TCPL Packaging Ltd (NSE: TCPLPACK) Q3 2025 Earnings Call dated Feb. 17, 2025
Corporate Participants:
Jenny Rose Kunnappally — Investor Relations, CDR, India
Akshay Kanoria — Executive Director
Analysts:
Nishant Bagrecha — Analyst
Monish Ghodke — Analyst
Nitish Rege — Analyst
Harsh Shah — Analyst
Shaukat Ali — Analyst
Rohan Kale — Analyst
Unidentified Participant
Pulkit Singhal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to TCPL Packaging Limited’s 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms Jenny Rose from CDR India. Thank you, and over to you, Ms Rose.
Jenny Rose Kunnappally — Investor Relations, CDR, India
Good afternoon, everyone, and thank you for joining us on TCPL Packaging’s Q3 and 9M FY ’25 earnings conference call. We have with us today Mr Akshay, Executive Directors; and Mr Jiten Rajan, Chief Financial Officer of the company. We would like to begin the call with brief opening remarks from the management, following which we will have the forum open for an interactive question-and-answer session. Before we start, I would like to point out that some statements made in today’s call may be forward-looking in nature and a disclaimer to this effect has been included in the results presentation shared with you earlier.
I would now like to invite Mr Akshay to make his opening remarks. Over to you, Akshah. Thank you.
Akshay Kanoria — Executive Director
Thank you. Good afternoon, everyone, and thank you all for joining us on our earnings call. I will initiate the call by taking you through our business highlights for the period under review, after which we will open the forum to a Q&A session.
We are pleased to share that we have achieved yet another record quarter, driven by the solid performance of our core segments, paperboard and flexible packaging. Both segments have benefited from a favorable product mix, operational efficiencies and a continually expanding customer-base. In addition, after a weak corresponding quarter last year, we have bounced back strongly, resulting in significant year-on-year growth. On a sequential basis, growth has remained healthy, highlighting sustained business progress.
For this quarter, our consolidated revenues grew by 32% year-on-year, reaching INR480 crore. Our EBITDA grew by 29%, reaching INR71 crores with margins steady at 15%. Our PBT grew 71% to INR48 crore, while both PAT and cash profits posted strong growth of 101% and 46% on a year-on-year basis, respectively. Our Flexible Packaging segment continues to perform exceptionally well in the domestic market, supported by robust demand across key end-user industries. Additionally, better utilization of our newly commissioned line has contributed to growth, further enhancing operational efficiency.
At the same time, our core paperboard Packaging segment has recorded stable-growth domestically, along with stronger performance in international markets. This broad-based momentum, coupled with our focus on operational efficiencies and product innovation has enabled us to deliver solid results. With domestic trends expected to improve further in the coming quarters, we are confident in maintaining our long-term growth trajectory.
Moving on to key developments, we are excited to announce our exclusive manufacturing agreement with Bentate, a pioneer and patent holder inventorated pizza box technology. This collaboration will enhance our presence in the fast-growing food packaging and food delivery segment by introducing an innovative value-added product, vented patented die-cut vent technology allows steam to escape while retaining heat, ensuring that pizza, garlic bread and other dry food items maintain their optimal quality even through long-distance transportation. This solution will initially cater to premium pizza outlets in Mumbai, Delhi, Goa, et-cetera with plans for a nationwide rollout driven by demand from national QSR chain and also national food delivery chain.
We are also pleased to welcome Mr Aniketh Talati to our Board as an Independent Director. MR. Talati is a Senior partner at and Telati LLP and has served as the President of the Institute of Chartered Accountants of India, ICAI for ’23-’24. With his expertise in finance, regulation, digital transformation and sustainability, he will be an invaluable addition to our leadership team. He also holds prominent roles on several prestigious boards, including the Government Accounting Standards Advisory Board and the Insurance Regulatory and Development Authority of India, IRDAI. His experience will help guide TCPL’s strategic direction and strengthen our governance framework.
Lastly, we are proud to share that TCPL has received five prestigious awards at the Indian Flexible Packaging and Folding Carton Manufacturers Association If CAR Awards 2024, recognizing our excellence in packaging design across both flexible and folding carton packaging. These celebrate the creativity, functionality and innovation behind our award-winning SKUs for customers and brands including Bella Vita, Dark Fantasy, Olivia, Kido and Aquatic Science Pouch. This achievement is a testament to the expertise of our R&D team in developing cutting-edge packaging solutions and it further strengthens our position as one of India’s leading producers of sustainable packaging solutions.
