RAJSHREE POLYPACK LTD (NSE: RPPL) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Ramswaroop Radheshyam Thard — Chairman and Managing Director
Analysts:
Unidentified Participant
Ajai Augustine — Analyst
Presentation:
operator
Ladies and Gentlemen, good evening. I welcome you all to the quarter three financial year 26 conference call to discuss the operational and financial performance for the Rashri Polyepec Limited. As a reminder, all participant lines within the listen mode only and there will be an opportunity for you to ask questions. Please note that this conference is being recorded. I will now hand over the call to the management for their opening remarks after which we will be open the floor for questions. Thank you and over to you Ramsroom Sir.
Ramswaroop Radheshyam Thard — Chairman and Managing Director
Thank you Divya. Good evening everyone and thank you for joining us today. I am pleased to welcome all our shareholders, analysts and participants to the Rashri Poly Pack Limited earnings call for the third quarter of FY26. With me is today our CFO Mr. Sunil Sharma. I hope you have all had the chance to go through our investor presentation. Let me begin with a quick overview of our performance for quarter three FY26 revenue from the operations stood at rupees 71.62 crores compared to rupees 72.70 crore in quarter three last year reflecting a year on year decline of 1.49%.
EBITDA was at rupees 10.3 crores compared to rupees 9.05 crore in quarter three FY25 representing a 13.82% year on year growth. EBITDA margins improved to 14.4% compared to 12.5% in quarter three last year. Profit after tax was at 2.13 crore compared to 1.7 crore last year reflecting a 25% year on year increase. While revenue declined marginally year on year. Margins improved meaningfully due to better product mix and operational efficiency. However, sequentially Quarter three tends to be seasonally softer particularly on the domestic front. Let me now touch upon our domestic and export markets. Despite U S tariff headwinds, exports continue to remain a strong growth driver for us in quarter three.
In quarter three FY26 exports revenue stood at rupees 20.54 crores compared to 14.58 crores in quarter three FY25 reflecting a 40.8% growth year on year. This growth was largely driven by strong traction injection molding products from existing customers. However, the US markets continue to remain challenging due to prevailing tariff structure. Now with the ease in the tariff, we have actively started engaging with existing customers for further growth as well as new potential customers to start the new business. At the same time, we are actively diversifying geographically and currently exports are there to 13 countries helping reduce concentration risk.
On the domestic front, revenues in quarter three FY26 stood at rupees 51 crore as compared to 58 crore in a quarter through FY25 reflecting a 12% year on our decline. The key factors impacting the domestic revenue where lower raw metal prices impacting realization especially in sheet sales and moderation in institution offtake during the quarter due to seasonal impact, we have seen an improved traction towards the end of the quarter and expect domestic volume to strengthen. In code Q4 product wise performance in quarter 3 FY26 injection molding products grew very strongly up by 38% from Rupees 12.8 crores to 17.6 crore.
This continues to be our strongest performing segment driven primarily by export demand. Thermoform packaging products remain stable at rupees 38.3 crores. Sheet sale were lower at 15.22 crore as compared to 18.66 cr last year reflecting 18.4% year on year decline. During the quarter we increased the extrusion capacity to 25,600 metric ton per annum from 24,000 metric ton per annum, strengthening backward integration and positioning ourselves for higher volume across packaging products. On the expenses front, COGS improved from 60.6% to 56.4%. Employee cost increased to around 18% on year end basis primarily on account of annual incremental done in April as well as unit three which commenced production commercial product operation during the year.
The same was partly offset by saving in the job work charges for sheet extrusion and thermoforming business. One of the important highlight is signing the term sheet with a renewable power producer to purchase renewable power at a lower price under captive arrangement. As per the term sheet we shall be investing rupees 2.25 cr appro approximately in the renewal energy SPB while remaining investment will be done by the power company. We expect to save around 1.5 crore approximate per annum in power cost once the project starts generating power which we expect to happen in around five to six months from now.
