Mold-Tek Packaging Limited (NSE: MOLDTKPAC) Q1 2026 Earnings Call dated Jul. 28, 2025
Corporate Participants:
Unidentified Speaker
Janumahanti Lakshmana Rao — Chairman & Managing Director
Analysts:
Unidentified Participant
Nitin Gupta — Analyst
Jaiveer Shekhawat — Analyst
Abhishek Navalgund — Analyst
Shirish Pardeshi — Analyst
Chirag Maroo — Analyst
Yash Bajaj — Analyst
Guru Darshan — Analyst
Pranjal Mukhija — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Moltech Packaging Limited’s Earnings Conference call hosted by MK Global Financial Services Limited. 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. I now hand the conference over to Nitin Gupta, MK Global Financial Services Limited thank you and over to you Sir.
Nitin Gupta — Analyst
Good evening everyone. I would like to welcome management and thank them for this opportunity we have with us today. J. Lakshman Rao, Chairman and Managing Director. I shall now hand over the call to him for his opening remarks. Over to you Sir.
Janumahanti Lakshmana Rao — Chairman & Managing Director
Good evening everybody. Thank you very much. Nitin, I’m very happy to inform you an excellent performance in this quarter by Moltech Packaging where the revenues have shot up by 22% and EBITDA margin has also shot up from 18 odd percentage last year to 19.7%. EBITDA per kg grew by 29% and net profit is up by around 35%. This growth was possible due to all the sectors are doing very good in this year starting with the Paint segment where thanks to ABG the numbers have gone up considerably and followed by Pharma which is which has first time last year itself crosses the breakeven has again grown by around 11% over the Q4 and started contributing handsomely to the bottom line and Food and FMCG after a long time of several quarters has crossed double digits and almost achieved 14% 16% growth rate in the current quarter.
So with all the segments doing good only Lubricant has a negative growth which was expected in this general monsoon season. Otherwise all the segments are on a forward run Giving us almost 20% 22% growth in revenue and improved profitability in all sectors across. What is more exciting for us at Maltech is the speed at which the pharma packaging is getting adopted and approved by several major players in the pharma industry. As we talked in the last quarter again four to six audits have taken place and everybody approving our facilities and started taking our products for trials.
So as you know and as I explained in the last quarter meeting, Pharma is a little long time taking but I am pleasantly surprised that we could break in much faster than others. And going forward several approvals which have been received in the last 34 months will start turning into commercial orders improving the numbers in a better pace in the next few quarters. And I still feel that our set target of 35 crores for the current financial year for Pharma is very much achievable. And in the FMCG also as I said last year, printing bottlenecks have been completely removed which enabled us to manage well with the label connectivity and IML product timely supplies.
In spite of almost one month shortened summer, you all know that right from May rains started all over India and consumption of ice cream and yogurts have fallen drastically. But in spite of that we have reached a 16% growth in food and FMCG which I feel is a very good indicator for future growth. And our Panipat Thinwahal food products is yet to start. It will be starting in the month of August and that will also start adding to the another high value product product line of operation for Maltech. So with all this the future looks good and bright and we are back on high speed track now for last couple of years more of project implementation and creating the greenfield projects has taken our attention and efforts and now it is a time that these will be put into better utilization which will improve the margins and profitability.
I sincerely hope so. Now I put it back to the operator for the question and answers through which we can discuss more in detail.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you you may press star and do participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Javeer Shekhavat from Ambit Capital. Please go ahead.
Jaiveer Shekhawat
Sure. Thank you so much. And sir, congrats on a good quarter. My first question is on your paints business. Could you quantify the amount of growth that you have seen both for Aditya Birla Grass team as well as for the rest of the business? That will be my first question in terms of volumes.
Janumahanti Lakshmana Rao
See I don’t want to break up between the companies because that would be against our, you know, non disclosure. But Aditya Birla is the main contributor for our growth is that much I can tell. However, even Asian paints and other companies like AK and KN if not a positive growth and neutral growth or sustained the same levels of the previous quarter. So that way I see majority of the growth has come through abc.
Jaiveer Shekhawat
Sure. And sir, do you expect this quarterly run rate to sustain during the rest of the year. And barring let’s say the quarterly variation, that happened because of the season demand. But otherwise do you expect this 5,500 tons of paint containers sort of continue for the rest of the year?
Janumahanti Lakshmana Rao
Yeah, we see that this paint will at least sustain at 5500, 5400 level at least till third quarter, second quarter because third quarter will be a little dip after Diwali. But again fourth quarter will start picking up. So probably we may end up 21 to 22,000 tonnes in the paint sector this year. It can still be better provided how the market dynamics play between the players.
Jaiveer Shekhawat
Sure. And so on your press release you did mention, let’s say some of the newer customers for your pharma business. I see you have mentioned Laurus plus some of the other pharma companies as well. So are these like recent approvals? Were you already in discussion with these and then given that you’ve already guided on the scale of the business, is there any change to that, let’s say over the next two to three years in terms of the scale that you look to maintain?
Janumahanti Lakshmana Rao
I’m positive that what I guided last quarter will continue to happen. Inventia Amen. Laris Lab Pulse these guys have been, I mean reviewing us and monitoring our products and testing our products for last several months. But now they started, at least a couple of them started giving commercial orders and couple of them are yet to release. And I also said some of them, there are several other companies which have testing our products. So all these numbers will start gradually adding to the pharma business and I foresee a better number can achieve even in this current year if things go well.
Because couple of new products which have been approved and commercial orders are issued will be starting in August. So they will contribute may be a crore of rupees per month in terms of turnover. But lot of other products which have been approved or under approval by some of these clients, you start adding, each will be adding, you know, 25 to 40, 50 lakhs per month. So like this, as we accumulate the numbers can double next year probably, if not, if not at least 50, 60%. So if you reach 35 to 40 this year, probably assuming 50 to 60 crores next year as a certain possibility.
