Kanpur Plastipack Ltd (NSE: KANPRPLA) Q1 2026 Earnings Call dated Aug. 19, 2025
Corporate Participants:
Mamta Samat — Investor Relations
Manoj Agarwal — Chairman Cum Managing Director
Shashank Agarwal — Deputy Managing Director
Analysts:
Unidentified Participant
Saket Kapoor — Analyst
Praveen Sharma — Analyst
Aniket Shah — Analyst
Weber B — Analyst
Ashish Bhandari Dubai — Analyst
Sagar Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Kanpur Plastic Pack Limited Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Mamata samad from ad factor pr. Thank you. And over to you, Ms. Samath.
Mamta Samat — Investor Relations
Thank you, Ranju. Good afternoon everyone and welcome to the Q1FY26 earnings call of Kanpur Plastic Pack Limited. Today we have with us Mr. Manoj Agarwal, Chairman Managing Director and Mr. Shashank Agarwal, Deputy Managing Director. We will begin the call with the opening remarks from the management after which we will have the forum open for the interactive Q and A session. I must remind you that this conference call may include forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. The statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. I now hand over the conference to Mr. Manoj Agarwal Chairman Managing Director of Kanpur Plastipak Limited for opening remarks. Thank you. And over to you, sir.
Manoj Agarwal — Chairman Cum Managing Director
Thank you, Mamkaji. Good afternoon everyone. I’m delighted to welcome you all to Kanpur Paspak’s maiden earnings call for the first quarter of financial year 26. Thank you for joining us today. As this is our first call, I would like to share a brief on our company. With over five decades of experience in industrial packaging, Kanpur Plasti Pak is among India’s leading manufacturers and exporters of flexible intermediate bulk containers, FIBCs for short PP, multifilament yarn woven sacks and a variety of value added fabrics.
Our enhanced production capabilities from Yarn to finished FIBCs allows us to maintain stringent quality. Control ensures cost efficiency and scale up operations quickly. Over the years we have transformed from a regional wovenstrack manufacturer into a fully integrated, globally competitive packaging solutions provider. Established in 1971, our company has consistently focused on capacity expansion, technology upgrades and process automation to strengthen its market position. Our manufacturing facilities house state of the art equipment like extrusion tape lines, circular weaving machines, lamination ultrasonic cutting machines and sealing lines with in house testing laboratories and recycling plants. We are a certified Food grade facility with an A rating from British Retail Consortium, the gold standard for such certifications. Backward Integration by including the production of PP Multi Filament Yarn, UV Master Batches Crimp yarn has ensured consistent quality offering us the flexibility to meet diverse customer requirements across global markets. Our journey reflects a commitment to innovation, quality and sustainability. We have expanded its footprint internationally, exporting to over 40 countries and delivering customized packaging solutions that meet the demands of a dynamic global market. Today it stands as a trusted partner for industries worldwide, combining decades of experience with a forward looking approach to growth and excellence. Our loyal customer base is well diversified across sectors such as food, agriculture, chemicals, mining and construction, with no single client contributing more than 5% of the total revenue. Exports account for nearly 70% of our business, enabling us to maintain stability and resilience across market cycles while continuing to pursue sustainable growth. Coming to our Q1 financial year 26 performance, our total income from operations grew 34% year on year to 182.24 crores. EBITDA rose 119% to 15.5 crores and net profit stood at 6.91 crores versus a loss in the same quarter last year. The growth was driven by healthy demand in our core FIBC business and woven packaging segments, higher value added product sales and operational efficiency gains. The appreciation of the US Dollar also provided a tailwind to our export margins. From a strategic perspective, this quarter marked a significant milestone with the acquisition of a 76.19% stake in a UK based Valex Ventures Limited for a value of Rupees 8.02 crores. The acquisition gives us direct access to premium food grade. And UN Certified FIBC customers in the UK enhances our developed market presence and opens a gateway to the EU market. Under the recently signed UK India Free Trade Agreement. We have successfully raised 20.50 crores through the preferential issue of 1760,000 warrants which has been utilized to repay the debts and second preferential issue of 13.15 crores for 1012,000 warrants is underway. This will help us to reduce debt and further strengthen our balance sheet. Our credit rating was upgraded to Crysil BBB stable for long term facilities and to Crysil A2 for short term facilities highlighting our strong financial risk profile. Our way forward focuses on driving growth in high margin scalable segments like FIBCs and value added fabrics. We are undertaking a debottle exercise with small investments in stitching, storage and warehousing, laying emphasis on enhancing operational efficiency, automation and improved risk management. The vacated facility at our CPP division will also be utilized for this purpose. The emphasis will continue to be on margin expansion by higher realizations, cost control and improved product mix, building a stronger balance sheet for diversification and reducing interest costs to better financial efficiency. At this point I would like to hand over to our deputy managing director Mr. Shashank Agarwal to walk you through the detailed financial and operational highlights for the quarter. Thank you very much.