Further on the interest front we have finalized arrangements with the back to convert the sum of rupees 20 crore loan into foreign currency loan at the lower interest rate which will help us to save approximately one crore rupees per annum. At the same time we are constantly working on finding ways to reduce the overall debt exposure to the company by bringing in more efficiency. We shall keep you updated on the same on the Olive Eco Pack the joint venture, our JV company Olive EcoPac continues to make encouraging Progress. We have installed capacity of 7 million pieces per day, making only one of the largest integrated producers in the country in this category.
In quarter three, our paper coating was 1085 metric ton and finished goods we did 1035 metric turn with utilization of around 28%. So we are steadily increasing our utilization financially. Olive recorded a turnover of 15.69 crore of revenue in quarter three, significantly higher than 12.05 crore in Q2. EBITDA improved to 1.15 crore with a margin of 7.33% reflecting meaningful operation improvement from 0.05 crore in Q2. We are also seeing good traction from large domestic customers and we are gaining interest from Europe and Middle East. We remain confident of achieving sales of 19 to 20 crore revenue in quarter four and continuing the journey towards profitability.
Further, with the ease in the tariff in us, we expect to restart discussion with U.S. customers and positives start exporting to us from quarter one of FY27. During the year, both Olive and RPPL participated in Global exhibitions for packaging. The event helped strengthen our visibility in international markets, particularly in North America and enabled meaningful engagement with existing and prospective customers. Looking ahead, we expect recovery in domestic volume in Q4. Export momentum, particularly in injection molding remains encouraging. OLIVE continues progressing towards operating scale and improving margins. Renewable energy integration will support long term margin stability and reduction in the interest rates will also help in improving the margins.
While overall quarter three has been relatively softer sequentially, the structural growth drivers of the business remain intact. With this, I conclude the business update for the quarter. We will be now happy to take your questions.
Questions and Answers:
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Ramswaroop Radheshyam Thard
Yeah, Mr. Augustine, you are audible.
Ajai Augustine
Yeah, I was trying to find the button.
Ramswaroop Radheshyam Thard
Yeah,
Ajai Augustine
get the button. Okay, thank you sir. Thank you for taking my question, sir. I wanted to have a little bit. Color on this JV operations actually. So the loss has come down. That is a good thing to know. But in your books you have completely made the investment zero. Because the investment.
Ramswaroop Radheshyam Thard
Yeah, yeah.
Ajai Augustine
So can you tell me accumulated, what is the Loss position for this company. So far.
Ramswaroop Radheshyam Thard
For Olivico pack. I’ll. Just a minute. It’s around 12. 12 crore.
Ajai Augustine
That’s. That’s our share or is it for the.
Ramswaroop Radheshyam Thard
Our share.
Ajai Augustine
Okay, so 24 crores.
Ramswaroop Radheshyam Thard
Yeah.
Ajai Augustine
For the total company JV. Okay, so going forward once.
Ramswaroop Radheshyam Thard
Yeah, go ahead.
Ajai Augustine
So. So if the company is making 5 crore profit next year.
Ramswaroop Radheshyam Thard
Yes, yes, of course, of course.
Ajai Augustine
So it means that we take at least one to two years for this.
Ramswaroop Radheshyam Thard
Yes, yes. For us to get the profitability Number at least 1 1/2 year, we’ll need to first recover that loss.
Ajai Augustine
Okay so since the company is making losses, how is the cash flow position? Is it all running on bank debt? Or like how is it like the company might be generating. May not be generating free cash. Right. So it’s all funded by bank lines. Or like how is the negative working capital or cash position of JV?Basically
Ramswaroop Radheshyam Thard
I will say like with 20 crores of revenue we will be able to manage the cash flow with respect to depreciation and the bank interest and the other operations. We are not taking our interest what we have invested. We are of course accruing it in the books. And so. So that much cash flow is not going which is roughly 1.5, 1.6 crore. Both the JVs put together per. Per quarter. But at 24, 25 crores we’ll be probably roughly at PBT level. We’ll be doing the break even. So. So there then. So it’s. It’s matter of another.
