Huhtamaki India Ltd (NSE: HUHTAMAKI) Q1 2026 Earnings Call dated Jul. 25, 2025
Corporate Participants:
Dhananjay Salunkhe — Managing Director
Jagdish Agarwal — Executive Director and Chief Financial Officer
Analysts:
Aparajita — Analyst
Unidentified Participant
Raja Kumar — Analyst
Rohan — Analyst
Sukhbir Singh — Analyst
Mehul — Analyst
Lakshmi Narayanan — Analyst
Ashok B Jain — Analyst
Presentation:
Operator
Speaker O-Operator
Ladies and gentlemen, good day and welcome to Hutamaki India Limited Q2 CY ’25 Earnings Conference Call hosted by ICICI Securities. 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 assessions during this conference call, please signal an operator by pressing star then zero on your touchstone. Please note that this conference is being recorded. I now hand the conference over to Ms Apparajita from ICICI Securities. Thank you and over to you, ma’am.
Aparajita — Analyst
Good afternoon, everyone. Thank you for joining on Marque India Limited Q2 CY ’25 results conference call. We have India Management on-call, represented by Mr Salunke, Managing Director; Mr Jadesh Agarwal, Executive Director and CFO. I would like to invite Mr to initiate with opening remarks, post which we will have the Q&A session. Thank you, and over to you, sir.
Dhananjay Salunkhe — Managing Director
Thank you. Thank you very much, and good afternoon, everyone for joining this call. So let me start with our Safe-Harbor statement that today’s discussions shall not be forward-looking for any future performances of Utamaki India Limited. With this, if I have to take a look at quarter two performance of Utamak India, the demand situation at the end-of-the consumer side remained mixed with urban demand not still fully recovered and rural demand typically driving whatever consumption what we saw in-quarter two. Also, there were few headwinds in terms of unseasonal rains, a big span of summer and arrival of monsoons a week earlier and then in inflationary pressures. So overall, the demand situation remained slightly subdued and which clearly impacted on our performance in terms of top-line where net sales remained lower year-on-year as well as slightly lower than quarter-on-quarter. However, with the various cost-control measures, our EBITDA has been higher than year-on-year and slightly lower than what was in-quarter one. Our profit before-tax as well as EPS are also higher year-on-year, while as compared to quarter one, slightly lower. So overall demand situation flat cost measures are clearly are helping us to deliver the results what we have been able to do in-quarter two ’25. With this opening, I would hand it over to Javdesh, our CFO, to take us through further details in terms of our performance.
Jagdish Agarwal — Executive Director and Chief Financial Officer
Thank you,. Good afternoon, everyone. As always, I’m pleased to host the Q2 2025 investor call alongside our Managing Director. He will walk you through the company’s financial performance for the quarter and the six months period ending June 2025. I will share key insights on our over the first-half of the year. Turning to the financial results for Q2 and H1 2025. Our volume for the quarter remained flat compared to-Q1 2025. However, it showed a decline on a year-on-year basis. A similar pattern was observed for H1 2025. The volumes were slightly lower than the corresponding period of previous year. Revenue for June quarter stood at INR5.9 billion compared to INR6.2 billion in Q2 2024, reflecting a 4.7% Y-o-Y decrease. And on a sequential basis, our revenue remained flat when we compare with the Q1 2025. For the six months period ending June 2025, total revenue amounted to INR11.8 million versus INR12.1 billion in H1 2024, indicating a modest decline of 2.4%. Currently look at EBITDA for the quarter that came in at INR493 million marking a strong Y-o-Y growth of 28.7% from INR383 million in Q2 2024. Comparing to-Q1 2025, EBITDA of INR498 million, this figure was marginally lower by 1% or I’ll see that it’s more or less flat over Q1. For H1 2025, EBITDA reached INR900 million, an improvement of 13% over INR877 million in H1 2024, signaling healthy business performance and operating leverage. EBIT for the quarter stood at INR362 million, registering a strong Y-o-Y growth of 37.4% compared to INR263 million in Q2 2024. On a sequential basis, it showed a marginal decline of 2.4%. For H1 2025, EBIT came in at INR733 million versus INR662 million in H1 2024, reflecting a solid improvement of 10.7%. Like said, if you look at over the past 3/4, we have successfully maintained a range-bound top-line despite facing volume pressures. This resilience extends to our bottom-line as well. Flip performance has been notably strong through 2025 except cured 2024. These outcomes point towards strengthening business quality and demonstrate that our strategic market initiatives are beginning to yield encouraging. From a broader industry perspective, market signals have been mixed in first-quarter of 2025, which is the March quarter, we object smaller players are gaining traction and driving growth in the food and HPC categories, outplacing larger companies. The muted performance of these large player compared to overall market growth has had a impact on us as well. Now moving to finance costs. So finance cost declined by 39% on Y-o-Y basis, primarily due to partial retirement of ECB in September last year. Surplus cash continues to be prudently deployed in bank deposits and mutual funds and delivering high single-digit returns on that. Profit before-tax for the quarter, excluding exceptional items stood at INR331 