Jaiveer Shekhawat
And sir, lastly you also mentioned in your presentation you are trying to get into other non seasonal industries as well. You know, to diversify away from say seasonal products like ice cream. Could you quantify which other segments and then the scale of those segments over the couple years? I mean would it Be sizable in the overall scheme of things. Yes, yes.
Janumahanti Lakshmana Rao
For example, you take Surfaxil which is a detergent product. It’s now contributing handsomely to our Q pack sales. And similarly Harlich’s, which is a more of a nutritional drink and consumed throughout the year is started picking up numbers. We have some products from Marico which are also completely annual. We have protein products which are also annual consumption. There is no much of seasonality in protein consumption. So coming to noodles, that’s again a product where the consumption is there every season. So only ice cream and yogurt continue to be major players. But they are seasonal in nature at least.
Especially in rainy season. Consumption of ice creams and yogurt come down considerably in India so that that trend will continue. But because of these products, agro products, products which are micro fertilizers which are again, you know, required in the rainy season. So they will add numbers. Similarly, sweets seed boxes are picking up numbers very much. We are now introduced sippers which will go more of course again back in summer. But these sweet boxes go well in our festival season starting now. So June, July onwards, things will start picking up till end of this year, till new year, there are several festivals and festivities including Christmas.
So until end of the year, I mean a calendar year we’ll have demand for those boxes and we are doubling that capacity now. And then restaurant packs throughout the year there is demand for them. So like this the dependence on ice creams and yogurt would be coming down. What compared to five years ago our product mix and today we have much wider range. And Paripat plant will be starting production in August and but sure it will catch up with the festival demand in north and it will catch up for the summer by March when the next summer starts.
So that will be adding numbers in food and FMCG. So we are confident that 15%, 16% growth, what we achieved in food and FMCG can continue.
Jaiveer Shekhawat
Sure sir. Last question is on your overall volume outlook, volume growth outlook. And also in terms of your capacity, what I understand is you’re also expanding for ABG as well which is set to get commissioned by second quarter. And then of course this Panipat facility which comes in from August onwards. Are there any other capacities that you have planned?
Janumahanti Lakshmana Rao
Yeah, capacities in Pharma are also gradually being increased as per the demand increase. We have even acquired a new land of two and a half acres adjacent to our Sultanpur project. And there also again there will be investments in terms of injection moulding machines, moulds IBM machines and even new product range is also under final consideration. If we go for that product range that can also require some investments. Not very huge because it’s not greenfield but there will be reasonable investments in pharma growth. So that way this year also there will be investment to the tune of 80 to 90 crores.
If not 130, 140 which we invested in the last three financial years.
Jaiveer Shekhawat
Sure. So anything on the volume outlook that you expect for this year?
Janumahanti Lakshmana Rao
Yeah, the volume outlook we are aiming at at least 45,000 tonnes for the full year. 43 to 45,000 depending upon how the other quarters go by. That’s why we still hold on to the expectation of 12 to 15% volume growth or at least 18, 20% of revenue growth. One positive point I am glad about is if you look at the per kg sale revenue it’s shot up from 198 last year to 211. Whereas the that actually contributed well to the EBITDA. That is because of the product mix is improving. We are more of pharma added and from zero to whatever.
Nine crores, seven and half crores now and food and FMCG has grown considerably. So these two are the factors which increased our net revenue per kilogram.
Jaiveer Shekhawat
Sure. Thank you so much sir and wish you all the best.
Janumahanti Lakshmana Rao
Thank you.
operator
Thank you. The next question is from the line of Abhishek Navalgun from Centrum Broking. Please go ahead.
Abhishek Navalgund
Yeah, hi. Thanks for the opportunity and congrats on a good set of numbers. So first question is on Asian paints. So in your opening comments you mentioned that large part of the growth in paints is driven by CPG and you’re. Saying that its CBG portfolio is largely flattish. But we were talking about some shift. Of volumes happening from let’s say non IML to.
Janumahanti Lakshmana Rao
Your voice is not clear.
Abhishek Navalgund
Hello. Is it better?
Janumahanti Lakshmana Rao
Yeah, yeah, better now. Yeah, yeah.
Abhishek Navalgund
I’m saying there was a talk about, you know, shift of volumes from non IML to IML wherein we clearly have an edge or maybe peers. So why it is not getting reflected in the numbers as such? I am talking about Asian paints.
Janumahanti Lakshmana Rao
Yeah, Asian pains are neutral. You remember last two, three years we had a actual negative growth in Asian paint. 10 to 12% drop in the last three financial years and this year we are stable. That itself is a good indicator of you know, staying fit with Asian paint through IML. And with now IML facilities have been created in all plants. Earlier we used to have supply them from Hyderabad or part of Daman but now we have facility at Satara, Vizag and Mysore also ready to go with IML where we set up robots and compatible moulds.
So I am hoping that that should improve our numbers in the gradually during the next few quarters. So ultimately I hope we’ll end up with a positive digit of growth in Asian paints also.
Abhishek Navalgund
Sure. Okay. And second one on the capacity utilization I think you mentioned that Satara was at 55, 57% in FY27. FY25. But we were at almost I think 75% utilization somewhere in so possible to share the number for the quarter in pains overall and.
Janumahanti Lakshmana Rao
Again not very impressive because we have added several machines there in view of their Mahad requirement. So the Satara plant require utilization is still in 50s 50, 55% only because of the extra capacity that has been created in the LASIK 6 months that is getting slowly occupied because their Mahad operations are improving at ABG and once it takes off, hopefully in this season, their season starts from July till November. Hopefully that number will improve to 60, 65%.
Abhishek Navalgund
Sure, sure. And I think we are improving our quarterly run rate for pharma and you talked about new approvals also. So I mean what sort of annual number you are looking at this year.