Shashank Agarwal — Deputy Managing Director
So thank you. Good afternoon everyone. In terms of performance, Q1FY26 was a strong quarter across all key metrics. Total income from continuing operations stood at 182.24 crores, 146.72 crores coming from manufacturing and the rest from trading up by 34%, 11% in manufacturing and 23% in trading from 136.28 crores last year.
EBITDA increased to 15.54 crores with margins improving to 8.51% from 5.20%. Net profit came in at 6.9 crores compared to a loss of 1.16 crores in the same period last year. EPS for the quarter was 3.01 rupees. Breaking down further, FIBC’s continued to lead our product mix supported by repeat orders from long standing customers across Europe, America and Asia. Multi filament yarn sales were supported by growing demand from both internal use and external textile customers. Fabrics. Sales, including circular solder and ventilated types, gained traction in agricultural and industrial packaging applications. In Q1 FY26, the product revenue mix stood at 182 crores, out of which the manufacturing was about 146.72 crores, where FIBC contributed the largest share at 51%, about 74.82 crores. Fabric accounted for 31.36% which was 46.01 crores, while other products formed 6.22% and multifilament, which is MFI, brought about 9.65%. The small box contributed 1.77%. This mix underscores the company’s strong reliance on FIBC, supported by significant contributions from fabrics and other product lines. From a geographical perspective, in Q1 FY26 for manufacturing sales, exports accounted for nearly 74% of all the revenue and the domestic was about 26%. Within the 74% revenue, Europe remained our largest market and our stronghold at 48.75, followed by South America at 30.44% and North America only contributing to 18.31%. We could see emerging traction in Japan and Brazil. The Continent Wise mix continues to give us balanced exposure to both developed and emerging markets. Operationally we are focused on efficiency and scalability. This year we have engaged Grant Thornton under Risk and Advisory to help us enhance process efficiency, plug revenue leakages and identify automation opportunities. We are also currently working on debottlenecking in stitching, storage, warehousing to increase throughput and reduce turnaround times. Sustainability remains a key pillar of our business. 47% of energy needs are currently met through solar power and our proposed target is to reach 60%. Our facility maintains zero liquid discharge and are fully EPR compliant and all our products are designed to be fully recyclable. The combination of operational discipline, market expansion and sustainability focus positions well for continued growth. The operational excellence initiatives are currently underway and we are contributing to cost reduction efforts with a strong order book, healthy demand outlook, disciplined execution and loyal relationships with our clients. We are confident that Kanpur Plastipak is on track to deliver consistent, profitable and sustainable growth in the quarters ahead. We now welcome and look forward to your questions. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. The first question comes from the line of Deepika pandare and individual Mr. Please go ahead.
Unidentified Participant
Thank you for taking my question and congratulations on the good set of numbers, sir. So my question was regarding margin. Is this 8.53% EBITDA margin sustainable in the coming quarter?
Shashank Agarwal
Yes. So thank you. Deepika JI So the margin is sustainable considering the depreciated rupee, stable raw material, ocean freight and increased manufacturing because the manufacturing in the developed world has gone up after the Ukraine Russian crisis because the gas prices have stabilized. There is also an identified shortage of good workforce globally which is making our customers come back to us again and again. So with the combination of consistent demand, depreciated rupee, stable raw material and ocean freight, we do not see any challenges there.
Unidentified Participant
Okay, okay.
Shashank Agarwal
So the sustainable margin will remain between 90. The sustainable margin will remain between 9 to 10%.
Unidentified Participant
Okay, so it will be in 9 to 10% range.
Shashank Agarwal
Yeah.
Unidentified Participant
Yeah. And my second question was on the acquisition side, the acquisition of Valex, what all synergies you see in the coming year and how it will contribute to our margins and revenue?
Shashank Agarwal
Yeah, so there were a couple of things about Valex. So Valex was actually owned by the promoters themselves. So it was also from a corporate governance standpoint that it had to get merged back into Kanpur Plastic Pack at some point. And because the origin of Valex was under crisis when it got started, it was only doing about half a million pounds worth of revenue before, but this year we did 1.1 million and now it will continuously increase by about 5 to 10% every year.
So we have based out reaching to end users, giving them design guidance and our experience in that, that is helping the business grow.
Unidentified Participant
Understood. And what are the margins we are making on that company?
Shashank Agarwal
So on a GM level it is about 25%. And the UK India FTA will help this acquisition and it will help the profitability there. And the top line, I mean ultimately for Kanpur Plastifak the net increase in the top line would be about 4 to 5 crores on a consolidated way and the contributions will come immediately as it’s a going concern and it’s an acquisition, the offgoing concern.
Unidentified Participant
Okay, understood sir. Thank you.