I will say we are expecting 19 to 20 crore in this quarter and maybe 23 to 24 crore in next quarter. So with that roughly will be break even at PBT level.
Ajai Augustine
Curious to understand like this particular product you are targeting mostly the US or is it like Europe is also a big market?
Ramswaroop Radheshyam Thard
No, it is domestic. Currently majority of the sale is coming from the domestic market. Hello.
Ajai Augustine
Okay. Yeah, yeah.
Ramswaroop Radheshyam Thard
Majority of the sales is coming from the domestic market. We have around 15% of revenue coming from exports which is in from UK and partly from Middle East. But US remains of course one of the strong market and there’s a big demand for this category of the product in US and Europe. So that definitely with this reduction in the tariff we expect that business to get started in those markets.
Ajai Augustine
So with the, the tariff issue almost settled and with the new FDA. So like for next year, okay, Q4 is anyway 920 crores. But for the next year as a.Whole,
Ramswaroop Radheshyam Thard
yes from, from Q1 we could, we could start seeing the moment already the Discussions have started with the customers who were sitting on the fence. So the. The. Already the discussions have been initiated again and we. We expect definitely to see the revenue coming from those geographies.
Ajai Augustine
Sir, just one suggestion actually this. Since you’re going through by this route of accounting it’s very difficult to actually identify like what is exactly happening with the jv. Like had it been a subsidiary like consolidated statement would have given condition like this much cash burn is there or financial. But this like. I mean you have written, you have disclosed everything. I’m not denying the fact. But it’s. Unless you go very minute and deep inside you’ll not be able to understand exactly what is the position for this company. So like I like I was surprised to see that like another. I mean it will take at least. One to two years to materially see our financials improving. At least the ups point of view. So. So that’s because the accounting style was like this. I mean wherein you do 50 direct hit on the piano. So I as an investor I would be more happy if had you considered as a subsidiary and otherwise. It’s not that there’s another. Another option of showing the financial separately for this JV so that things become very clear. That’s requested.
Ramswaroop Radheshyam Thard
We are. We. We are consolidated subsidiary after subsidiary only we can do. What we can do is we can put those numbers or maybe in our investor presentation if possible so that they. They will put clarity on that so we can start doing that from next investor presentation.
Ajai Augustine
Okay. Thank you so much. And one more thing sir. This. On this staff attrition point. So recently the HR head has also resigned.
Ramswaroop Radheshyam Thard
Huh. One one hr. Yeah. Yeah. He was. So We. We have already. Yeah. So.
Ajai Augustine
So have you found a replacement for them or still.
Ramswaroop Radheshyam Thard
Yeah. No. We. We have internally promoted a person who was. Who was working with us since last 34 years. So he has been promoted internally only.
Ajai Augustine
Okay. And the company secretary also got.
Ramswaroop Radheshyam Thard
Hello.
Ajai Augustine
But generally as a. As a strategy for the company.
Ramswaroop Radheshyam Thard
Your voice is breaking, Mr. Augustine. In between your voice is breaking.
Ajai Augustine
Employees. Are we having any special scheme or so? Because I’m everyone’s. You know. Like frequently there something like this happening in the company. So it’s not a good sign. Right? I mean when the company is.
Ramswaroop Radheshyam Thard
Your voice is little breaking. But what I understood is about retaining of the people. We. We are giving esop also to the. To our key people who are there in the company apart from the salaries. But as you understand like the. The After 57 years sometimes people want to switch over. It’s not that people are switching just in one or two years so and we have found replacement who can actively do the same kind of work because he was working under him only so we are not very much concerned about that particular this thing but of course yes we, we are trying our best in terms of retaining the people provided that doesn’t affect our budget also and we keep people motivated with this esop which we give almost every year like.
Ajai Augustine
Thank you sir. I joined.
Ramswaroop Radheshyam Thard
Yeah.
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Unidentified Participant
Hi sir, good evening. Can you please give us some outlook for. I don’t know, I joined the call a little late. So what’s the outlook for the next two three years? Both in terms of revenues and margins.