Janumahanti Lakshmana Rao
We are still hoping on 35 crores would be a good number to reach from 7, 8 crores last full year. 8, 9 crores. So that will be quadrupling our numbers. So from 9 crores or whatever last year, full year we will be achieving at around 3536 crores for sure. And if few things happen as per our plan, it can even exceed.
Abhishek Navalgund
Sure, sure, sure. And possible to share. I mean which part of your portfolio, let’s say your effervescent tubes or canisters vis a vis bottles and caps. Which part is actually getting a lot more traction or it’s equally effervescent tubes.
Janumahanti Lakshmana Rao
If you ask me. Majority of the more than 50% of the sale is happening in EV tubes. But caps and bottles will overtake very soon because number of approvals are pending or cleared for trial runs applied for FDA approval, client approval. So several products, I would say more than 20 products are at different approval stage by clients and one by one are getting released. For example Gravity released two, three products in the month of May, June and now they are talking about another three product release. So those numbers will be added. And Msnlaris, we have several other clients who have approved but not even started testing our products.
After approval they take the testing and after testing commercial trials Commercial trial kebab. Sorry, Machine trials. Machine trial kebab, Final commercial orders. Even commercial orders won’t come in millions. They first give couple of lakhs and see their lines and everything. And then fourth stage they go for giving us major stake. If you ask me, hardly couple of clients are adopted us as one of the major suppliers, not even the most highest. We are still getting maybe 20, 25% of share from couple of clients whereas more than 15 clients have approved us. So once all these 15 clients take us as one of their major supplier the number can shoot up.
That I don’t want to speculate now but I’m sure it’s going to be good in the coming years.
Abhishek Navalgund
Right? Right. So we are in the process of doubling the capacity. So with this potential expansion, I mean the peak revenue can be like 100 crores from pharma.
Janumahanti Lakshmana Rao
Yeah. The current capacity itself we can reach 60 to 70 crores and is new expansion of another 10, 12 crores brownfield will take it beyond 100 crores possibility possible capacity and then there will be a continuous upgrowth because we have taken the land I told last quarter for another two and a half acres adjacent to the current land. And there probably the second phase I would call this is the first phase expansion what is happening during this year and second phase expansion will happen in that land next year. That is next financial year for sure.
Because the way it’s going on the facility will not be able to hold the growth we need to construct. The whole thing is pharma buildings and interior standard specs to reach. We need at least nine to 12 months for the building itself. So we are starting that blue plan blueprint now for the new land also but probably will start only towards the end of this calendar year and reach into production by middle of next year. So this year production fortunately there is enough space in the existing building itself there we will be able to accommodate the current year expansion and future expansion will happen in the new land probably in the next financial year.
Abhishek Navalgund
Sure. And one last thing from my side, the thin wall capacity north which we are starting from August. Do we have any sort of visibility from existing clients, let’s say few FMCG companies and maybe which all categories will be targeting to begin with. Yeah.
Janumahanti Lakshmana Rao
We have Surf Excel for example at Buddhi. So that volumes which are now currently going all the way from Daman or Hyderabad will be molded there. We have new client added in what is that company Protein powder we are supplying from Hyderabad which will be now converted there and a range of New sweet boxes for the north market will be starting production. A range of ice cream products and yogurt products by February March will start. So accordingly their operations can reach a level of almost 2,1800 to 2,000 tonnes per annum by next financial year. This year it will be ramping up gradually from 0 to 1000 tonnes by end of this financial year and probably 1500 to 1800 tons during the next financial year in the food and FMCG segment.
Abhishek Navalgund
Perfect. Thank you sir.
operator
Thank you. The next question is from the line of Sanchit Narang from Narang family office. Please go ahead.
Jaiveer Shekhawat
Is my Voice Audible?
Abhishek Navalgund
Yes.
operator
Mr. Singchit, please go ahead.
Jaiveer Shekhawat
So my question is like now we have reached 41.8 per kg. You have guided us for the last quarter 42 rupees per ton. But going forward given Q1 is one of your strongest quarters. How would we achieve that? 42 rupees or we will cross it. You are having visibility to cross it or we or we will fail. Short. I am a little confused on that.
Janumahanti Lakshmana Rao
This is again a speculative thing. I said 42, 42 rupees is our target. And we are already there at 41.6. And going forward, of course as you said, this is the best quarter. But the better quarters might emerge if pharma takes up in a way beyond. Beyond you know what it is in this Q1. And probably it can safeguard the bottom line if not the top line. And so I am still confident we will be in the bracket of 4142 for the full year. And I won’t be surprised if it marginally crosses also.
Jaiveer Shekhawat
And last quarter you guided us for any breakthrough on the JSW to act.
Janumahanti Lakshmana Rao
JSW has acquired Akonoble. I didn’t say there will be a breakthrough. I said business will continue with Axon Noble.
Jaiveer Shekhawat
Yeah, I was that we might get a entrance through actionable. Yeah, yeah. Is there any talks about that not yet happened?
Janumahanti Lakshmana Rao
Nothing actually the last previous management only is still monitoring and communicating with us. There is no change has been in even announced formally. So I can’t comment as of now. And that is not a certainty that we will get their business. The last time also I mentioned that it may happen may not happen. So we would only know once their new management really takes over.
Jaiveer Shekhawat
Thank you.
operator
Thank you. The next question is from the line of Shirish Paradeshi from Motila Law school. Please go ahead.
Shirish Pardeshi
Good evening Mr. Rao. Thank you for the opportunity and congratulations. Can you give me a breakup of 11,400 crore by segment.
Janumahanti Lakshmana Rao
11,400 tons you mean?
Shirish Pardeshi
Yeah, yeah.
Janumahanti Lakshmana Rao
Paint is around 5,600. Loops is 2400. Wood and Q pack together is 3200, 190 pharma.
Shirish Pardeshi
Okay, the second question I have is the chair facility which came up first. So what is the capacity utilization there and is it significantly helping to improve our ebitda? Because.