million, marking a robust 55% growth over Q2 2024. On sequential basis, it reflects a slight dip of 2.7%. For the half year ended June 2025, profit before-tax before exceptional items at INR672 million, again showing a improvement of 90%, 19% or INR5634 million in H1 2024. Net profit for the year-after accounting for income and taxes stood at INR249 million compared to INR35 million in Q2 2024 and INR262 million in Q1 2025. It is worth noting that in Q2 2024 included exceptional income. Net of taxes, it was INR227 million, primarily arising from the recognition of sale of the to land parcels in Thane. Earnings per share for the quarter after accounting for exceptional items stood at 30% over H1 2025. Net profit was INR511 million compared to INR646 million in H1 2024. Consequently, EPS for the half year stood at INR6576 per share. Turning to the company’s debt and liquidity position. The debt-to-equity ratio remains well within comfortable level. With the external commercial borrowing of INR1 billion representing the sole debt to the mix of the company. Thanks, liquidity continues to be strong, supported by sizable unutilized state lines that remain fully available. While the overall working capital situation is stable, the position as of June 2025 was less favorable compared to March 2025 and June 2024. And this was primarily driven by an increase in inventory and receivables during the quarter. In conclusion, India Limited remains a steadfast in its commitment to driving operational efficiencies that enable our enhanced performance across-the-board. Our world-class operations program is a key driver in this journey, supporting continuous improvement and excellence. We continue to hold the highest standard of corporate governance, we stay focused on technology-driven innovation and pursue value realization through sustained customer engagement. Our investment in future-ready and sustainable packaging solutions are aimed at positioning Gota Mark India as a part of choice in this evolving landscape. We focus these efforts will strengthen our competitiveness over the long-term and support our goal of delivering responsible and profitable growth. Thank you. Thank you for your continued trust, support and investment in India Limited. Thank you. And with that, I hand over to for question-and-answer session.
Dhananjay Salunkhe — Managing Director
Maybe you shared about the operational excellence and how do we look at sustainability as one of our key strategy to really connect with the customers and overall ecosystem. So I think let me also connect with a bit on three, four areas on how Vuda continue to focus on safety and the CSR. So as it you would have seen in our annual report of 2024 as well as first-half of this year, our safety record has been significantly improved over last two to three years and our team continues to focus on safety in even first-half of the year where our total incident rates have been significantly reduced. Also the fire ignition points as well have been significantly reduced. There is a good focus on training in terms of safety, not only to our employees but on the contractors and a nearby community. Same thing goes for the CSR work. In 2025, we are expected to sign the SBTI targets, which will be aligned with 2023 goals for Scope 1 and Scope 2 reduction. We are also having various projects on electrical and electricity power reduction, water conservation and overall reduction which will ultimately help reducing the waste overall and protect mother art. I think thanks Jagdesh for elaborately discussing the quarter two performance and then we can now take questions.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone phone. If you wish to remove yourself from the question queue, you may press and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference. Please limit your questions to per participant. Should you have a follow-up question, we would request you to rejoin the queue. We will wait for a moment while the question queue assembles. The first question comes from the line of Dhruv Mimani from Nivesa Investments. Please go-ahead.
Unidentified Participant
Hello, sir. Yeah. Thank you for the opportunity. So I would like to know what was the Bluloop blue loop contribution in the revenue of the current quarter?
Jagdish Agarwal
So Blue loop,
Dhananjay Salunkhe
You can take it.
Jagdish Agarwal
So I mean it continues into the similar end what we had in the first-quarter. So we are trending somewhere between 27% to 30%.
Unidentified Participant
Okay. Yeah. So what was the cost measures or the reason for increase in the EBITDA margin in this quarter?
Jagdish Agarwal
I mean, we definitely like even in the last few in this call, we are indicating we are working on the operational efficiencies and that definitely is helping. That’s the one thing. And second is that we are working to improve — improve the mix. So both factors are helping like internal and excellent focus, what sectors are helping us to improve the bottom-line.
Unidentified Participant
Okay. And sir, I had a last question that would this be possible in coming next few years to reach the margin of the parent company, Utamaki, like they do a margin of around 14% 15%.
Jagdish Agarwal
No, you know that as a policy, we don’t talk about a forward-looking indications or anything but is that we would like to improve performance and that is going to be there key priority for us.
Unidentified Participant
Okay. And sir, I had a request that we are actually a cat three fund and so we generally visit the facility of the company. So is it possible to do a facility visit.