Operator
Thank you. Next question comes from the line of Saket Kapoor with Kapoor and company. Please go ahead.
Saket Kapoor
Namaskar ag, thank you for this opportunity. Sir. Firstly pertaining to this UK acquisition only, this was a promoter entity only. Sir, if I heard you correctly can you explain then the nature of the transaction and we have only acquired, I think so, closer to 76%. So what happens to the remaining stake? And if you could just explain.
Shashank Agarwal
Namaskar Kapoor sahib, good to see you again. Good to hear you again. Rather. And so the company was held by 70. The Valex Ventures was held by the promoters itself and they only held 76% because there was a local partner who held 24% and he continues to hold that he is the driver of the business. He is over. He has over five decades of experience in textiles and packaging. So that was the nature of the transaction. So it was a share buyout.
Saket Kapoor
Okay, so what was the. What were the last year salesman? How have we valued the company for our 24% stake? It is at 8 crore, around 10. 11 crore is the total value of.
Shashank Agarwal
That’s correct. 10.5 crores is the valuation of the company and the last year sales was 1.1 million. This year we are expecting it to be between 1.2 to 1.3 million. It follows the same financial year. So this year’s expectation is around 1.2 to 1.3.
Saket Kapoor
So you mentioned about 4 to 5 crore. So if we speak in Indian rupee. So 4 crore, 5 crore is what will be the top line for this year and the profitability.
Shashank Agarwal
Yeah. So on a consolidated way because Kanpur Plastic Pack sells to Valex Ventures so only the gm, additional GM that is there will get added to the top line and only. So that’s why I said that the net addition that will happen is only 4 to 5 crores.
Operator
Thank you Mr. Kapoor. Please rejoin the queue for more questions. Next question comes from the line of web of B with honesty and intelligence. Digriti Investment, please go ahead.
Unidentified Participant
Yeah. Hi sir. Thanks for providing the opportunity. Super. You know, good that we’ve started the con calls. So that’s a good initiative. I have lot of questions, but I will just ask three of them and then leave the. Leave the queue for the rest. Rest participants. So first, you know, if we see, you know, lot of FIBC units are located near ports while our unit is relatively at a larger distance from the port. But despite of that, you know, we have good export business all across the globe. So what is the offsetting factor in our case which is offsetting, you know, higher domestic freight, freight cost for us?
Shashank Agarwal
So I’ll answer this and then you can ask this next question. Is that okay?
Unidentified Participant
Yeah, yeah.
Shashank Agarwal
Yeah. So you are absolutely right in this. But this also comes to an interesting corollary where Kanpur Pacific is also the only unit that has survived five decades despite being away from the port. So there are three primary reasons why the cost gets offset. One is that the availability of raw material, which is polymer, now has become North India, that is in Panipat Batinda and now Barmer, which used to be originally near Hazira and Jamnagar.
Unidentified Participant
Okay.
Shashank Agarwal
Second is that there is a reverse logistics cycle that’s there between Kanpur and Mundra where the cost of goods from Kanpur to Mundra is not substantially higher compared to, let’s say Ahmedabad to Mundra because the reverse logistics cost is much higher. There is far more import than exports in Tutra Pradesh.
Unidentified Participant
Got it.
Shashank Agarwal
And third, which is the most important one is the labor arbitrage. Most of the people, most of the factories that are operating in the south or in the west, as you pointed out, people come from Uttar Pradesh or Bihar. And Uttar Pradesh still remains to be the largest state in the country with the population of 25 crores and also the highest younger workforce that’s available to work in factories. So we are able to get people to train much quicker and faster and retain them.
Unidentified Participant
Got it? Yes, I think that’s, that’s a very good answer. So secondly, on, on food grade fibc, you know, so if you can help us understand what is the total capacity of food grade FIBC that we have and the sales that we did last year, I’m not talking about the quarter, but maybe, you know, last two year figure, you know, FY24 and FY.
Unidentified Participant
525. What is, what is the capacity and sales of FIBC and what is the margin difference between food grade FIBC and, and you know, other FIBC products?
And secondly, on, again on FIBC or food grade FIBC itself is, is our capacity between food grade FIBC and non food grade FIBC fungible or, or it’s like, you know, we have dedicated capacity for both of them separately.
Shashank Agarwal
Your question suggests that you understand the industry very well. So I will try to give a very brief and a very quick answer on this. The entire capacity that is there is food grade, so it is interchangeable. 100% of it is interchangeable. So but that does not define the real capacity. The real capacity is actually defined by the skilled workforce that is available to work on this, which is about 75% of the total capacity. Having said that, we as a company do not want to cross the 60% threshold level because it has its own challenges in terms of the sustainability and the risk factors that are involved with it.