Janumahanti Lakshmana Rao
Yeah, capacity utilization has improved a bit. It is now close to 68%. And. It will certainly once it crosses 60, 65% its contribution to the bottom line will be reasonable if not great. And we are now shifting Gulf production from Vizag to Chayar. Most of the molds are ready and we are setting up one set of pale manufacturing at CAR to meet the lubricant demand. Because lubricant moulds are different, paint molds are different. So once that starts probably in August, the charger capacity utilization will further improve.
Shirish Pardeshi
Okay, the other thing I wanted to check in food and fmcg, this kind of growth, I mean you have given a lot of commentary. But top two customer or top three customers, are they giving indication that the throughput will improve and the products basket will also improve?
Janumahanti Lakshmana Rao
The throughput improvement depends upon their product performance. But the basket improvement I can see definitely will happen because more and more food and FMCG products are seeking IML containers. Now we are in talks with couple of MNCs for projects which can involve reasonable number of quantities of products which can add significantly to the numbers. Even Hul last year growth was this quarter growth compared to last year was very considerable. I don’t want to quote the percentage but it is definitely a big jump. And going forward now we added a. What is that Marico? We added Nestle and Harle, that is GSK who have started taking their products in IML containers.
So once they see the traction happening in the market, there will be lot of interest in the other competitive products. So we see that FMCG there is a long way to go in growth. Even the shippers we have introduced for the first time in India with iml, those are yet to take off in a big way. But we are in talks with couple of if not huge players, medium players generally it is always the mid sized players take a faster call on packaging change and then the biggies follow. So we hope that shippers market will establish over the next few quarters.
So that is where we are also putting our fingers into and we hope that will contribute to the growth in food and fmcc.
Shirish Pardeshi
Okay, just last question on Panipat is Panipat is now Fully operational and will be commercialized for most of the products.
Janumahanti Lakshmana Rao
See, Panipat is also currently running at around 78% in this quarter. That’s a pretty good percentage to achieve in last within one and a half year. And there we have already started the Q pack production. Some of the Q packs for surf, Excel detergent and some of the edible oil suppliers we have started giving from Panipat itself. So going forward again we are adding some more machines there in this year the current capacity of 5,000 tons probably would shoot up to somewhere around 6,500 to 7,000 including food and FMCZ, food and FMCG there currently is maybe 4, 500, 600 tons.
Another thousand tons we will be adding now and maybe another 7, 800 in the Pale business that is meant for ABG growth. So Paripat will continue to have good traction because of the product mix, both qpat, food and pails, almost like it’s Hyderabad unit. So that’s another focus unit for us and probably it will continue to enjoy better capacity utilization.
Shirish Pardeshi
Okay, just last follow up on the overall volume growth. What you’ve delivered this quarter is very good. But if you have to maintain 15% which are the top two segment which will drive in the rest of year, of course paint will be one, Paint.
Janumahanti Lakshmana Rao
Will continue to be there because of abg. Numbers are growing up compared to the last year in a big way. So paint will continue to be adding good numbers food and FMCG. And in a bigger way though it is small number is pharma in terms of ebitda. Additional are improving the EBITDA Pharma will play a major role. Whereas for the volumes growth, food and FMCG and paint will continue to be rising.
Shirish Pardeshi
Okay, thank you and all the best sir.
Janumahanti Lakshmana Rao
Thank you.
operator
Thank you. The next question is from the line of Pratyush an individual investor. Please go ahead.
Unidentified Speaker
Hello.
Jaiveer Shekhawat
Yes, Mr.
Unidentified Speaker
Yes, thank you. I have three questions mainly. Firstly, what is the lead time for procurement of like goods from any customer in each of the segments paints and FMCG and pharma.
Janumahanti Lakshmana Rao
What do you mean by receiving the goods? You mean supplying the goods.
Unidentified Speaker
So I mean like for example, if Asian paints requires thousand extra containers in December, they want it to be sold to the distributor by December. Then considering the time they will require to manufacture the paint and then supply it, in which months would they probably place the order for the thousand containers with you? Would it be like September or October? How many months in advance would it typically be?
Janumahanti Lakshmana Rao
Couple of weeks, two, three weeks in advance?
Unidentified Speaker
Okay. And it’s similar for all the sectors.
Janumahanti Lakshmana Rao
Mostly nobody keeps a huge stock of packaging materials purchase. They generally take the packaging material just few days in advance and the moment they fill it, it is the time for distribution. So mostly.
Unidentified Speaker
Okay.
Janumahanti Lakshmana Rao
In my opinion, most of the clients will move off the goods within two, three weeks from the day they procure from us.
Unidentified Speaker
Okay, so second question. Like I see that there’s a lot for example they say in hydrogen. So there’s a company time Technoplast which uses polymers to make the container for hydrogen, CNG etc. So I wanted to understand if that’s something you will also in the future. And if not, is there a very big difference between plastic packaging and polymer packaging because of which you would not enter the segment?
Janumahanti Lakshmana Rao
Yes, I have to study that what you are talking about hydrogen packing and other if it is made of multi layer film or tubes that is different from injection molding. Injection molding is always like containers where especially in injection molding you get only white mouth containers. So very gaseous products will be difficult to handle in containers. You need only tubular or multi layer film packing for that. You can’t do it.
Unidentified Speaker
Okay, okay.
Janumahanti Lakshmana Rao
Not efficient. Yeah.
Unidentified Speaker
Okay, so last question. So basically like there was some started manufacturing their own packaging. So I mean what kind of reasons are there for which for example Asian paints or any big packaging might not backward integrate and start manufacturing their own tubs? Like just a customer confrontation based question.
Janumahanti Lakshmana Rao
Yeah. None of the companies have their own packaging manufacturing projects because it makes no sense to produce the packaging products. Because the volumes that you can produce on an injection molding machine are humongous. And if your plant is not able to consume it, then you have to find how to utilize your capacity. So nobody want to go to the pain of manufacturing their own packaging products? Never in the history. Very rarely you might notice it. Maybe in terms of tins for edible oil. Because of the tin is cheap product and transportation eats lot of money.