Jagdish Agarwal
I think we generally don’t get into an individual or this kind of independent at all and that is the reason investors call is that we would like to address. But facility management, at this point of time, we are really not thinking on that side to add the facility management or arranging investors costs like that on those sites.
Unidentified Participant
So okay. Thank you, sir. Thank you. Thank you.
Operator
The next question comes from the line of Raja Kumar from RK Investments. Please go-ahead.
Raja Kumar
Yeah, good afternoon. Am I audible?
Dhananjay Salunkhe
Yeah. Yes, sir.
Raja Kumar
Yeah. Good afternoon, sir. Thanks for the opportunity. Sir, a few questions. So first on this margin performance, I understand that the top-line is kind of dynamic in terms of the growth. So can you assume that this margin will be kind of maintained or it will only improve from now on
Jagdish Agarwal
If you have seen to the previous questions also, we have reinforced some other messages that we are working on lot many things and one of the programs we spoke in past that we are working on efficiencies remain, world presence is driving a lot of efficiency — efficiency improvement at all. So we are looking at every cost and we are looking all the possible opportunities. So we are working on that. At the same time, we are looking into the quality of business. So we are focusing on both. Now when it comes to comment on future, it’s very difficult because we generally don’t do, but at least we can talk about that our focus and our priorities are to improve the business quality.
Raja Kumar
Yeah. Yeah, I understand that. I’m not asking for any guidance, sir. My only question is the what the margin is kind of in the backbench because I think the last two quarters you kind of maintained good margins. So it’s only the question of growth, which is kind of dependent on the FMCG and other players in the industry. So given that I’m asking whether the margins will improve from now on without giving any particular guidance?
Jagdish Agarwal
So it depends on many factors. That has been very difficult to be very clearance on that it depends on — we don’t know-how the commodity prices are going to move-in future. Price, raw male a lot of geopolitical issues are going on. There are different types, et-cetera are going on. So it’s prudent from all that gave indications also which it will go, but at least we can talk about as a management, what are the priorities we are working on. And our priorities are that to continue to improve and that is where we are working.
Raja Kumar
Okay. Got it, sir. And sir, in the recent AGM of Glaxo Pharma, they mentioned that they are moving from aluminum tubes to laminate tubes completely. So that be a tailwind for us? Do you getting any kind of like that from the customers that we are working with.
Jagdish Agarwal
In a market extent, it definitely is going to help all of us who are a part of flexible industry and that’s what we believe that.
Dhananjay Salunkhe
So the question is on the. So essentially, look, we do not discuss any particular customer name. So that we will avoid. But at the same time, the main point what you asked was basically there is a trend. Yes, there is a trend of moving from aluminum base the tube laminate to PBL typically we call plastic base. There is a trend and definitely that helps the, the industry players like us.
Raja Kumar
Okay. So is that a tailwind that will show-up in the short-to-medium term or it’s more a long-term opportunity?
Dhananjay Salunkhe
I would say, look, again, as Jagdesh indicated, we normally do not give this time base or exact one, but we have this portfolio of a in our product portfolio and clearly that is one of the focus area and eventually it shall add-up.
Raja Kumar
Yeah. Sir, in one of your previous calls, you mentioned that some of the MNC companies operating in India, they are not following what they are following in other geographies in terms of domestic will be packaging solutions. So any update on that? Do you see more compliance coming now? If you can just give any color on that.
Dhananjay Salunkhe
So I do not remember vividly that we said they are not following. The point is possibly there is a early adaptation of certain sustainable packaging trend in other countries because of the evolution of a regulatory landscape in those territories. So essentially all our customers are following the — the regulations which are basically applicable to them in their respective countries which they play. So that is the observation. So overall, if you see in India when it comes to you know the regulatory recyclable or sustainable packaging yet it’s not yet mandated. So because it is not mandated most of the even FMCG players, whether India or global multinationals are basically aligning their commitment according to the regulations. So that’s the comment we will have on this.
Raja Kumar
Okay. Okay. And lastly, sir, on this packaging, the acid. So any serious competition you foresee from that?
Dhananjay Salunkhe
I think this was also discussed in the last call. So PLA based films will be also form one of the one of the input material for us as it is let’s say recyclable film which we produce now which is we call Film or MDO film, high-barrier films, PAT, PP and so on. So for us all these developments acts as a vehicle to further our journey towards the sustainable packaging.
Raja Kumar
Okay, sir. And sir, is any target for growth in terms of —
Operator
May you follow-up for the remaining questions as there are several part issues waiting. Thank you. Thank you. The next question comes from the line of Rohan from Golden Money Investments. Please go-ahead.
Rohan
Yes, sir. I want to just confirm that in coming five or six years, seven years is primarily focusing on flexible packaging
Dhananjay Salunkhe
Clearly, yes.