So last year out of the total FIBC sale we were around 40% that was in food grade and chemicals, which is also as complex as food grade. So I consider them as both in terms of profit margins, we consider them in the similar range. So 40% was food grade and chemicals. This year it will be around 50%. In the next couple of years it will continue to go from 50 to 55, 55 to 60. The difference of the margin that is there between standard product and food grade product is substantially high. So one could be around 12%, the other could be around 7% EBITDA. But our remaining 40% that is there, right? So if 60%, so let’s say 55% is food grade. The remaining 45% that’s there only 15% of it would be at 7% which is the building and building and pure mineral sector.
The remaining comes under agro and complex textiles. So this is where the EBITDA could be between 9 to 10%. That will remain at 30%. That is still. Already.
Unidentified Participant
Got it, got it. And then lastly, this would be the last question and then I will come back in the queue. So we already have FIBC and some other, you know, multiplamentian business. And also. But do we plan to enter into any other new PP based products? Like there are companies who are doing geotextile, there are companies doing polyliners. So are we planning to enter into those.
Unidentified Participant
Products or as of now there’s no such plan.
Manoj Agarwal
So specifically about pond liners we are, we have no plans. We believe that it’s a business of building a future liability because there are guarantees and warranties that are required in that product. So we will not enter that market segment. On geotextiles we are already present and we did about 2000 tonnes. So that’s about 40 crores last year in geotextiles. This year it would be closer to 60 and the next year that it’s planned it would be between 60 to 80 crores. So that is a area that we are continuously expanding in. S
Unidentified Participant
O this other, that you classify as other product, these are mostly geo textile, is it?
Manoj Agarwal
Yes.
Unidentified Participant
Okay.
Manoj Agarwal
Some of it comes in the fabric and some of it comes under others.
Unidentified Participant
Okay.
Manoj Agarwal
I think we will make a better classification next thing.
Unidentified Participant
So yeah, I will come back in the queue. I have many more questions but I will come back in the queue now. Thank you very much.
Operator
Thank you. Next question comes on the line of Praveen Sharma and individual investor. Please go ahead.
Praveen Sharma
Hello, I’m audible.
Manoj Agarwal
Yes, absolutely.
Praveen Sharma
Yeah, good afternoon Manoji and Shashanki and congratulations for you know, fantastic turnaround in the company and congratulations on starting this con call. You know it takes us into, you know, next orbit of corporate governance and transparency and I hope, you know everybody will like it. So my first question is, you know we had this, you know I have been a very long term investor in the company, you know, almost 10, 15 years and we, I have witnessed many cycles now this kind of turnaround. What I have seen this year, it’s quite amazing. And when I see results of other companies in the similar sector they have also done decently well, if not as good as us.
So I just wanted to know what is the reason for the sudden buoyancy in FIBC sector in India in general? Is there any tectonic shift or demand shifting from other countries to us? This is my first question and I’ll ask the next question.
Manoj Agarwal
So Praveenji, thank you for coming on the call and thank you for your long term trust in the company. So I’ll just break down into two parts. So first is the tectonic shift that you’re talking about. So yes, as China and Far east continue to enhance their manufacturing capabilities into electronics and pharma and other products, their focus on labor intensive manufacturing goes down. And then the only other alternative that’s there today is in India. India also is currently. Very well positioned in the geopolitical system and in the diplomatic relations across the world at the moment with the right policies for manufacturing in India. That has also helped us. There is no discounting of the fact that almost 0.9% of the EBITDA is because of the rupee depreciation that happened. We have also seen a significant stability in the raw material and and the ocean freights over the last 12 months. And I would again reiterate my point that I said in my opening statement that there is a thrust on global manufacturing and global agriculture that is absolutely improving packaging needs and that is requiring packaging needs. As we become more sustainable. People are looking at wastages and efficiencies in a very, very different way. Nobody wants to waste agro produce. People would first have their wheat in open tractors and open trucks. Now they want packaging even in Africa. So emerging markets are also significantly increasing the demand for these kind of products. I hope I was able to answer the question.
Operator
Mr. Weber, please go ahead. Since there is no reply from the line of Mr. Vaibhav, we’ll move to the next. The next comes from the line of Mr. Aniket and individual Minister. Please go ahead.
Aniket Shah
Hello. Hello.
Manoj Agarwal
Yes, I can hear you.
Aniket Shah
Yeah. So sir, I have few questions based on this Valex acquisition. So it will remain independent? or I was going to work in future.
Manoj Agarwal
So is an independent company. It will remain an independent company with independent management, but it will be backed up by Kanpur Plastic Pack in terms of technology, in terms of design resources, in terms of customer advice, technical support and also the supply chain.
Aniket Shah
Okay, got it, got it. And sir, as we have seen the sharp turnaround in our EBITDA pattern. So it just because of this acquisition?