Most of the tins are made in house by the edible oil companies. That is the only area where the packaging products are made. Whereas containers are very high end technology and investment is huge and nobody would venture to go into it as a in house capacity. That is. Yes, you don’t need not have.
Unidentified Speaker
Okay, just one additional question, sir. Generally in pharma or any sector, till what extent are customers willing to give any one company for example Moltech or any other raw material area company like to how would you be receiving? Would it be 2050 or how much of their order would be given to you?
Janumahanti Lakshmana Rao
Yeah, typically big companies look at 20, 25% is a comfortable share for one big one supplier. But you will be surprised that we have several customers. Even today we are the 100% supplier to them. That includes industrial levers, that includes even Mandalys which are international. So there are companies like Shell Mobile and Volvoin where we are more than 6, 60% supplier. Castrol, we are more than 60, 70% supplier. So that all depends upon the reputation and credentials of the packaging.
Unidentified Speaker
Okay, got it, sir.
Jaiveer Shekhawat
Thank you very much.
Janumahanti Lakshmana Rao
Thank you.
operator
Thank you. The next question is from the line of Chirag from Keynote Capitals. Please go ahead.
Chirag Maroo
Thank you for the opportunity. Most of my questions are answered. However, I would like to know, you have mentioned about just in time supply chain process for the fmcg. Could you let us know what kind of working capital improvisation are taking place because of this?
Janumahanti Lakshmana Rao
No, no. Actually what we mean by just in time is previously we used to have problems handling the label connectivity IML label connectivity. We used to have almost three to four weeks waiting period and then supplying to client would take another one week. So we used to quote from five weeks as a supply time for any new product or a new artwork development. Whereas now with the enhanced capacities both in printing and die cutting, the connectivity can be as low as 7 to 10 days. So what I when we said that improvement is connectivity in the just in time means within a week, 10 days.
Because as I said to the previous question, typically clients plan two to three weeks packaging material. So they will be planning on first of the month supplies to come by middle of the month. So if earlier we used to take about a month to meet such a demand or more than a month, today we brought it down to 10 days. Thanks to the extra capacities we created in printing and better quality, better inventory control. In fact, in this process, inventory will not go up. Rather inventory becomes little leaner. Because earlier we used to keep for big brands two to three months inventory.
But today we do not need to because of higher capacity available and better machinery which can produce short quantities with the low rejections and low cost. So this enhanced printing facilities enable us to improve our supply connectivity. Especially in main season where the clients also cannot assess their demand. They think they can sell one lakh containers of thousand milliliters in April. All of a sudden it will become two, two and a half lakhs. And then they will scamper to procure the packaging material without which they can’t sell. So that is when we’ll be in a position to respond better.
Now with the Enhancer printing facilities.
Chirag Maroo
That is the meaning, correct? So if I am understanding it correct, this means that the testing phase where customer requ Multiple changes in their first batch of product we can deliver it faster due to which it would be easier for us to get approvals from a newer client. One second, the inventory days that we have today on our books is expected to reduce with the help of this, correct?
Janumahanti Lakshmana Rao
Yeah. Yes or no for the second one. But surely for the first one yes because of better serviceability during the during the summer especially or high season like festival pack or whatever. We used to lose quite a few clients in the past. Now the connectivity has become faster and most of the clients are happy this season with our supplies in time. And that is not further going to improve now because of two reasons. One is Panipat being closer to north will now service the north clients and supply within 23 days instead of 10 days from Hyderabad.
Second is IML quantities will be can be produced quickly on the new machinery what we added and can be brought into production faster than earlier. So instead of three to five weeks waiting there’s surges in demand can be met within 10 days. So that will make them depend more on Maltech.
Chirag Maroo
Fair point, fair point. So my second question. Could you give me the mix of iml, non IML volume and value?
Janumahanti Lakshmana Rao
Yeah, yeah. That still continue to be similar to last quarter. It is around 75% total IML and label 25% non IML. But in the non IML again there is a pharma of whatever 3,4% to be removed. Pumps also so it will be around 20% only skin printing and other decoration.
Chirag Maroo
Got it, got it.
Janumahanti Lakshmana Rao
And value terms in terms of value it is still similar 77% up from 70% last Q1 that’s in one year there is an improvement of 70% becoming 77%. So more adoption of IML and HDL and non IML has come down.
Unidentified Speaker
If I’m correct, IML products are at least 10 percentage expensive than non IML. Right?
Janumahanti Lakshmana Rao
You can’t talk in percentage because in big pails like 20 liter pail, the cost of the pail is 200 rupees. The delta won’t be 20 rupees, it. May be 78 rupees. But in the case of small container like a 100 ML container, 4 rupees will become 450. There it may be 10 to 15%. So it is higher but not exactly.
Chirag Maroo
And the next question is that what kind of Today if we have a capacity of 16,000, what kind of capacity are we expected to have by the end of FY26?
Janumahanti Lakshmana Rao
From whatever the missionary what we have planned already and which are expected to be added during the current financial year we foresee that 61,500 may reach around 70,000 tons including pharma. Now currently it is 6,364. Probably it will go beyond 70, 70 to 2000 by end of this financial year.
Chirag Maroo
Okay, perfect. Thank you. Thank you so much sir.
operator
Thank you. The next question is from the line of Yash Bajaj from Lucky Capital. Please go ahead.
Yash Bajaj
Yes, good evening and congratulations on the great set of numbers. So my first question is what capacity utilization are we at today?
Janumahanti Lakshmana Rao
68% and chair is around. Sorry, Panipat is 78%. JR is 68%.
Yash Bajaj
Okay, okay. And what okay and how are we planning to increase capacity? Sir, in this, in these two plants.