Additionally, my grandfather, Mr K.K., the Chairman of PCPL, was honored with the Hurund Award for the most respected entrepreneur and leader in sustainable packaging, reinforcing our commitment to sustainable innovation and environmental responsibility. And finally, to conclude, we are excited about the completion of our greenfield facility near Chennai, which is dedicated to manufacturing paperboard cartons and set to be commissioned in the current quarter in a few weeks.
This expansion will enhance our logistics and service capabilities, strategically positioning us to serve key industrial hubs across the region and further accelerate our growth. It also represents a significant milestone in our long-term growth strategy. We remain focused on driving sustainable growth, expanding our capabilities and capitalizing on emerging opportunities. With a strong foundation in innovation, strategic investments and a commitment to sustainability, we are confident in our ability to create long-term value for all our stakeholders.
Thank you for your continued support. Thank you very much. We will now begin with the question-and-answer session.
Questions and Answers:
Operator
Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. For participants, you may press star and 1 to ask a question the first question is from the line of Bagreja from Incred. Please go-ahead.
Nishant Bagrecha
And hi,. Congratulations to the team for a very strong delivery this quarter. So particularly, I have three questions. So firstly on the growth part. So again on the domestic business front. So I just wanted to know that wasn’t a volume or pricing led growth that we saw this quarter, like again with Phili posting strong volume growth this quarter also. So did we see some benefit in our and carton segment from this particular client?
Akshay Kanoria
You want me to answer one-by-one or you give all three.
Nishant Bagrecha
One-by-one is fine, sir.
Akshay Kanoria
Okay, fine. Yeah. So we had a healthy volume growth even in the domestic segment in this quarter. And I mean, we don’t share the breakup and exact numbers, but it was very encouraging and better than the market, I’d say. But obviously, last year same quarter was a very bad quarter. I mean we had a degrowth. So compared to that, certainly, I mean, there is a base effect, but generally speaking, we had a pretty good quarter.
Nishant Bagrecha
Thank you. Secondly, sir, we have delivered a very strong export growth this quarter as well. So what was this led by? Again, is this some new client addition or new geography expansion, so again, which categories are you seeing better growth here.
Akshay Kanoria
So again, without getting into too much specifics, I’ll just say that, I mean, no significant new geography or client addition as such in this quarter compared to any other quarter, but it’s an overall improvement in our export performance.
Nishant Bagrecha
Okay. Okay. So we expect this momentum to continue and particularly in the export market?
Akshay Kanoria
Yeah. So I mean, obviously, you can’t guide for like any rate of growth or something, but you know, performance has been quite consistent last few quarters or last several quarters and we hope to continue.
Nishant Bagrecha
Okay. And sir, lastly, on this new foray into the Pizza boxes, so what kind of revenue potential do we see from this? And again, which facility will the production take place in?
Akshay Kanoria
So basically, this is a specialty pizza box technology. It’s essentially it — it is meant to solve for the issue which you may be having, but you don’t really realize it is when you get pizza and a food delivery after 20, 30 minutes in the bike, by the time it arrives at your house, it tends to get soggy and it also tends to get cold. So this addresses to great extent that challenge. So even today, they are already working with some of the small — very premium pizza outlets all over the country. And now that time has come to scale-up because these food delivery, home delivery pizza has really taken off and I think now it is a very large chunk of the market.
So we are starting with some of the medium range pizza chains like the slightly higher-priced guys, and helping them to expand Pan-India. So this will not be any one particular region or geography, that’s the kind of advantage we are bringing because we have factories pan-India so we can deliver to these national changes, is depot span India where the Ventit was not able to do that. So that’s why they came to us. And together we are approaching even the larger chains, but there is a on cost on the box. So you know that it’s really up to that brand that do they want to take that hit in exchange for better-quality.
So we are hoping that as the mid-market kind of shifts to this technology, even the mass-market guys will be pressured to follow. And it is a superior technology. There is a significant improvement in the temperature and the taste of the product when it’s packaged in a ventage box versus a traditional pizza box.
Nishant Bagrecha
Okay. So again, so how are the margins versus the core folding cartons here?
Akshay Kanoria
So this I can’t comment, it is customer-specific and job specific. It’s a new tech, it’s a new product for us. We’re just starting. So I can’t comment, but it’s a good addition to our basket. And you know even if it doesn’t yield as much as we hope for in terms of business, it certainly gives us an in with these large chains to sell our other packaging as well. So it’s a good you know technology to have in our — in our belt.