Rohan
Okay, sir. Thank you.
Operator
The next question comes from the line of Sugbir Singh from Institutional Equities. Please go-ahead.
Sukhbir Singh
Good afternoon, sir and thank you for the opportunity. Sir, my first question is on like pricing of BOPP, like India is facing shortage. So sir, how is the pricing going on for BOPP
Dhananjay Salunkhe
Okay. I mean, this is very targeted question, but we are seeing definitely some increase in the prices in first-half of the year as compared to the previous half of the year — previous means even H1 2024 or H2 2024. So there is a comparatively increase in, I would say in double-digit.
Sukhbir Singh
Okay, sir. And sir, my second question like on language. So what — can if you give some light, like what will be the percentage share in our product portfolio? Is it low-single digit or high-single-digit, double-digit, how much it is light color on it.
Dhananjay Salunkhe
So possibly somewhere around high-single-digit,
Sukhbir Singh
High-single-digit. Okay, sir. Sir, my third question is on the export of — export of our product portfolio. So like — so can we how much — is there any increase in the export in export share of inner revenue, how is the trend in it?
Dhananjay Salunkhe
So I think the percent — typically we have around 30% 32% one-third comes from exports. And I think that remains — remain range-bound.
Sukhbir Singh
Okay, sir. Sir, my next question is on the debt repayment like on ’27, we are planning for the first gross debt repayment. So is that maintain or like we have changed the schedule for it?
Jagdish Agarwal
We have maintained debt since due that 2027 or 2027.
Sukhbir Singh
Okay. Okay, sir. And sir, like on the low-cost reduction on the low-cost plants, reducing the cost structure. So for electric — for electricity and power, like are we — what are the measures for it? Are we looking for installation of new solar plants or like how we will target that.
Jagdish Agarwal
We are exploring all possible options available to us, including from energy intensity to sustainable power that will help us on a carbon emission as well as that help on our productivity. So we are exploring all options.
Sukhbir Singh
Okay. Okay, sir. That’s it. Thank you so much, sir.
Operator
Thank you. The next question comes from the line of Mehur from RWE. Please go-ahead.
Mehul
Hello. Actually, I have just two questions. One is just relating to any capex plans and what is the current utilization? Because I assume like we had done some capex more for converting some of the lines for Blue Loop, but essentially with the current assets, how much more revenue can we generate and if there are any plans for capex? And the second question is in terms of this blue loop, I understand that there are other players also who have or can possibly introduced a monopolymer packaging film. So is that any potential competition for us or do we still have a edge over others in this segment? Thank you.
Dhananjay Salunkhe
So this is again — I think two questions in a one. So first of all, we have invested definitely in the innovation in terms of our Blue loop and our current focus is to sort of clearly utilize those assets for the purposes, which is intended and there is a good traction. And then we are carefully evaluating. And I think there is a clarity in terms of how OIZ looks at the investments now with certain changes happening at the center that one of the important focus area is your capital allocation. And this capex requirements as well as the plans are getting discussed internally for wherever there is a better opportunities in terms of ROIs or ROCEs that would be taken-up. And at this moment, there are certain capacities done already in last couple of years and the focus is to basically use them for a betterment.
Mehul
Okay. Yeah. And the second question was regarding that monopolymer by competitors.
Dhananjay Salunkhe
Yeah, that’s good — again, a good question. So firstly, I have to go back to maybe a three or four a conference call ago we explained it in a very detail that what we are offering is actually, you know like four-pronged approach to the sustainable packaging solutions. And those are not only in terms of monoP, but it is also base, PP base, paper base and we Call-IT power of three. So they are functional, they are affordable and they’re basically more simpler. So all the power of three-in-one and then multiple offers which with a very-high demanding structures, high-barrier structure. So we have a multiple value propositions to be given to our esteemed customers. So I think we have a definitely a you know, first of all, from a timing perspective, as a Utamake overall that is flexible segment, we have invested in five locations. That means we have a geographically are possible to service our customers anywhere in the world they want. And second, in terms of the stability and equipment availability and available capacities, we are clearly ahead of anyone. So and that is what we want to really capitalize on.
Mehul
Okay, sir. And just sir, last kind of a continuation of that, that since we have this particular capability here and partly linked to the exports question that since the adoption of these kind of products is much higher in some of the more developed markets compared to India. Is there like a likelihood of a growing trend of, you know, sourcing from India for blue loop?