Janumahanti Lakshmana Rao
Polyput as I just answered will be reaching almost 7,000 tons including food.
Yash Bajaj
Okay.
Janumahanti Lakshmana Rao
Gradually in August it food will be added about 1800 to 1000 tons. It’s already having a 5,600tons of Q pack capacity. Another 800 to 1000 will be added in the next 4,5 months starting from August. So by end of this financial year we’ll have another 2,000, 1,000 of food and maybe another 7, 800 of peel and Q pack will be added bringing it to 7,000 tons by end of the financial year.
Yash Bajaj
Okay, okay. But in this I believe Panhipat was 5,000 tons, right? In terms of capacity as of today.
Janumahanti Lakshmana Rao
Yeah.
Yash Bajaj
Okay, okay. And whatever we are increasing the capacity is not for paints, it is for food and FMCG.
Janumahanti Lakshmana Rao
No, partly paint, maybe 500 to 800 will be for paints which is also fungible with the Q pack. That will take care of both in case of ABG sudden but in demand it can be fungible with qpeg. So that’s about thousand tons and about thousand tons of food.
Yash Bajaj
Understood. And so my second question is this quarter loop segment has grown 7,8%. Could you help us with, I mean where is the growth driven from? Because it was kind of flattish or de growing for the past one, two years.
Janumahanti Lakshmana Rao
No, no, this year also if you see the volumes, it is a degrowth.
operator
Hello, Mr. Yes.
Janumahanti Lakshmana Rao
Yeah, it’s only in the compared to Q4 also it is a degrowth. Compared to Q4 is a gain. But compared to the Q1 of last year it’s down. It has improved a bit. But when compared to the Q1 of last year because you know this year rain started very early right from May beginning. There are rains all over south. And this has impacted the lubricant sales also.
Yash Bajaj
Okay.
Janumahanti Lakshmana Rao
Because movement of goods will come down. So I think that is the reason for Loops negative growth. But I think it may end up with a 00 kind of situation again because Loops is a kind of stagnant. Industry in terms of volume. Sure. And so my last question is regarding the pharma division.
Yash Bajaj
Sir. What kind of run rate would we exit at this year? What are the targets this year for us? Because we have.
Janumahanti Lakshmana Rao
We anticipate this 7.4, 7.5 crores. What we achieved this year, this quarter will start ramping up in couple of quarters. And probably we will be able to reach a level of 10% plus crores per quarter by end of this financial year. And that should put us somewhere around 35, 36 crores for the full year.
Yash Bajaj
35, 35, 36.
Janumahanti Lakshmana Rao
Got that’s all from 10 crores last year.
Yash Bajaj
Sure. That’s all from my side. Thank you. And all the best.
operator
Thank you. The next question is from the line of Guru Darshan from Kitara Capital. Please go ahead.
Guru Darshan
Congratulations. Sorry if I’m repeating the question. I just want to understand what are the key drivers of FMCG growth? FMCG and FMCG growth in the current quarter?
Janumahanti Lakshmana Rao
As I explained in my previous questions. Answers. Food and FMCG growth has come because of our improved serviceability in terms of label connectivity and supplying in time. That is one of the key reasons because clients were always there for us. It was our inability last year to not able to make supplies in time which we have corrected by adding sufficient capacities in printing and die cutting. And now the label connectivity has improved and supplies have certainly improved. And in spite of weak summer we still have ended up with 16% growth in food, that is plain food.
Not adding the Q pack which is a really satisfying number. It would have been more than 20% had the summer continued in May. Even though it didn’t, we have reached a 16% growth. And another adding to that is some of the clients realizing Moltec’s quality and consistency. And they are also coming back. But I would say that our ability to connect the dots is what really improved our numbers.
Guru Darshan
All right, Got it. The second question. When you say the farmer segment has achieved this even, are you referring to that it’s EBITDA break even?
Janumahanti Lakshmana Rao
No, we are talking about the bottom line.
Guru Darshan
PBT breaking.
Janumahanti Lakshmana Rao
Yeah. Pat. Yeah.
Guru Darshan
Thank you sir. Thank you so much.
operator
Thank you. The next question is from the line of Deepak Saha from NBI Ltd. Please go ahead.
Unidentified Speaker
Hi, I’m audible.
operator
Yes, Deepak. Deepak sir, please go ahead.
Unidentified Speaker
Sir, couple of questions. First on the food and HMCG Park. Now given the fact that we had this sporadic monsoons or inconsistent summer season. So had we had a normal season you said we could have done 20%. So for the upcoming quarters that kind of for the full year, I mean it’s not 20% but for the coming quarters can 20% kind of a growth be possible? For the food and SMCB side It.
Janumahanti Lakshmana Rao
Should be because we are starting sweet packs manufacturing in Panipat from August maybe middle of August 10th or 15th we are planning inauguration of the food and FMCG production there already. Q pack production started few months ago but the sweet boxes will start from sometime in the middle of August and that will slowly pick up over the next quarter. So in Q3 onwards I can see the numbers moving towards 20% if not Q2 and even in Q2 it can be decently good. But Q3 onwards I can be sure that we will be able to reach.
I mean we are aiming to reach 20% volume growth in food and FMCC.
Unidentified Speaker
Got it. On the I missed the value split that you get for IML and non IML did you mention 76%? 77% on the value in terms of.
Janumahanti Lakshmana Rao
Value for IML split 77 value okay. And quantity 75 okay.
Unidentified Speaker
And if I’m not mistaken, the earlier commentary was that we are quite confident given the shift towards IML we’ll be heading towards 80% plus. So do you stick to that kind of expectation for the full year? Oh, I mean at least for the coming quarters.
Janumahanti Lakshmana Rao
Full year in few quarters it should go back go to that level and probably it will stabilize there. Then may not. You know there will be still some people who still buy plain containers still buy pharmaceutical is mostly unprinted. So like that slowly it may stagnate at around 80% 75. 80% between.