Manoj Agarwal
The acquisition has not happened yet. The acquisition results will start coming in from the next quarter. This is because of the tailwind that’s there because of the increased demand, better operation efficiency, better capacity utilization, better margins. That are there.
Aniket Shah
Okay, answer related to this. So in terms of the raw material prices. So as we see, are you seeing any impact of the crude oil fluctuation prices on the polypropylene in the near term?
Shashank Agarwal
So more or less polymer and crude oil have become delinked now because the supply chain of polymer and the supply chain of crude remains independent of each other. The supply demand gap as well. So we have seen very high level of stability and rather the polymer has actually reduced in the last couple of months.
Aniket Shah
So sir, based on that can.
Shashank Agarwal
Sorry, sorry. In terms of dollar terms. I’m talking about dollar terms.
Aniket Shah
Yeah. Okay. Okay. So sir, can you give some guidance for FY send 7. How do you see the trend in future and how are we going to get the benefit from it?
Shashank Agarwal
So as I said that EBITDA numbers in terms of percentages are more or less supposed to remain the same going forward. This quarter also looks good. The demand is there, the order book is good. The next couple of quarters, the next three quarters, the demand will be there. So we look at similar EBITDA numbers.
Operator
Thank you. Mr. Aniket, please rejoin the queue for more questions. Next question comes on the line of Weber B with honesty and integrity investment. Please go ahead.
Weber B
Yeah. Hi sir. Thanks for providing the follow up opportunity. So you know, in terms of. In terms of a PPE fabric business. So in fibc, you know there is high labor component which makes India very competitive. But in fabric I think the labor component is much, much less compared to fibc. So what makes makes you and you competitive in fabric market which enabled export export of this product.
Shashank Agarwal
So I think you’ve hit the nail in terms of understanding the business. So fibcs is the more complex product. The more FIBC we do, the more profitable we will be. So from now on this quarter onwards you will see that there is a shift that the percentage of FIBC sale will continue to increase as a total percentage of the manufactured product. Fabric will continue to shrink. This will take a couple of years. And that is the reason we are investing in manufacturing capacity of FIBCs.
This is the first part. And now answering your question, why people buy from us for fabrics where it’s only a commodity and it’s cost competitive. So we have built a very strong brand reputation in countries in East Europe and in South America which is. From Japan to India will happen whenever the there is a structural change in Chinese manufacturing capability and capacity. So today China is only five days from Japan, but India is about 50 days from Japan. This is something that we will not be able to overcome very quickly. Whenever this structural change will happen, either the shipping reduces or the Japanese or the Chinese factories do not have enough people to work on FIBCs, then this will happen. And that is the time we want to be absolutely penetrated in the market and capable in the market to capture the 10% that you’re talking about. But to say that this will happen in the next two, three years, I think it is a very, very, very uphill task. I think we are talking about 1% market share, half a percent market share, 1 1/2% market share in the next one or two years. At the moment we don’t look at very, very big numbers because we want to go very, very slow and steady and be like partners together.
Praveen Sharma
Okay, best wishes on UK market With the FTA in offering, you know, how do you see business standing out there? You know, do we see a, you know, what is the potential there and do we see a significant market capturing happening there by us? And my last question is about Trump tariff in North America, you know, impact. So about UK first.
Shashank Agarwal
So I think the FTA is a brilliant move. It will not only enhance the margins but that are there, but it will also increase the demand itself because UK itself will become competitive in many other things. So it will have increased manufacturing. Once it has increased manufacturing, it will have increased demand. So with increased demand there will be more volume and definitely there will be a little bit of margin improvement that is there because India was facing stiff competition in UK from Bangladesh and Vietnam about the additional tariffs that have been applied by the US government on India.
So 10% became 25% and then there was an additional 25% because of the Russian oil. So it is very hard to predict what will happen. But as far as the company goes, our 18% turnover is in North America, out of which about 14% is in US and 4% is in Canada. So it is not a very significant volume that is getting affected. There are no orders on hold, there are no order cancellations. I think there is a wait and watch scenario that’s going on. There is extreme volume. Fertility in decision making which is beyond our control or beyond the control of the importer. It is not a product that can be shifted overnight. So we continue to receive orders. Even last week we received orders from us despite this 50% addition. So I think people are hoping and there is a higher probability that this 25% are Russian oil. Additional tariff will go away.
Operator
Thank you Mr. Sharma. Please rejoin the queue for more questions. Next question comes from the line of Ashish Manjari, an individual investor. Please go ahead.
Ashish Bhandari Dubai
So thanks for the opportunity. So my question is while Krishal has maintained a stable outlook, are there any potential risk like such as raw materials? Hello.
Shashank Agarwal
Yeah, yeah, I’m just requesting the managing chairman and managing director to respond to that please.
Manoj Agarwal
Can you come back again on that rating? I didn’t get a question. Please.
