, I think for this year on the whole we kind of will probably end up at 4 to 5%. But next year as far as the, what do you call it, the utilization of capacity or rather the growth is likely to be significantly higher on account of two, three factors. One is the volumes returning in the the other is the approval of the new technology as that is picking up pace, we expect that that volume will grow. So expectation is a mid teen kind of a number in terms of volume growth for next year over FY26 proportionately as far as revenue growth is concerned should maintain that and this is only as far as the reclaimed rubber business is concerned.
As far as the pyrolysis and the business of recovered carbon black etc. Because it’s a fairly low base, I would say that utilization will improve in there and I mean based on the pace etc. This would be a fairly sizable jump in revenues. I think at this stage unable to provide a number. But this would be assuming that the. Entire. Capex for the pyrolysis and RCB will be deployed. We will have a effective net capacity. Available of about 45,000 tonnes for the year. Additionally for all of pyrolysis, steel, oil, crumb char and RCB. So that 45,000 tonnes should generate a fairly significant revenue for that particular part of the business. I think the plastics business I would be satisfied the utilization levels from the current sub 50% would go to closer to 75, 80%. So that’s the potential that I see again on account of combination of factors. One is the return to normalcy of the polyolefin pricing which we are seeing reversals starting this month. We are also seeing some demand offtake as far as nylon and engineering plastics is concerned.
So all of this together, I mean it will be incremental at best. But one can say that there the growth in volumes, etc. Would be also more or less in line with the mid teens to high teens numbers on the current year levels. So that’s in a nutshell. I mean as I said, effective capacity of ge, I mean of the green. Energy business or the pyrolysis and RTD is what one should look at as providing a significant ticker in addition to the mid teen ebitda. I mean mid teen volume growth that we are expecting from the stable state, steady state businesses of reclaim and plastic businesses.
Unidentified Participant
Understood sir. That’s all right. That was helpful. Thank you sir.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to the management for closing comments. Over to you.
Harsh Gandhi
Thank you again for the interesting questions. As always, it’s interesting to note that the questions reflect a strong understanding of the sector as well as the opportunities that lay ahead of us. Again, want to reiterate that we continue to remain committed towards the long term plans of continuing to build a globally relevant size and scale for entire recycling ecosystem. We believe the tailwinds as well as the opportunities on account of the government as well as the brand owners is very much with us and therefore being able to implement these plans successfully is what we are hoping to achieve over the course of the next few quarters.
Yet there have been a few hiccups during this financial year on account of project execution delays as well as the tariff situation, which is a little out of our control. But we do believe very strongly both from a utilization of capacity in the pyrolysis business. We kind of have overcome the initial hiccups so therefore starting to see some steady business growth there. And the return to normalcy of tariffs will allow us to sort of provide or unleash the full potential of the capacity that we’ve created for the reclaimed rubber business. I just want to highlight again that a lot of the initiatives on cost reduction in the reclaimed rubber business have started to completely bear fruit and our operating costs continue to trend lower.
So as and when there is a gross margin expansion, one will start seeing a fairly significant growth in the overall margins for that business. So with that, we go into 20, 26, 27, extremely bullish and continue to, you know, deliver sustainable materials to the industry. Thank you so much for participating in. The call and look forward to your support and continued guidance.
operator
Thank you. On behalf of GRP Limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.