Nishant Bagrecha
Okay. And sir, lastly on this, again, on the Pizza boxes, so how we added Pizza boxes this quarter. So do we plan to enter any other segment going-forward, particularly in the QSR segment?
Akshay Kanoria
See, we are at any point of time, five or 10 different projects that we work on. Out of that, one, two, three maybe get commercialized and we are very picky, but we are always working and traveling and trying to find new technology to bring to the market. So this is an ongoing endeavor. When something pans out or doesn’t pan-out, those things are sometimes not in our hands.
Nishant Bagrecha
Okay. Okay, sure. Thanks and best of luck for the upcoming quarters. I’ll get back-in the queue.
Operator
Thank you. Participants, you may press R&1 to ask the question. Ladies and gentlemen, you may press R&1 to ask the question. Next question is from the line of Sagar Shah from Spark. Please go-ahead. Sagar, may I request you to unmute your line and proceed with your question, please. Sagar, if you can hear us, can you please unmute your line and proceed with your question? Due to no response, we move to our next participant. Next question is from the line of Monesh from HDFC Mutual Fund. Please go-ahead.
Monish Ghodke
Hello. Thank you for the opportunity. So if we see the packaging board prices, the raw-material prices are quite low. I mean, there is a price correction in paper and paper board. So what kind of — does it act as a tailwind or headwind for us when the RM prices are low and what kind of impact does this have in our on our margins?
Akshay Kanoria
So these prices being low or high does help on a short-term basis, I would say. Largely we get pass-through or we have to give a pass-through to customers. So it’s a temporary effect, if anything and our business is quite agnostic on the raw-material price because we work on, we pass-through the raw-material price increase or decrease. Now obviously, to what extent we pass-through or we can get away with not passing-through depends a lot on-market condition, supply-and-demand in our end-use industry, but you know any effect is usually like a temporary one whether to the upside or downside.
Monish Ghodke
No. And I understand you don’t share this volume or guidance anything, but what kind of growth should we assume? I mean what is your capacity utilization as of now and on a, let’s say, two to three year basis, what kind of growth volume or in value terms we should assume? And in terms of margins, should we continue to expect the similar margins?
Akshay Kanoria
So last question first. The margins are dependent on obviously the raw-material pricing, et-cetera, but they also dependent on the product mix. Flexible packaging tends to be a lower-margin business, but you get a similar return on capital because it’s a higher asset turn. But so as that grows to that extent, margin can come down a little bit, but effectively it’s the same thing. And as far as the capacity utilization is concerned, we are at we’re at about 80% plus kind of level. Now we are just adding Chennai and we just added some capacity in Goa. In the coming year, we have a few capex plans. But broadly 80 plus sort of level, we still some headroom for further growth, no problem.
As far as any guidance is concerned, I mean, yes, you said it at the start, we don’t give, but like we target just continuing our long-term average growth rate and what is our growth dependent on to great extent it is dependent on the — on the market growth, that is our end-use segment, which is the consumer product demand. Consumer demand has been a little bit weak in India the last few years and the growth rate has been in the very low-single digit.
We have grown thanks to a diversification of product mix, flexible packaging, export, new geography — geographical addition, which is continuing. But I mean, obviously the domestic market growth, we’re really banking on that coming back-in a bigger way. Now with this new tax cut in the budget and hopefully inflation seems to be moderating somewhat. So these two factors, I think should help with driving further consumer demand growth, which is a positive for our industry.
Monish Ghodke
Okay. Thank you.
Akshay Kanoria
Thank you.
Operator
Thank you. Participants, you may press R&1 to ask a question. Next question is from the line of from Crest Capital. Please go-ahead.
Nitish Rege
Hey, hi. While Y-o-Y margins have remained flat, you know, just wanted to understand the reason behind the decline in EBITDA margin on a quarter-on-quarter level Is it because of mix or flexible being a higher share or price increase?
Akshay Kanoria
So again, looking at it quarter-on-quarter is a bit, you know, misleading, but a little bit of everything. First of all, Q2 is typically always best — best quarter because we have the festive season demand boost, which helps the business. And secondly, yes, the flexible packaging performance was a bit better than usual in the Q3. So that has brought down the total margin. Pretty much these two factors only I would point to, I mean, there’s not really anything very significant that’s changed apart from that.
Nitish Rege
Got it. And could you give an update on creative? What’s the current revenue run-rate? Have you onboarded any new customers and the earlier customers which we had onboarded have they scaled-up?