Ashish Bhandari Dubai
Yeah, yeah, I’ll come back again. So while Presale has maintained a stable outlook, are there any potential risk? Risk such as the raw material prices, forex exposure or demand fluctuations that could impact the rating going forward and how does the management plan to mitigate that risk?
Manoj Agarwal
Yeah, so the stable is a category. It’s a category. BBB plus is the main rating category that Kaisal is given. We were earlier a BBB minus so it’s an upgrade. That’s one part of the answer. Risks. Of course, in every business enterprise we have risks. Is there. There’ll be raw material fluctuations, there’ll be forex fluctuations. But we have a well defined policy to handle. For example, I’ll take your three risk perspectives. One is raw metal. Raw metal, the DMD just mentioned has been very stable over the last year. Is handled closely at the top management level. We have a buying policy.
We have a buying policy and there’s a process in place which ensures that we are hedged for the raw material. Also when the orders come in. Forex, we have a well defined forex management policy. I happen to handle that personally directly with my CFO on that. But in the global uncertainty situation that we lie in today, I have to frankly admit that forex will always remain a risk. It is how best you can handle it. I wouldn’t say that it is not a risk. Yeah,
Ashish Bhandari Dubai
Actually I have one. Another question.
Manoj Agarwal
Yeah.
Ashish Bhandari Dubai
With the fundraise, with the recent fundraise and the planned debt reduction, could you share. The current net debt position and the timeline by which the company expects to become net debt free.
Shashank Agarwal
Yeah. So last year fy ending we were having about a term loan of 80 crores and a working capital loan of 120 crores. So we had 190 crore rupees of outstanding debt. By end of this year we should be in a position of having about 15 crores of long term debt. About 110 crores of working capital limit. So that is about 125 crores. So from 190 we will be down to 125.
Operator
Thank you Mr. Vanjari. Please rejoin the queue for more questions. Next question comes on the line of Saket Kapoor with Kapoor and company. Please go ahead.
Saket Kapoor
Yes, just to come to the last point about the debt part. We mentioned somewhere about being debt net debt free with the capital regime exercise. And so can you explain sir, where is the gap in. In my understanding.
Shashank Agarwal
Sorry, could you repeat your question please?
Saket Kapoor
We were of the opinion that with the fundraising exercise and with the TPP unit divestment we would be net debt free. That was our understanding.
Shashank Agarwal
Yes, correct. So this 14 crore rupees is an outstanding term loan which will be repaid over the next couple of years. And on a gross block of 200 crores. 14 crore rupees is really not any long term debt. And 7 crores out of that is CCL GCL which was given during the COVID period which will get repaid anyways in the next year.
Saket Kapoor
Okay. But with this acquisition, the UK one wherein the fund. Actually the fund is the hand changing is only between the company and the promoter entity. So will this be further infused back in the form of this preferential allotment only this money is going to come back to the company. This is how the route will.
Shashank Agarwal
No, it’s a share exchange rate. So it is it. There is no fund flow in this. It’s a swap of shares.
Saket Kapoor
Okay, Swap of shares. Can you. Can you explain a bit? Money we are acquiring 76%. So shares will be issued in the. In favor of Kanpur. From the. From one promoter to the. To Kanpur Plastic. That is how the transaction will be consummated.
Shashank Agarwal
Correct. The promoter will get shares of Control Plastic pack and he will renounce shares of Valex Ventures in lieu of that because. And that will make Compostepac the owner of Alex Ventures.
Saket Kapoor
Okay sir, only small point about the margin improvement I think. So you were mentioning about some debottlenecking exercise and then FIBC having the highest. Revenue share going ahead. So for short for this year, what are we looking? I think the 30, 33% is what we did in FIBC for the first quarter. My first question, how is this going to increase by the end of this quarter? And then in terms of this quarter revenue we saw a higher percentage in the purchase of stock and trade also. So how should we look forward for the remaining three quarters in terms of the revenue trajectory and how the margins will be shaping up? I think so. You commented earlier on this aspect also.
Shashank Agarwal
Yeah, but let me just re clarify it again. So 182 crore was the total revenue out of which 35 crore rupees was stock in trade. This came out of an opportunity during the period. And this week this keeps on coming. With more liquidity that’s available with us, we are able to do this. There is a small margin that we make on this stock in trade. It’s a trading of the raw material that we consume which is polymer. Out of the 146crore rupees of manufacturing 51% came from FIBCs. That is about 75 crores. This as a percentage will continue to rise over the next quarters.Fabric was about 46 crore and other products and multi filament and small bags put together was about 26, 27 crores which is about 16 and a half. 17%.
Operator
Thank you.
Shashank Agarwal
Yeah,
Operator
Go ahead. Go ahead. No, that’s all. Thank you. Mr. Kapoor, please rejoin the queue for more questions. Next question comes to the line of Sagar Shah, an indujil minister. Please go ahead.