Dhananjay Salunkhe
This is a good point and that’s the reason why we are having this as a global approach for a blue loop. So structures we are developing which are more standard in nature are more based on functionalities. And there are opportunities and because as I said, we have also 30% 32% of our share coming in from exports. So wherever we are serving current, there are definitely opportunity emerging. Also, certain areas in that we are taking help from certain other investments. Like for example, as I said, we have a paper-based products are I mean which are seeing — seen valuable in the customers in India. And we have a wet chemistry investments done in outside of India, let’s say, particularly in Southeast Asia and in Europe. And we are actually sourcing the input from them. So actually, it’s not only exporting from us, but it’s also we are utilizing our other sites or regions to actually get help where we don’t have a capabilities. So that’s the good benefit what we are getting as a whole presence as a global company.
Mehul
Great for that. And sir, there was just some small question earlier was that with the current capacity that we have any approximate range of revenue — I mean a very ballpark revenue that we can achieve another 20%, 40% from here without further capex, even a rough estimate will be fine, sir.
Dhananjay Salunkhe
So these are again numbers. And typically, look, I think we have been pretty open about it, capacity utilization, etc., are really every numbers which are can give a misleading picture. So what I can only say that there are opportunities because see that’s a good proposition to India. We have a multi geographical locations. We have a very good stable supply-chain and a global reach. So with all these three you using these three critical strengths what we have. So we have a capability to actually service the requirements of our customers and with productivity improvements, with a flexible opportunities to have a flexible outsourcing make versus buy, we typically are in very good position to actually manage the upsides, demand upsides of which comes in particular in the right opportunities.
Mehul
Got it, sir. Thank you very much, sir, for all the replies and wishing you all the best. Thank you.
Operator
Thank you. The next question comes from the line of Ashok Bi Jain from Capital. Please go-ahead hello Ashok sir yeah on unmute mode you can go-ahead as there is no response from the participant, we will move towards the next question. The next question comes from the line of Lakshmi Narayan from Tonga Investments. Please go-ahead.
Lakshmi Narayanan
Thank you. If you’re looking at a slightly longer-term from 2019 to 2024, you know, our domestic revenues actually declined, whereas when you look at our — some of our clients like this and Unilever, their packaging costs or expenses actually went up, right? So which is under — which is kind of underwriting for a company of our future. Now what is — I mean what — I mean, how do you attribute this particular thing when it actually has? Is it an internal issue or an external issue.
Dhananjay Salunkhe
Well, it’s a good, good question. So when we talk about overall value chain and you know the companies which operate in the market where the rate of commoditization is particularly high, our innovation takes time and then our — typically we innovate in terms of structures, in terms of the aesthetics and all. And then it’s very difficult to get these IP rights and all. So we operate in a — in a spectrum where we are the — I would say we are the innovation leader. At the same time, the rate of commoditization is very-high. So that’s where the — I would say challenge, which is external, like if we go back, I think you covered that period of 2019 to ’24, whereas I would go back maybe another 10 years before, where you know access to the technology within India was limited. And so that where was pioneered or I would say earlier,, two companies which actually merged as a one of we were pioneers and then now with access of technology and then low entry barriers, market has been augmented. Flexible packaging market has been fragmented and that has a — that has an impact on definitely on us. So that’s definitely an external challenge where generally FMCG companies have grown in their volumes. Their focus is more on meeting the price points, smaller SKUs. And so that has actually increased the complexity for players like us. And as I said, one-side, we use this as a strength that we have a vast geographical presence. We service multiple type of customers from multiple locations, multiple products. So that’s a strength. But sometimes at the same time, it acts also as a weakness because then it becomes a very complex company and that is where possibly we are looking at now that we want to become more agile in order to service our customers even better. And that is why if you see in 2023, we took measures in terms of certain plants we closed in ’23 so that we can repurpose our resources, focus on the categories, what are you having larger opportunities. For us, the player like us where we are really strong in certain high-barrier structures. And that is what the strategic position we have taken. So — and that’s why it has impacted from an internal point-of-view, that is, I would say strategic positioning that we want to focus on high-value of business or product mix, that is where our continuous focus is. So we may have lost certain volumes at a low-end, but the future focus is basically to play in the areas where we have a higher possibility and opportunity to win.
Lakshmi Narayanan
Thank you so much. So I think as a follow-up, just want to understand in this, what is the — how do you define your product as value-added and what is commodity and how that mix has actually changed and where do you think this mix would actually? And second, I also see that lot of your customers are going for a reverse auction kind of a testing where they are extremely easy about the cost and they actually make it very definationary in terms of your revenue that is available. So these two questions in terms of, I mean, how is this particular value-added plus commodity mix is changing over-time? What is the mix right now for us? And then what percentage of our revenue is coming from reverse auction? And how are you — have you come out of these things reverse auction or that’s the norm of the day that things are actually nature for you, both in terms of volume as well as pricing.