Akshay Kanoria
Yeah, before I get to that, one thing I’d point out is that if you look at a Nine-Month to nine-month comparison, the margin is pretty much the same, like there’s not any much change. It’s just this quarter-on-quarter per niche, Turab or. But if you look at it on an overall basis, it’s pretty much the same. As far as creative is concerned, look, we are adding new customers, no doubt. This electronics industry has seen a lot of swicking and up-and-down in the last two years. If you see a big part of our optimism was driven by the large explosion of this variables industry, you know, like the smart watches and the headphones, which really took off in India last couple of years, but that has really moderated last year.
The industry has actually had a negative growth in 2024, which was a very significant headwind. And there’s been a shift in the segment to — if you look at the value, even the electronics value growth is still there, but volume growth is not there because people are moving upwards in the — that smartphone value chain, but that’s not helping in terms of volume. So that has — these are two headwinds that we’ve faced in the last one year. However, we are seeing increasing tractions in the consumer products business with high value-added packaging becoming more-and-more the norm.
We have like penetrated into this perfumes category, cosmetics category. So there we are quite optimistic. So overall, you know, we’ve grown in high-double digit, but not high enough and we hope to continue high double-digit growth in Creative. And as far as the profitability is concerned, it’s mainly constrained by the low-base of revenue, which again through the growth, I think will get corrected, but it’s a low sort of drag on the overall company. So we are hoping it will improve and become a contributor in coming year.
Nitish Rege
And any guidance on the revenue run-rate, current revenue run-rate?
Akshay Kanoria
No guidance as such, but I think this year, I think this year we’ll do about INR50 odd crores. So in the coming year, we hope to definitely increase that in very-high double-digit rate, but dependent on-market, of course.
Nitish Rege
Okay, great. Thanks. That’s all from my side. Thank you so much.
Akshay Kanoria
Thank you.
Operator
Thank you. Next question is from the line of Harsh Shah from Mandan AMC. Please go-ahead.
Harsh Shah
Yeah, hi. Thanks for taking my question. So first is on your capex, please.
Akshay Kanoria
I can’t hear you, please. Can you be more clear?
Harsh Shah
Yeah, hi. Can you hear me now?
Akshay Kanoria
Yeah.
Harsh Shah
Yeah. So the first question is on your capex initiatives. Could you talk more about it as in now that the Chennai plant is downstream, what do you over next 12 to 15 months both in terms of how much capacities are you planning to add and what would be the quantum of capex?
Akshay Kanoria
Yeah. So, see, we have over 20 printing lines today and Chennai is going to start with one printing line. So on the overall capacity, we’ll be adding less than 10% to the overall capacity. But in — that plant has a lot of room for further growth. So as the market over there picks up and we are able to fill-up that capacity, there’s a lot of room for further growth and the new capex that will come there will not be so onerous because the you know the fixed component like the utilities and the building work and all of that is already sort of taken care of. So further capacity over there will come very quickly and much cheaper.
As far as the rest of the company is concerned, in the past year, we have invested significantly in increasing our factory area in couple of our plants that has taken-up a fair bit of cash. And we have also for expanded our capacity in one or two of our plants. In our flexible packaging plant also, we are expanding the room and we are putting new-generation of sustainable boilers to lessen our carbon footprint and also expand the room in the factory. We are also doing some further expansion in ancillary segment, which we will declare soon. These are the basic capacity additions that we’ve done in the last year.
As far as the coming year is concerned, this new capex, which I alluded to that will get completed and we will also have some couple of more announcements hopefully to make in coming months where we are planning a few new investments. As far as the domestic, I mean the folding carton business is concerned, now we are pan-India, we have a reach all over. So basis, the utilization at any particular point of time we can add capacity without too much of a lead-time because we have the space so we just have to sort of plug-in the machinery. So what was not exactly tell you as such in detail
Harsh Shah
But what do you doing when you say ancillary, any capex has been added?
Akshay Kanoria
We’ll get into that in the coming quarter I think.
Harsh Shah
All right, something planned, but something which you will announce as of now.
Akshay Kanoria
Yeah, yeah.
Harsh Shah
Got it. And even the quantum, if you could kind of or even that something which is what is budgeted in terms of capex for, let’s say, FY ’26.
Akshay Kanoria
So FY ’25, we’ve got a spend of about INR150 odd CR for the whole year and FY ’26 budget has not been finalized yet because a couple of these projects are still in the planning stage. Once it gets more how shall we say, more once we have some more flesh on it, we will, you know, come back with you.
Harsh Shah
Got it, got it. And it is packaging your space in terms of where we had some issues, I think last year in terms of getting the machinery up and running. Where are we — what’s the progress there?