Sagar Shah
Hello. Am I audible? Hello.
Shashank Agarwal
Yes you are audible.
Sagar Shah
Yeah. Thank you. Thank you for the opportunity. Sir, just wanted to understand is it possible for you to give a product wise bifurcation that is in terms of the margin. So FYBC how we are doing in terms of margin in MFI and all those products?
Shashank Agarwal
Yeah. So FIBC remains to be the highest margin product. Fabric and multi filament is at a similar margin which is about half of fibc. And smallback has no significant margin. And that’s why you see that its revenue share is also only one and a half percent.
Sagar Shah
Okay sir, when we say we are into FY that lament yarn. So any, any plan that company has to venture into technical yarn going ahead more grade of technical. Yeah.
Shashank Agarwal
No, there are no current plans to venture out into technical giants at the moment.
Sagar Shah
Okay. Okay. Okay sir. And sir, last question on this guidance perspective. So what is your guidance for financial year 26 as far as top line and. And you know, bottom line is concerned.
Shashank Agarwal
So the order book is good, demand is robust. Operations excellence continues to keep our cost under control. EBITDA will be in line with the first quarter. The benefits will start coming from the next year of the increased capacity addition in FIBC in the. So we are currently working on a very detailed strategy for the next five years for other and newer products that we might add to our existing portfolio. The FIBC last year we did about 285 crores. This will remain our main focus and by 2028 we would like to do between 425 and 450 crores.
Sagar Shah
Okay, thank you. And last one on this manufacturing facility. So what is the current capacity utilization of all the manufacturing plant?
Shashank Agarwal
So when we see it as a whole. Yeah, so as a whole, when we see the capacity utilization for the last financial year was about 75%. The last quarter was also between 75 and 77% depending on how we calculated. Because this was also the period of harvesting season, monsoon and the peak of lu. That’s that happens in North India, the Andi chaltiya, it’s called loo. But if we specifically talk about FIBC as a capacity utilization, we are currently installing more capacity and the capacity from fabric will continue to interchange into FIBC as we go along.
Sagar Shah
Okay, so current capacity of FIBC will increase to how much?
Shashank Agarwal
So we are currently running around 1350 tons per month. This will go up to 1800 tons per month.
Sagar Shah
And what is the expected timeline for this?
Shashank Agarwal
This will take about one to two years.
Sagar Shah
Okay. Okay. And the capacity expansion will be done by how? Internal accruals or.
Shashank Agarwal
Yes, it will be done by internal accruals. The land is already. The land is already in place. The machines are under installation and a building is also being made.
Sagar Shah
Okay, thank you. Thank you. That’s it from my end.
Operator
Thank you. Next question comes from the line of web of B with honesty and integrity investment. Please go ahead.
Aniket Shah
Yeah, hi. Thanks for providing the opportunity again. So two questions. One, one is on the US business, as you said. You briefly explained the tariff impact. But are we seeing pricing pressure from the US customers? Are they trying to shift some of the tariff burden to us? And maybe margins in that business might suffer because of this tariff issue. Is it happening or they are just completely taking all the tariff burden?
Weber B
On themselves.
Shashank Agarwal
Honestly, it’s very early to say right now we have not faced any pressure because the order book is already good at the moment. If this stays on, then there will definitely be pricing pressure. But if it goes away, then it will not be there.
Weber B
Got it? Because you know, even 25% is too much. Even if pressure tariff goes away, even if like it 10 was already there.
Shashank Agarwal
So 10 became 25.
Weber B
Yeah, yeah.
Shashank Agarwal
So okay. I mean put the answer into perspective. If the only 25 remains, then we do not see that there will be any demand glut or a shift from India. There could be slight margin pressure initially, but we will not see demand go away.
Weber B
Got it. And secondly, on the role of distributors in this business, you know, obviously because. Because they are more customer facing, they ultimately supply to customers. So who decide the pricing to the end customer. Like distributors, they decide which company’s product has to go to the ultimate customer at which prices. How does this whole dynamics work between a distributor and the ultimate consumer?
Manoj Agarwal
So most of the distributors that we have, we have more than a decade relationship with them. So it is extremely transparent between our margins and their margins. And let me put it in this way, that 70% of the pricing is decided in a transparent manner which is tender based, high volume business, old business, repeat business, 30% of business, which is new business or first time quotation business, ftb, first time business. There we give a fixed margin, then they add their margin and then they quote to the customer.
Weber B
Got it? So see my point was point. I was trying to understand that you know, ultimately from customers perspective who is the most price competitive for a given quality. That what’s matter quality we control. But if price distributors control then how can we increase market share? That that’s what I was trying to.