Ramswaroop Radheshyam Thard
For plastic business we are Looking at around 360 to 370 ODE crore revenue for 27 and without any further major capex our capacity is around 400 odd crore. So the idea will be to reach this capacity without any further CapEx first.
Unidentified Participant
Okay.
Ramswaroop Radheshyam Thard
And on the paper business we are looking at around 120. 230 crores for FY27 and roughly 180 to 190 crores for FY28.
Unidentified Participant
Okay.
Ramswaroop Radheshyam Thard
So business will be roughly at the margin of 15, 15 and a half percent EBITDA and paper business will be at 16, 16 and a half percent EBITDA there.
Unidentified Participant
Which is kind of right now you’re achieving how much?
Ramswaroop Radheshyam Thard
We are roughly at 14.5%.
Unidentified Participant
Got it, got it. And also in terms of working capital, how do you see the working capital playing out?
Ramswaroop Radheshyam Thard
Working capital cycle actually also depends upon the RM prices. Sometimes if the RM is going up we have to stock the material or sometimes during the start of the season we we have to keep certain inventory for certain customer to meet the seasonal demand. But the idea is to reduce the working capital by by 10 to 15 crores over next two quarters. That is the whole idea.
Unidentified Participant
Got it. And in terms of capex, do you need any capex to achieve these numbers? Say ballpark, you’re saying about 500 cr for FY27.
Ramswaroop Radheshyam Thard
No, no major capex. No major capex up around 3, 4 crores here and there but apart from that no major capex.
Unidentified Participant
Got it. Got it. So right now you’re working at what.Kind of Capacity utilization,
Ramswaroop Radheshyam Thard
Different processes are at different capacities. But as I said, like we are roughly at in terms of revenue on plastic, we are at roughly at 33040 crores of revenue. So we have additional 50, 60 crores of revenue to be increased. And we are like in some segment we are at 70%. In some we are at 90%. So and somewhere we are at 55%. So the different processes are at different utilization level.
Unidentified Participant
Got it. So strategically, what are you looking at? Say after FY27, would you continue to grow in the segments that you are in? Are you looking to grow into some new segments?
Ramswaroop Radheshyam Thard
Like. Of course we see a good potential in a paper as a category also once we are able to stabilize that and reach to 80% of the installed capacity there, we see a good potential on. Also in our plastic business and injection molding we see a good growth coming along with the thermoforming. So they’re both the ones we stabilize and for a year or so reduce our debt. Then we will definitely look forward to grow further in these two categories itself by at least another 40 to 50%. So the next target will be to go to 700750 odd crore in these two segment itself.
At the same time we’ll try to identify certain new products which we are in process which can add or complement to the existing range of products. Got it.
Unidentified Participant
And what’s the current debt level?
Ramswaroop Radheshyam Thard
We are roughly at 9,500 crores all put together, term loan and cash credit.
Ramswaroop Radheshyam Thard
And that’s roughly what’s the cost of debt?
Ramswaroop Radheshyam Thard
7 and a half percent to 8% on an average. Out of which now we have. We have. We have reduced around 1518 odd crores to 2.25%.
Unidentified Participant
There’s more like packing credit?
Ramswaroop Radheshyam Thard
No, it was a JPY loan which we took.
Unidentified Participant
Okay, so are you hedging that loan or it’s a unhedged loan?
Ramswaroop Radheshyam Thard
We have natural exports, so we are not hedging it. Natural exports to Japan more it is in USD. At the end of the day it is linked with USD only. And if we see the 5 year trend, JPY is more or less stable. Like because hours is one year only tenure. It’s not a long tenure.
Unidentified Participant
Okay. All right. Thank you very much.
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operator
Thank you very much. As there are no further questions, I would now like to hand the conference over to the management for the closing comments. Thank you. And over to you, Ramshep sir.
Ramswaroop Radheshyam Thard
Thank you very much, ladies and gentlemen, for taking the time off and joining us for the Q3 FY26 confidence call. Wishing you all good health. Thank you very much.