Akshay Kanoria
Yeah. So Innofilms we merged into the flexible packaging, I mean, into the company only. So now that doesn’t get reported separately, but the performance has improved and we are quite optimistic on the output.
Harsh Shah
So I mean, would the good growth in like say packaging some of it be attributable to?
Akshay Kanoria
Not much. It’s a general organic market growth, but this is a very positive thing for customers. So whenever we are trying to get into new customers, this is like a marketing tool, which helps us even if they don’t really take any much output out of it. But the customers want to have the possibility of this sustainable solution. So in the last couple of years since COVID, this whole sustainability story has sort of taken a backseat to just generally preserving the market-share at our customers end. I’m talking about ours.
But everyone is very cognizant of the fact that this is going to be a big theme in the coming years. So people are transitioning one or two small brands at a time or the premium brands to the sustainable solutions in preparation for a larger play later. So the guys who are leading in that effort today will reap the benefit in coming years when that shift really happened. So we’ve seen that in couple of other industries where certain peers of ours made investments in advance and they are getting the benefit now after a few years. At the time, people said that why you investing so aggressively in these areas. So that’s what we are sort of taking a view that these things are going to be the order of the day-in coming years.
Harsh Shah
Got it. But the teasing issues are behind us now.
Akshay Kanoria
Yeah, yeah, more or less.
Harsh Shah
Yeah. And one is — so now the subsidiaries basically your creative offset, right? That’s the only subsidiary which we have, material subsidiaries. What would be the margin profile there?
Akshay Kanoria
I mean Middle-East also, that’s the other.
Harsh Shah
Okay. Okay. So what would be the margin profile of? I mean trend-wise on a sequential basis improving
Akshay Kanoria
Or sorry, the little bit of your voice got cut, I couldn’t understand.
Harsh Shah
I’m saying the margin profile of your subsidiary business on a trend-wise, is it improving?
Akshay Kanoria
So the creative is the EBITDA breakeven and a small cash loss that we see improving in coming months as the utilization improves further. And the other subsidiary is mostly like sort of a trading company, it’s essentially just a marketing company. So that doesn’t really have any much EBITDA or margin. It’s just a — to make — to facilitate the sale-in that region. It’s not — it’s not really a business as such.
Harsh Shah
Yeah. Got it, got it. And just one more on a structural basis, we’ve entered this packaging to creative offset. Now we also have this agreement in-place with as well for pizza boxes on — what do you think in terms of segments or white spaces where a categories where we still have a scope to kind of grow and make it big, let’s say, from a three to five-year perspective, is pharma something you’re looking at or something of that sort, if you could throw some light on what — what is the thought process there?
Akshay Kanoria
And the number of opportunities in-hand at any given time are very large market. You know everyone is crying that India market is not growing, which is true. And it does add pressure because the competition, which is not as innovative or nimble as us, they may be just looking to copy our mainstream products and do it at a lower-price. So with that in mind, we constantly try to do something new and then hope that grows into a substantial part of the business. Business the challenge is to pick and choose what is not a drag on your time or not a drag on your efforts and on capital.
So there’s a lot of opportunities there’s merger and acquisition opportunities are coming on our doorstep every other day, but then it has to pass muster either in terms of valuation or asset quality or management quality. So most of the things sort of die over there only. And then we have a lot of other inorganic, you know expansion opportunities, new technology, new products. We are constantly working as a — nothing specific I would like to pinpoint until we have something really specific to tell you, I mean or rather more concrete to tell you. But we are always working on new opportunities.
So obviously there should be either something very promising in terms of the growth or it should be very synergistic to our existing business. One of these two things has to be there and it has to fulfill our basic criteria that it gives us a high double-digit return on our capital. So these criteria are there and we are always evaluating, but we are very conservative. We don’t have any target that we have to grow every year at certain rate, we want to sort of steward the capital very responsibly and yeah, so that’s why — and also we have to be cognizant of our bandwidth that’s not getting stretched. So I mean, I’m trying to give you a flavor for how we think, but
Harsh Shah
Yeah, got it, got it. That’s very helpful. And just one last question. In terms of our exports, right, what would be, let’s a ballpark difference between our landed cost in that country versus manufacturing in their own country?
Akshay Kanoria
Meaning how — are we cheaper than the local manufacturers that would be asking?
Harsh Shah
Yeah. Yeah, yeah. Yes, yes, yes. And how much ballpark cost?