Shashank Agarwal
80% of the business is repeat business. So there the pricing is already established. It is only the remaining 20% business that needs to be increased every year where the pricing needs to get established. So yes, there
Weber B
You say that we with ultimate customer we decide the price. With ultimate customer and distributor just backward calculate their margin. And so we have the control on price to the ultimate.
Shashank Agarwal
There are two, there are two differencing. One is pricing power and the other is the. Pricing decision. Right. So once the, once a relationship is established between the end customer, distributor and the manufacturer then the pricing power is out of question because then it is on inflation, it is on dollar exchange rate, it is on freight, it is in polymer. So then that gets passed on. Now the decision of pricing is only to the first time buyer or a tender business. There if it’s a tender business, it’s a joint decision between the distributor and the manufacturer and where it’s a first time buyer then we quote. Sometimes we are participating amongst multiple competitions, sometimes we are the only people who are participating because it’s a complex bag and people are looking and it’s a high sensitivity bag in terms of quality and reliability then we would have the pricing pressure, then we would have the pricing power.
Weber B
Got it? Understand? That’s it for my. Thank you.
Operator
Thank you. Next question comes to the line of Saket Kapoor with Kapoor and company. Please go ahead.
Saket Kapoor
In the previous reply, sir, you were answering towards how the FIBC contribution would be increasing and you did answer that how you are planning to increase the capacity. So the business profile for the first quarter there is a very likelihood that we are, we will be improving upon on these, these numbers going ahead. Since there was some impact of some weather disruption for the first quarter, this understanding is correct that going ahead the business profile with the improved order booking is more likely that we get better set of numbers. The entir
Shashank Agarwal
E focus of the company is on increasing the FIBC numbers. So on a medium to long term basis, yes, the numbers will go up. It is very hard for me to give exact short term picture on this.
Saket Kapoor
Okay. Since you have engaged a third party grant which you have mentioned. So what, what are the kind of tasks or the, the milestone that you have that they have, you have set them to get into the systems in terms of the increasing the operating margins or what is the mandate given to them that if you could just explain and by the timeline by which they would be giving you the report and your implementation of the same.
Shashank Agarwal
So the project assigned to GT is to provide strategic recommendations not only to mitigate risks but also to streamline processes, enhance compliances and drive improvements and productivity. So the timeline for this is the next six to 12 months. We will get the reports, execution will start happening and it’s an ongoing exercise. It’s not a one time transactional. That we’ve got into.
Saket Kapoor
Okay, that’s all from my side. So just to, just to look into it because we, we have seen this upcycle at the time of COVID also when I if I’m not wrong, we did post good profit but after that there was a big slump and the industry went into a downward spiral. So what, what, what is your currently gives you the confidence that those sectors are not going to go forward. Those sectors will repeat and this is this track would be more sustainable in terms of the revenue business profile and also in terms of the margin profile going ahead.
Shashank Agarwal
So I mean of course I cannot predict the future but there are three significant differences that we see this time. One, there was definitely a pent up demand at that time where people were building up inventory because of the fear of running out of material. That does not exist today because the shipping crisis does not exist, the lockdown crisis does not exist. Second, the manufacturing globally had reduced due to the Ukraine Russia crisis. The gas prices went up so high that there was a complete halt of manufacturing in Western Europe.
Thirdly, agriculture as a commodity has required an improved packaging which is also driving demand because the focus on sustainability and wastage is extremely high now
Saket Kapoor
All point understood, only point is if and when the Ukraine crisis gets settled, what would be what how would that affect the FIBC industry? Since then there will be a normalization of trade. People who were, who were there in this business will try to be back to the same business with lower energy cost flowing into the pnl. So what would lead. Yes, yeah.
Shashank Agarwal
So as far as the business goes, the uk, the Ukraine Russian crisis was settled last year when the gas prices came down and when Europe started buying Russian gas again then the. So once those prices came down, the manufacturing went up again. So, so I mean we are linked to logistics, warehousing, manufacturing and agricultural produce. If these four segments have ripples, then we will have ripples as well.
Saket Kapoor
Okay, Right. So we can conclude this is a strong wicked on which we are continuing forbidding any undue instance that may happen. Other than that there’s a very good visibility in terms of order booking, hence execution, hence improvement in margin. We can summarize from. Today’s conversation going ahead.
Shashank Agarwal
Absolutely.
Saket Kapoor
We will hope for the continuity of the course, good presentation and we hope for further participation and engagement with you, sir, going ahead. Thank you.
Shashank Agarwal
Thank you.
Operator
Thank you. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I would now like to hand the conference over to Shashank Agarwal for closing comments.
Shashank Agarwal
I think I would like to thank everybody who’s there on the call to invest time in the company. And we will continue to do this after every quarter results and we will be very transparent and continue to share everything that’s available with us. Thank you. Once again,
Operator
Thank you. On behalf of kanpur Plastic Pack Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.