Dhananjay Salunkhe
Yeah. So you are right. And thanks for picking out this. I think I missed out on that. I mean, I’m good that you added that. One, I said from a market point-of-view, the rate of commoditization increased and this has been actually accentuated because of the adoption of a reverse auction by our overall ecosystem. So it actually limits the our play, whereas it has been used by our esteemed customers for the value discovery. And I would say it is going to remain — remain there. And that’s where our companies like us need to focus more on innovation, focus on the creating more-and-more of the value propositions, which actually resonates with our customers, they value that. And I think a few pointers from that, what are the value additions we consider like recyclable products, the ecosystem, which gives them the benefit not only on the high-barrier properties so that they can increase their shelf-life, but also how that product is end consumed when the product is end consumed, how it is getting collected and circled back at very cyclable. Then the reduction of their own plastic consumption, then co-creating certain innovations along with our customers are working with them to help them also to look at the global pictures and create products along with us, which can actually help them. So that’s the overall value chain or creation what we continue to work with our customers.
Lakshmi Narayanan
Except the value-added and the reverse offering in your overall revenue side.
Dhananjay Salunkhe
Yeah, we don’t really yet not done that way because reverse auctions are — I just can’t put that number, but it’s becoming more-and-more prominent, I would say.
Lakshmi Narayanan
So on the domestic, if I may just ask what is that which you actually give to traditional players like the Universe and? And then what is the mix you actually give to new-age companies? Because I think product innovation and that’s actually valued more in new-age companies like. So any mix on that traditional SMCG versus the new-age companies for you in domestic and how it has changed over the last two years because that’s where I think your margins assets can actually happen.
Dhananjay Salunkhe
So look, you again are touching very important point, right, the large FMCG players and digital-only or D2C. So I would say the packaging requirements typically remains same in the sense because product end-products are almost same. So what is different is basically the response times and the reactive responsiveness from the point-of-view of both players. And I think now it is also converging because even large FMCG players are also clearly focusing on the digital platforms and direct to the consumers and so on. So at this moment, we don’t really differentiate from the — that, okay, this is FMCG and this is D2C or so because for us it’s at the end-of-the day structure.
Lakshmi Narayanan
Got it. Thank you, sir. I will join in queue.
Operator
Thank you. The next question comes from the line of Rohan from Golden Money Investments. Please go-ahead.
Rohan
Yes, sir. Sir, is there any big capex for the coming five to seven years? And sir, second question is, as you know, the adoption for our product is basically comparatively very small as of today. So it’s going to improve and then it’s going to increase.
Jagdish Agarwal
When you talk about capex for next five to seven years, it’s very, very difficult for anyone to estimate what is going to happen tomorrow. So we can’t put a number, Rohan very honestly on that what will happen in next five to seven years on capex front or and what will be our focus area. What was your second question, Rohan?
Rohan
Second was about the adoption of our products, basically the more single layer plastic. Actually, as you see of today, the response from the customer is basically in a slower. So do you think about increasing it in coming years? And if you can tell any number which is two years, three years, so then it.
Jagdish Agarwal
Ideally, it should improve in times to come, the reason is that government is also focusing on to come out with a lot of mandate and rules and remulations are focusing towards more sustainable solutions. And I’m sure recyclable metal are going to get traction from that in time to come.
Rohan
Yes, sir. This is. Thank you.
Jagdish Agarwal
Okay. Thank you.
Operator
Thank you. The next question comes from the line of Raja Kumar from Arca Investments. Please as there is no response from this participant, we will move towards the next question. The next question comes from the line of Ashok B Jain from Irish Capital. Please go-ahead.
Ashok B Jain
Hello. Yeah, am I audible?
Dhananjay Salunkhe
Yes. Yeah, yeah.
Ashok B Jain
Thank you. Thank you. Thanks for opportunity. First of all, sir, congrats on giving a very good profit that is almost 200 basis-point more than last year Y-o-Y. A big congrats, sir. Sir, my question is on inventory provision. Our company has made a provision of INR9.39 crore for inventory provision as shown in the cash-flow statement. So I want to understand why this was necessary.
Jagdish Agarwal
Inventory provision?
Ashok B Jain
Yeah, in the cash-flow statement, we have stated INR9.3 lakh, that is INR9 crores, 39 lakhs and is shown as inventory provision for this H1 cash-flow statement. Because if we — if we add this to profit, our profit grows by another 150 basis-point for Q2.
Jagdish Agarwal
Let me just have a look in there. Okay.
Ashok B Jain
Yeah, yeah. Please have a look
Jagdish Agarwal
You are the cash-flow, right?
Ashok B Jain
Yeah, cash-flow, yeah.
Jagdish Agarwal
Yeah. So inventory provisions is normally it’s very much remains flow policy what we have and it depends on the aging and all, it doesn’t mean that the provisions what we normally do is going to have impact and it’s normal part and partly. So it’s not something out of your extraordinary.