Akshay Kanoria
How much and all now obviously that customer will always say you are more expensive. But end-of-the day, they’re giving me the order, so I don’t know-how much and it depends job to job, customer-to-customer region-to-region. But obviously if we’re getting the orders because they are seeing the — you know the difference and — but I would just like to say that it’s not price-led as such. It price is an enabling factor, but if your business is purely price-led, it’s not sustainable. We have over years of effort, developed a good reputation and developed a reliability in terms of quality as well as service.
Even in the COVID time when there was no material in the market, our lead-time landed to customers overseas was lesser than their local suppliers because we had better raw-material availability here. That also I think stays and registers in the customer’s mind. So even if on a particular quarter because of some sea freight or some differential in the paperboard or some other input pricing, even if we are slightly more expensive still customers know in the long-term they find us to be reliable and of course, there’s the quality service, all of these aspects which are intangible. So our market is not like very price-driven but of course you have to be very competitive otherwise why would anyone import.
Harsh Shah
Correct. Got it. And what would be our top three geographies for us in exports?
Akshay Kanoria
So again, I don’t want to get into specifics, but we are exporting to Europe, Middle-East, we are exporting to Africa, now USA, North-America has also been added. We are exporting even to Southeast Asia, we are exporting to our neighboring countries. So I don’t want to get into specifics here.
Harsh Shah
Yeah. The previous question was again in that business that you know. So even when we export to North-America, the landed cost is, I mean would be cheaper compared to, let’s say, the local, let’s say local or let’s say some local manufacturing, right, or said, it’s not more about the price, it’s more about the relations and the quality and terms.
Akshay Kanoria
Yeah, a bit of investing including freight.
Harsh Shah
Yeah, okay. All you.
Akshay Kanoria
Thank you.
Operator
Thank you. Next question is from the line of from Monarch PMS. Please go-ahead.
Shaukat Ali
Hello. Thank you for the opportunity. Hi, Akshay. I wanted you to share a little more light on this arrangement with Ventit. So how we are going to benefit? Are we going to share some royalty pace, some royalty on the technology that we are derising from them or are we setting up some JV through which we will be delivering these products?
Akshay Kanoria
So it’s a manufacturing partnership agreement. There’s no shareholding you know anything. They are a small and closely held company and they are basically working in a very small-scale right now, servicing some of these premium outlets in Bombay, Delhi, Goa, Bangalore and for them to scale-up and service these larger national food delivery chains was a very daunting task and was not really feasible and it was crimping their growth opportunity because they can’t feasibly go to one of these chains and tell them buy from me because they don’t have the capability to produce.
So with that in mind, they came to us and we got along very well and we’ve been working together in an informal way for a few months. So now that some business has materialized, we are — we have made this agreement and we will be — we will be basically either selling to them and then they sell to customer or we will sell directly to the customer and they will get some royalty.
Shaukat Ali
Got it. So for that, we will be using the existing manufacturing resources, our own resources? Yeah, yeah. So we may have to earmark some capital.
Akshay Kanoria
Oh, no capital or to be only working capital, that’s it.
Shaukat Ali
Sure, sure. Thank you. That’s all from my side.
Operator
Thank you. Next question is from the line of Rohan from Research. Please go-ahead.
Rohan Kale
Hi, Aksh and team. Congrats on a strong set. So just further on the previous question from the previous participant. So you had mentioned that they already serviced some chains in Mumbai, Delhi and Bangalore. So is it safe to assume that the — now with respect to our agreement, will we also be serving these chains or will we incrementally be targeting new clients here? And second part to that is, would the sales effort be solely from their end or would we also be a part of that.
Akshay Kanoria
Without getting into too much specifics we’ll do what makes sense for somebody like us to do and they will continue doing what makes sense for their scale of business to do. You know, like very small chains and all, we may not service so well. So we don’t want to mess up his business, but got it. And he can’t do very large-scale. So it’s a good sort of marriage of convenience. And the sales is obviously to begin with, with they are making the main effort, but we are also now gearing up and trying to contribute.
Rohan Kale
Got it. And just a second question. In terms of our packaging products that we make both folding as well as flexible, do you have some kind of sense on, let’s say, how much of our end-products go into the quick commerce channel? If yes, what would that growth have been for us and what would be the contribution there?
Akshay Kanoria
No, we — it’s very difficult for us to know because as far as we know, the artworks and the product grammage and those kind of things are like totally the same. So we wouldn’t know. You know there have been one, two customers recently who have been changing product format and pack sizes to be suited for quick commerce. So they are like selling like a 20 gram, maybe they’re selling a 15 gram, but we don’t really necessarily know that. That’s something they just tell us in. It’s not something which we it’s not our business, right, because we are making as per the customers requirement. So and these customers have so many formats now that they have to plan for this e-com,, modern trade, general trade. So it’s difficult for us to tell really.