Unidentified Speaker
Got it. And okay. Raw material side. Sir, if you can give me some understanding about the the mechanism for pass down the raw material prices to your customers. Especially given the volatility in crude oil sites. So if you can share some color, do we pass it immediately? It comes with a lag some timeline if you can share how do we operate with passing down the raw material prices to the consumers?
Janumahanti Lakshmana Rao
Yeah, it is as usual like in the past sometimes 1 month old price is applicable or 3 months average price. Very rarely it is 6 months average price also for couple of clients. So Mostly it is 75% of the clients go for the previous month pricing.
Unidentified Speaker
Got it. And lastly sir, on the recycled content part, I think earlier we were talking 20% kind of a number for some of the industries that minimum usage of this recycled content and we have certain margin improvement also associated with it. So currently, if you can give some color, how is that particular number? Is it good? Because earlier we of the belief that this number should gradually go up. So if you can give us some understanding there.
Janumahanti Lakshmana Rao
Yeah. In RCP there is certainly a growth in utilization and thanks to some of the suppliers who have established the product quality, we are in a better position to use more and more rcep. I think in this current financial year we have crossed using 7,000 7,500 tons of of RCP already that when you see it as a quantity on 38,264 last year, it’s close to. Sorry. On this 11,400 per quarter. On 44,000 it’s more than 15%. And gradually I think we inch towards 20% utilization in the current financial year.
Unidentified Speaker
Okay, and that’s relevant for industrial. That’s paint and nukes. Right? I mean it’s not relevant for your food and qpex?
Janumahanti Lakshmana Rao
No. Pharma? No. So that we only for the about 70% of our volume.
Unidentified Speaker
Got it. And as far as.
Janumahanti Lakshmana Rao
Yeah.
Unidentified Speaker
Okay, okay, got it. So one last thing. As well as the fungibility of these machines are concerned, so probably we can. It is durable for pharma and food and on the other side, lubes and paint. So these are fungible, right? I mean we can’t use paint and pharma capacity to large extent. I mean for small requirement we can. But if you can share some color, the fungibility between segments.
Janumahanti Lakshmana Rao
That’s a good question. Paints, loops and even Q pack are fungible. Q pack also is kind of a pale and even its margins are also similar to pails. So paint loops and Q pack are kind of fungible products, food and pharma. Yes, they are fungible because the mission size, screw size and even the robotics. Of course robotics are not required much for pharma other than tubes on the GMP standards. What we keep the food allow some of the pharma products to be moulded in food section, for example EV tubes, they don’t need DMF facility. So whenever there is excess capacity requirement in pharma, we can run that in food section to some extent.
But most of the pharma products which are pure pharma, we cannot run them in food. So there are Limitations, but there is some scope for fungibility, especially food products. If the demand picks up, they can easily be run in pharma, though it is not advisable in cost point of view. But still, to meet the sudden surge in demand for food, we can make use of the emissions in the pharmacy.
Unidentified Speaker
Got it. So that’s all from my end and all the best for the rest of the year. Thank you.
Janumahanti Lakshmana Rao
Thank you.
operator
Thank you. The next question is from the line of Deepak from Sundaram Mutual Fund. Please go ahead.
Jaiveer Shekhawat
Thank you for the opportunity. Am I audible?
operator
Yes, Mr. Deepak, please go ahead.
Unidentified Speaker
Yes, I just had one question. So earlier you indicated that the volume mix between IML and non IML has broadly remained similar, I think Q4 of Q previous quarter and Q1. Right. And despite similarity in the volume mix between IML and IML, your gross profit per kg has gone up by 3 rupees. Right. On QOQ basis. Now if I look at your volume split, the only difference I could figure out is that your paints volume, which contributed around 45% in Q4, has gone up to 49%. Right. So your IML remains same, but your paint volume has gone up and that is what is leading to your GP per kg improvement on QoQ basis.
So would it be fair to conclude that the IML mix within the paint segment has gone higher, let’s say in Q4 versus Q1 versus Q4? Yes.
Janumahanti Lakshmana Rao
As I told you in the last quarter, Asian paints is adopting more and more IML in their top brands and that enabled us to use. We enabled us to set up even robotic facilities all the five plants across India now. So that has also encouraged them to go for more IML adoption. That is one of the reasons for better improvement. But these numbers of 75% and 75% in Q4 and Q1 are little, you know, kind of confusing because you should notice that food and FMCG growth is what contributed to the better EBITDA margin considerably. And of course a part of the paints moving towards IML also is one of the reasons.
Unidentified Speaker
Okay, but so your food and fmcg, if I look at your volume mix, actually have come down by few basis points. So that should not lead to any material improvement in GP per kg. Right. It has to be the IML contribution which is coming from the paint.
Janumahanti Lakshmana Rao
No, no, if you look at the absolute number, the 1379 tonnes in Q4 has become 1568 in Q1, so that’s up by almost 14%.
Unidentified Speaker
Okay, but in your Volume mixer. It hasn’t made a difference. That’s what I’m trying to conclude. Not on the absolute level, but the volume mix.
Janumahanti Lakshmana Rao
Oh. In the overall volume mix it is still 13.79% which was exactly. If you are looking at that way. Yes. But in terms of Q4 to Q1, that rise of 200 tons of food and FMCG contributes decently better because almost we have double the EBITDA compared to paint and loops in the food and FMCZ.
Unidentified Speaker
Okay, so would it be possible for you to tell what is the let’s say IML and non IML split between the segments?
Janumahanti Lakshmana Rao
Paints, loops probably that need to be divided and given to you by our team. If you can write to Ramabu, he can answer.
Unidentified Speaker
Oh, okay. Thank you for answering the questions and all the best.
Janumahanti Lakshmana Rao
Thank you.
operator
Thank you. The next question is from the line of Pranchal Mukhija from growth spear ventures llp. Please go ahead.