Ashok B Jain
But actual this money is deducted from net profit I suppose.
Jagdish Agarwal
Right, provision will have impact on the profitability, yeah.
Ashok B Jain
Yeah. But while it was necessary, that is something that’s become so absolence that it was required to be written-off or can we return this money in the future?
Jagdish Agarwal
So again, lot of provisions which happen which are like aging — aging-based formula we apply on that it depends on our inventory, it depends on teams in a different aging bucket as per policy. And as such as policies, we have to provisions. It depends when we are going to dispose of this material, what kind of revenue we are going to get it, what kind of recovery we are going to have it. So those depends when we do the transactions for this inventory. But yes, these are accounting provisions.
Ashok B Jain
Okay. And sir, any idea that whether this provision — whole of provision was done for Q2 or it was for a whole of Q1 — H1?
Jagdish Agarwal
No, it’s a H1. It’s a H1 overall. This is Six-Month provisions which we are looking at.
Ashok B Jain
This is six months. And any more provisions are required as of now?
Jagdish Agarwal
No, Martin, it’s a very subjective thing. So wherever you have inventory end-of-the quarter and you feel that we need to do that. So we don’t time what kind of inventory we are going to have end of September where we need to provision or where there’ll be a need to reverse the provision also. So we do our evaluations for inventory end of every quarter.
Dhananjay Salunkhe
Yeah. So the point is — we are always consistent with our policies and we don’t do any exception, which is actually also audited results.
Ashok B Jain
Okay. And sir, at this point of time, this is for H1, regarding this inventory also, we have one of the highest-level of inventory that is for INR310 crores. Any particular reason because of businesses expanding or the prices might go up per sir?.
Jagdish Agarwal
No, I think it’s a mix of many things. You are right that inventory levels have gone up drastically end of June. And partly to answers your questions also that inventory levels are going up that some inventories are old that require provisions that you see in that. You know, certain raw-material has a higher lead-time and sometimes it makes sense that you hold some inventory. So any business company future, you can address that maybe talk about certain raw-material, especially when we talked of foil, which we have to import from different countries and then duty on import from China and all. When you import paper from Europe, their lead times have increased. So it depends at time-to-time that what kind of earning, what kind of order book you have and sometime it go up, sometimes come down, but — but definitely, yes, end of June it looks high and we are working to put a right focus on that. So by end of this year, we can have a decent inventory.
Ashok B Jain
Okay, sir. It was very helpful, sir. Thank you so much and best of luck. Thank you.
Dhananjay Salunkhe
Thank you.
Operator
Thank you. The next question comes from the line of from Investment. Please go-ahead.
Lakshmi Narayanan
Two questions. One is that how seasonal our revenues and margins are? Is there like a second-half is better than the first-half or the reason I’m asking is the last two quarters have been fairly strong in terms of gross margins and EBITDA. Is there any seasonality attached to
Dhananjay Salunkhe
I would say generally there are some upsides and correct it’s more or less something goes up, something goes like, for example, in the first-half, let’s say, in-quarter two typically summers, so beverages would be kind of slightly up and so is the hair-care. In second-half, hair-care probably goes down, ice creams goes down, but then we could see some upside on food sides or seed segment and so on because it starts kind of monsoon-related activities. 3rd-quarter — 4th-quarter, we could see some festival related demand upside. Our first-quarter typically some — so we have a good mix of the business are coming from various product categories and related industries. So I would say we are having equal opportunities in all the quarters.
Lakshmi Narayanan
So is that like, I mean has got stabilized in terms of margins for us?
Dhananjay Salunkhe
Can you repeat?
Lakshmi Narayanan
Can you got stabilized for us from a margin point because if you look at the last 30 quarters, there has been lot of fluctuations in margins and gross margin, EBITDA level and so on. Can we assume that things have got little — this is stabilized looking at the performance for the last two quarters
Jagdish Agarwal
In a way, yes, but again, no subjectivity is there, it depends on the commodity prices. So if the moment we are going to in high inflation situation, that probably has some lag impact on the profitability.
Dhananjay Salunkhe
So maybe let me add probably to the answer. Look, we are in a new world, which is called Bani, right, binary, anxious, non-linear and incomprehensible. So you know what today makes sense, not sure it will make sense a few weeks or 1/4 later. So I think what current focus is basically what are we doing good, double down on that and continue doing.
Lakshmi Narayanan
So I think the second question is that in terms of our exports, while domestic in the last five years have actually come down, your exports have actually been fairly secure. Now, what do you think about exports? Is it — is it a — is it something that is decided outside — outside your purview? There is a global, therefore the exports can actually go up far down or is it in your control?
Jagdish Agarwal
Well, it’s very much in our control. It’s not that someone else is deciding. It is very much — we do manage the relationship, we do work. Yes, definitely, being a part of global company, we did lot of support from them on relationship front, on other aspect, but yes, it is very much within our control.