Rohan Kale
Got it. Just a last one from my side. One is on the pharma packaging side, how has things been panning out? And two, last couple of years, there was a little bit of a decartonization on the liquor side. Has there been some kind of revival of any sorts in that segment or are we incrementally using that field of capacity now to cater to like the other SMG companies.
Akshay Kanoria
So on the pharma, we are a very small player in this field. We mostly service OTC like the branded sort of pharma where you can recall the name of the product like a pain relief for a gas relief or those sort of things where someone says uses the name of the brand and then there’s a recall. So those are the kind of products that we are servicing because those are more FMCG in nature than the prescription medication. The prescription medication is a field which we are not very big in because it requires some level of specialization and sort of dedication of time and resource, which we have not managed to do. So this is something which is a good prospect for us in the long-term, but we’re not really strong in it today.
As far as the liquor is concerned, before that, and as far as the OTC part is concerned, yes, that’s growing and we’re quite optimistic and there is a good offtake and customers are really appreciating the better-quality and a better sort of print finish and things that we are offering. So there is a growth there. As far as the liquor is concerned, the decartonization has not really reversed, but brands are launching new offer packs and launch like rebrandings and all with the carton, but 90% of the volume has sort of gone from that segment. So we have made-up for that loss with new customer development, increasing share in existing customers. So if this liquor decarbonization hadn’t happened, then of course, we would — our growth would have been much better, but it’s a reality.
Rohan Kale
Got it. Okay. Thank you. Thank you for your detailed answers and wishing you all the best of luck.
Akshay Kanoria
Thank you.
Operator
Thank you. Next question is from the line of Kushan from Research. Please go-ahead.
Unidentified Participant
Yeah, thanks for the opportunity. I was just looking at your asset turnover, you know fixed asset turnover ratio over the last five years, maybe slightly more time, you have consistently increased that from ranging to about below two times now roughly 2.5, 3 times. So just wanted to get some understanding whether the new capex is which we have done over the last two, three years, have they yielded better fixed asset turnovers at same margins or how do you think about this?
Akshay Kanoria
So we’ve not done any much greenfield in the last couple of years. It’s been mostly brownfield expansion of existing units. So for us to pinpoint on exactly whether it is that capex that’s panned out or like the earlier machine is getting more utilized is a little difficult. But I would say pre-COVID, the utilization in general or even during COVID, our utilization in general was a little bit on the lower side. That has corrected in the last couple of quarters. Last, I don’t know, two, three years, I would say, our overall utilization has improved. So I suppose that has had an impact on the asset turn., I — overall utilization has improved. So hope to continue this happy trend.
Unidentified Participant
Can you just throw some light on the utilization levels currently and during the time of COVID, maybe you give out a capacity utilization percent number.
Akshay Kanoria
COVID, no point giving you because there were so many waves up-and-down that the utilization kept swinging. In the first-quarter of COVID, it was like 30% utilization or something for a few months. And then it swung to 80% because the customer started restocking and then it again dipped because they weren’t able to sell what they were restocking, then you had Delta, again it dipped, then again there was restocking. So there was too much fluctuation in the COVID time. I think let’s forget COVID for a few minutes. But if we look at the company as a whole, we are at 80% plus right now. And wherever we are year back, it’s a bit difficult. I don’t have that data with me, but off-hand slightly lower. Yeah. We’ve added capacity also that has happily gotten utilized.
Unidentified Participant
Fair enough. Thank you.
Akshay Kanoria
Yeah.
Operator
Thank you. Next question is from the line of Pulkit Singhal from Dalmus Capital. Please go-ahead.
Pulkit Singhal
Yeah. Hi, Akshay and team and congrats on a good set of numbers. My first question is on your thought process of evaluating various opportunities that are coming up. Just trying to understand what’s the lens or the rationale behind them as in, you have expanded into flexibles, into mobile packaging and also into innofilms and I would presume you have enough opportunity to use the same capital within existing businesses as well. So how do you think about these various opportunities, where to deploy capital and where not?
Akshay Kanoria
Yeah, fair. So it is a bit of gut feel, but look, like for example, we put the factory in Chennai, that is car core business, right, mono carving business. So we are very clear that business we can’t jeopardize in the pursuit of new opportunities of growth or new avenues of growth. We don’t want to cannibalize or rather distract from our core segment.