Pranjal Mukhija
Sir, I’m audible.
operator
Yes Mr. Pranjal, please go ahead.
Pranjal Mukhija
Hi sir. Thank you for giving me this opportunity and congratulations on the great, great set of numbers. Sir, I have a couple of questions on the pharma side. So the first question is more from my clarity point of view but the, so the, the Sultan facility that we’re operating, the pharma part there. So currently the Production capacity is 1500 tons right there.
Janumahanti Lakshmana Rao
Yeah.
Pranjal Mukhija
And by in the near term we’re expecting this to reach to 3,000, right?
Janumahanti Lakshmana Rao
Not 3,000, it will probably go to 2,000 quickly in this next six months and probably next financial year we will be trying to hit about 3,000, 3,500. So current plan is to bring it at least up to 2,000 tons in the immediate couple of quarters.
Pranjal Mukhija
Right. So this capacity is built on what kind of land? Like in acres.
Janumahanti Lakshmana Rao
This present capacity is in a building area I can say is around 70, 50,000 and 25,000 shed is getting ready for as a warehouse that will take couple of months to complete. By end of September I think that warehouse also will be ready. So now currently it is housed in 50,000 square feet area and another 25,000 will be added by September. And by then these new capacities also will be added so that we will have enough space for warehousing and storage. So any, any land wise we acquired two and half acres of land. So within, given the flower index, I think typically we can easily add about 2 to 3 lakh square feet in the future for pharma, not in immediate future, for the, you know, next few years.
Pranjal Mukhija
So from 75,000 you’re saying to 2 to 3 lakhs additional.
Janumahanti Lakshmana Rao
75,000 to another additional of 2 and a half to 3 lakh square feet is possible in the new land what we acquired, currently 50,000, 25,000 is being added that will be ready.
Pranjal Mukhija
So with this new land we can 5x basically 5x like pharma capacity.
Janumahanti Lakshmana Rao
Yes, another 4 to 5x is possible.
Pranjal Mukhija
Right? Thank you sir, that was insightful. Secondly, like you mentioned in the, in the call that There are some 20 products under development in pharma. So like I just wanted to understand like what kind of products are these? Are these like slightly more complex products in terms of like how you’re making them? Like how are the realizations on these products related to the current products that we’re making EV tubes, canisters and like caps. So just wanted some clarity on that.
Janumahanti Lakshmana Rao
I think it’s a good question you asked because when I say 20 products, it’s not 20 new products, 20 products which are required by the industry. For example I, I told last time also There is a 300ml jar with say 25 grams weight. Some clients require thicker bottle, some people want lighter bottle. So because of the product and they want a same 300ml bottle, same dimensions, but a 35 gram instead of 25 gram or they want 15 grams. So how you quickly develop those cores and cavities to change the weight is something I call it as a new application.
Instead of saying new product, I should have said a new application for the same product. So those changes, we are doing almost 10 to 15 of them and new products, another three to four of them which are completely new for us in our product range, not necessarily new in the industry. So that way we are widening our product range and their value additions if they are bottles and caps, as I said, their medium range, somewhere around 80 to 100, 120 rupees per kg, maybe 80 to 100. But if it is other products like caps and new products, they will be in the danger of 150, 170 per kilogram.
Pranjal Mukhija
Now that we’ve also like gotten into molded wild trail rays and like the CRC caps. And how are these products compared to the current products that are making in.
Janumahanti Lakshmana Rao
Terms of realizations they will be middle order, something around 120 range. Right.
Pranjal Mukhija
And so finally one last question. I just wanted some update on the exports part of the division. Like you were saying that we were getting, we had supplied some trial quantities in US and again like you were looking to, looking for some Opportunities in Europe as well. So some update on that sir?
Janumahanti Lakshmana Rao
Yeah, we are now actually actively pursuing exports to Bangladesh and Europe because US is kind of stagnation. Stagnated clients are waiting for some clarity on the duty structure. So repeat orders are not yet received. There is one inquiry going on but they are waiting for clarity on the duty structures before they make a form orders. But going forward there are opportunities for exports and we set up a team to work on that. A two member team is working currently on export push. So things will happen. As I said in pharma it’s always a long run process of approval trials and commercial orders.
So that process started with couple of clients in us, one or two clients in Bangladesh, Europe, one client has accepted, then he taken a small batch for filling trials. So maybe another few more months down the line something can happen there. And we are also participating in the European Pharma Exhibition sometime in October. Is it October? Pharmaxl End of. End of October. End of October. So probably we will have better leads and a bigger product range to display when we go go there. So I don’t count on big export number this year, but that can start adding reasonable quantities from next year.
Pranjal Mukhija
Right. And sir, since we’re sort of like short on pharma capacity in terms of the demand that we’re seeing in this segment. So like how would the management like, like sort of distribute the bandwidth in terms of like the focus on pharma divisions in domestic versus export market and generally like what is the realization spread like is realization better in export for pharma products compared to India?
Janumahanti Lakshmana Rao
Not necessarily. Given the transport cost and other elements of cost. Even Indian and export margins are almost similar. Little better in export in especially products like canisters and small products like caps, but they’ll be equal and bottles and other bigger products because the transport eats away considerable cost. So I would say exports to countries like Europe and US will be marginally better in terms of margins but not so exciting.
Pranjal Mukhija
Right, thank you sir, these are my questions and all the best to the team sir.
Janumahanti Lakshmana Rao
Thank you.
Pranjal Mukhija
Thank you.
operator
Thank you. That was the last question for today. I now hand the conference over to the management for closing comments.
Janumahanti Lakshmana Rao
Thank you all for participating actively in the Q1 conference of Moltech Packaging. And I also thank Nitin from MK for giving us this opportunity and thanks Operator for conducting the meeting in an organized manner. Thank you very much all. Have a nice day. Bye.
operator
Thank you on behalf of MK Global Financial Services limited That concludes this conference. Thank you for joining us and you may now disconnect your lines.