Lakshmi Narayanan
So in last year, if I look at it, the software and expense reimbursement charges jumped from around INR17.5 crores to around INR35 crore INR36 crores. Now is it a one-off or do you think this will — this will actually remain at like INR36.5 crores, INR37 crore level?
Jagdish Agarwal
I think when we talk about first-half of this year, it will remain in that. It is not kind of a one-time.
Lakshmi Narayanan
So it will — it will remain fairly stable.
Jagdish Agarwal
Yes.
Lakshmi Narayanan
As I think we are leaders and we are pioneers in packaging, right? And you talked about this volatility, etc. Now, sir, what is our plan of action? Do we have leaders we should have some way to iron out these volatilities, either by hedging or tuning our products or having focus or multiple things, right? So when do you think as an organization, you will actually be there to ensure that you are not the price-taker, sir.
Operator
Yeah, maybe you move towards the next question as there. I just —
Lakshmi Narayanan
I just wanted to finish this question. So just want to understand your point-of-view on that, how do you intend to,
Dhananjay Salunkhe
Maybe we can have a quick answer for that. Volatility is going to be there. And I don’t think that we can address all, but yes, to the extent possible in the area, specifically when we talk about FX and all, we do take care through AD and all. But when you talk about a commodity, it’s very difficult. So as a policy, we don’t get into that arena. We have to deal with that as and when it comes. And I think so-far our expense is not so tough on that. And going-forward also, we are going to just focus on more to maybe talk about AGM now with, but on a core commodity, the plan is better, but we are not really thinking on addressing all volatility in by of.
Lakshmi Narayanan
Thank you. Okay.
Operator
Thank you. The next question comes from the line of Raja Kumar from RK Investments. Please go-ahead.
Raja Kumar
Yeah. Sir, thanks for the follow-up. Sir, my question was on the BOPP fold price increases. So is it a tailwind or a headwind for
Dhananjay Salunkhe
Price increase is at a headwind, right headwind, because you know,
Raja Kumar
Yeah, because we don’t okay, so I believe there is a big shortage in the market and so are we importing it now or are we sourcing it locally?
Dhananjay Salunkhe
Locally local.
Raja Kumar
Okay. And sir, the second question is on the pet food segment, if you can give any color where do you see any upside where the contribution — what is the contribution —.
Dhananjay Salunkhe
So is really one of the very good upcoming you know growth opportunities for the companies which are actually in that field and we are seeing that this industry, actually pet care or pet food industry is growing very well. And as a globally, we are one of the leaders in this area, our pet food products with — because they have a very-high and demanding barrier structural properties. And so here also we are using that expertise to engage with our customers and we are seeing traction while the volumes and the industry is still evolving, but there is definitely a good opportunity. Clearly.
Raja Kumar
Okay. And what is the contribution we have from this segment? Is it a significant number?
Dhananjay Salunkhe
So whereas right now for India, it’s small, but okay.
Raja Kumar
Okay. And lastly, one housekeeping question, sir. On the cash-flow, I think somebody asked this question. So I see that number is in the negative, so it’s more an inventory gain we booked in the first-half. Is that a correct statement?
Jagdish Agarwal
Yeah.
Raja Kumar
Inventory gain of almost INR10 crores that we booked in first-half. Okay.
Jagdish Agarwal
But again, and also, there are different impacts they are right of also at the same time. So last year only. But go-ahead with your question.
Raja Kumar
Yeah. So let me say INR10 crore inventory gain, yeah.
Jagdish Agarwal
Provision point of view but there are write-offs also, so I mean, we’re not getting into the decision or the overall impact of inventory that they have provision gains and then they are write-offs. So the overall impact will be different.
Raja Kumar
Yeah, because I see a number of 93.9 million. That’s what is the.
Jagdish Agarwal
Yeah.
Raja Kumar
There is also a INR2 crore derivative gain booked. So if you can also comment on that. Is it something to do with the ECB or?
Jagdish Agarwal
No, it is more towards the hedging what we do on our FX exposure. It’s related to that. ECB into INR exposed into dollar or —
Raja Kumar
Okay, got it, sir. Thank you so much. Okay. Thank you. Thank you. We are in the close to your day.
Operator
Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir.
Dhananjay Salunkhe
Thank you. Okay. Thank you. Yeah. So I think very interesting and engaging conversations and while we do take questions and in fact, I would say keep asking this question because while we are answering some of them, there are definitely some discoveries and thank you, Jagdesh. You are taking very notes good so we can actually exchange later on. So I appreciate everyone asking these questions and keeping us engaged. And we continue to engage with all of you and thank you for your carto.
Jagdish Agarwal
Thank you.
Operator
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.