So if that is a worry with investors, I would like to state that is a worry with us also and we don’t want to jeopardize our core. So that we will continue to grow and we will continue to invest. Now the growth rate in the core segment has come down because the consumer segment itself is a little sluggish last few years but India in general there is so many opportunities. There are so many new segments, there are so many export-oriented sectors that are coming up in the economy. So we try to find ways to participate in that growth.
And as I, you know, sort of spoke about earlier on the earlier person’s question, we are looking at either something which has a good future growth prospect or which is synergistic to our existing business, one of the two. So ideally something consumer-based consumer industry oriented and not too far away from something we understand or there should be some very significant upside in terms of growth potential. Now everything you do doesn’t always pan-out, but one has to keep trying.
Pulkit Singhal
Understood. And from a return on capital perspective, these are — I mean, our company itself is at 20% odd now. So these would be more accretive to that or generally you find them at the similar levels or even lower
Akshay Kanoria
So similar level only, not lower. We don’t want to go — we don’t want to reduce our return, but if you know, there’s not so many businesses in the world which have returned more than 30% or something. So it’s not easy to find that kind of opportunity, but we are looking always. So we hope to do always better only, but we have a minimum threshold that at least it should theoretically get us a return of above 20% on our capital. So if there’s no way it can get that, then why to invest, then we’d rather return that money to shareholders.
Pulkit Singhal
Understood. And in the pursuit of these opportunities, are you largely looking to fund them through internal accruals or are you even looking to consider external capital if required.
Akshay Kanoria
Far, we have managed without and we would always prefer to manage without, but it depends on the timing of said opportunity or opportunities, like if there’s more than one that’s coming at the same time, then it depends. Do we want to let the opportunity go? Are we happy to have a partner for that? But till-date, we’ve never had any external funding for particular projects. So something new for us, but depends on the opportunity.
Pulkit Singhal
Understood. On the margin profile front, I mean, last three years and I’m including the Nine-Month of this year, we have done roughly around 16% kind of EBITDA margins. Prior to that, three years were more like 14%, 14.5%. Now when we look at the next three years, and I understand it’s a function of product mix, raw-material, but there’s also a function of scale and competitive intensity. So how should we think through this over the next few years? I mean, any sense of whether we are operating almost at the peak or there’s — because the latest quarter is 14.7% and it kind of becomes a bit hard to understand how to think through this. Should we look at annual numbers or look at the latest quarter while thinking through?
Akshay Kanoria
So answered that question earlier that like let’s not get swayed quarter-to-quarter and look at the overall picture, picture because 1/4 is a little difficult to go by because there’s so many factors, you know like for example, post-Diwali is a bit of a lull in the domestic market and it drags the quarter down or if like suppose there’s some foreign-exchange benefit that we get and that improves the performance. So these kind of things are very quarter-to-quarter to look at it is a little difficult. But overall as a company I can’t really guide for margin, but certainly we don’t see the margins you know, doing anything dramatic and very difficult and there’s so many factors that are at play over here, you know?
Pulkit Singhal
Yeah. Understood. Just last question is on the growth. Even if I adjust the base, you’ve grown at a healthy 20%. You know, I’m just making the base to be INR400 crores. And that itself is quite healthy in a very weak domestic market kind of thing. So that would imply that exports or flexibles either one or both has grown way higher than ’20 for this to happen. So just trying to understand, would you like to call-out some underlying drivers that have suddenly picked-up that you’re seeing in each of these segments that might continue in the future and it is good for us to know or that could be a?
Akshay Kanoria
No, I would not like to point to anything specific, but we are overall happy. There is very little to be unhappy about. In this last quarter, things were quite benign everywhere. So we’re quite happy. Sentiment is good has to continue. I don’t know if at this rate of growth is something we can guide for, but even if this run-rate continues, it’s quite positive, you know.
Pulkit Singhal
Yeah. Absolutely. Great, thank you for answering my questions and all the best.
Akshay Kanoria
Thanks, okay.
Operator
Thank you very much. Ladies and gentlemen, we’ll take that as our last question. I’ll now hand the conference over to the management for closing comments.
Akshay Kanoria
Thank you. I hope we have been able to answer all your questions. Should you need any further clarifications or if you’d like to know more about the company, please feel free-to contact us or CDR India. Thank you again for taking the time to join us on this call. We look-forward with — to interacting with you in the next quarter. Thank you.
Operator
Thank you very much. On behalf of TCPL Packaging Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.