Ladies and gentlemen, good day and welcome to Mold-Tek Packaging Limited's Q4 FY 2026 earnings conference call hosted by Emkay 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajesh Kumar from Emkay Global Financial Services. Thank you, and over to you, Mr. Kumar.
Good afternoon, everyone. I would like to welcome Mr. J. Lakshman Rao, Chairman and Managing Director, and thank him for this opportunity. I shall now hand over the call to him for the opening remarks. Over to you, sir.
Good afternoon, everybody. Thank you very much for participating in our quarterly and yearly earning results conference call. I am very happy to announce good results from Mold-Tek Packaging, with all the units running with better capacity utilization than the past, and especially the consolidation of five units in Hyderabad into two units, that is unit 1 and 10, has improved the overall performance and efficiencies and resulted in a better EBITDA margins. One more notable thing in this quarter is the pharma packaging. It has grown by 37% over the Q4 of last year, and overall growth of the full year is more than 200%, giving us the ability to look for higher numbers going forward.
We are also expanding our product range in pharma and have ideas to add some more lines of activity in pharma, which can take the Mold-Tek into a decent major player in this segment. Going forward, the paints business, especially in the paint side, has marked a double-digit growth this year. That is one of the reasons for closing the year at around 13% sales growth, 13.4%. Though there is a disappointing trend in lubes segment, it was well offset by more than 15% growth in food and FMCG and Q-Pack's 25%, and of course, pharma 200%, and overall resulting in a healthy 13.4% growth. I would rather like to share more details across question and answers. I hand over to the operator to start the question- and- answer session.
Thank you very much. We will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. Participants, you may press star and one to ask a question. The first question is from the line of Sanmat Jain from Kamaya Kya Wealth Management. Please go ahead.
Hi, am I audible?
Yes, sir, your voice is coming muffled. Can you speak through the handset, please?
Yeah. Is it okay now?
Yes, sir. Slightly better.
Yeah. Thank you for the opportunity. I have a question regarding your collaboration with Vibe. Was there any revenue contribution from this contract in Q4?
Yeah. I already mentioned during my previous conf call that this is a long-term opportunity where we are working with Vibe on development of new set of products, especially closures for high-end chemicals and lubricants. Now out of three products they have given us the designs, two products pilot molds are ready, but these molds to become commercial and add revenues, it would certainly take two or three more quarters. The numbers will start adding probably towards the end of this financial year, 2026-2027. Vibe as of now is under developmental stage, but the products which were coming out, two out of three are already successful in pilot trials, and more and more visibility would only come after a couple of quarters.
Okay. You gave us the guidance of 55,000 - 60,000 pharma for FY 2027. Is this including this contract revenue, or will it be incremental to this?
INR 55 crores is our target for the next financial year, 2026-2027. We hit INR 35, almost INR 34.4 crores for the current financial year. We have taken a 50% growth, so to reach somewhere around close to between INR 50 and INR 55 crores for the pharma. We are online with that, I hope.
Okay. Thank you. That is it from my side.
Thank you. Next question is from the line of Richa from Equitymaster. Please go ahead.
Hi, am I audible?
Yes.
Yeah, thank you for the opportunity, sir. Sir, could you break down the growth in the paint segment volumes with Grasim and without Grasim?
With Grasim and without Grasim, I do not have the figures readily available. Grasim has contributed handsomely to the growth of paint because they have been the kind of new players and their numbers are expanding more rapidly. So the volume also has shot up by more than 60% in ABG compared to the last year, because last year base was much smaller. Currently, their numbers are improving month after month or quarter after quarter. They are contributing handsomely, and they are in the top 10 customer for us.
Okay, but sir, a few quarters ago, there was a lot of competition coming in for Asian Paints, and we had some kind of weakness in volumes there. Has that stabilized?
Yes. Rather, we have a very healthy growth in this quarter. We have more than 17% growth coming from Asian Paints in Q4 to Q4. That is a very healthy recovery for us from Asian Paints.
Okay. S ir, will you also elaborate on why such a sharp decline in the lubricant segment? I am not sure how that is vis-à-vis industry, but normally the industry growth tends to be between - 2% to + 2%. This seems to be a sharper decline. Are we losing clients or market share there?
Yes. We lost a client, BPCL, towards the end of last financial year, which used to contribute about a significant amount of sale, but due to tendering system and public sector, they go only by L1 basis. We couldn't match their pricing, and we let it go. One of the reasons why last four quarters we still have a loss in sale. Last year itself, it was more than INR 14 crore-INR 15 crore turnover has come from BPCL. That has gone off in this full year.
Okay-
That is one of the main reasons for the drop in lube sales.
Okay. S ir, capacity-wise, how much additional capacity are we targeting for Grasim and in pharma as well? We have some capacity CapEx planned in that segment.
Yeah. Currently, pharma is hardly about 1,500 tons, and we have to still make new investments in that segment to take it up to 2,500 tons in this year. Grasim, already we have capacities created more than 12,000 tons. 5,000 at Panipat, 4,400 at Cheyyar, and about 2,500 at Mahad, that is through Satara. So total 12,000 tons of capacity has been created, which is running around 65% capacity as of now. Utilization as of now, which was better than last year, which was in 50s. This is one of the reasons for better performance is those plants are running now at least around 60%-65% range of capacity utilization. As we go forward and as their demand also picks up, their plant capacity utilization will also improve there.
Okay. Sir, one month has already passed in first quarter, and do you have any sense of how our Sintex sales could look like? Given what is the impact on ice cream sales, are you witnessing the growth this quarter?
Yeah, I can't comment much about this quarter, but April has been pretty strong, and we have seen all around momentum in spite of the West Asia war, which has impacted the general sentiment. T he consumption of such goods like ice creams or curds, they won't get impacted because they're not luxury goods. Even in the case of paint, we see a strong momentum still continuing even in the month of April.
Okay. Thank you so much. I'll come back to you.
Yeah.
Thank you. Next question is from the line of Chirag from Keynote Capitals. Please go ahead.
Yes.
Chirag, can you please speak through the handset?
Hello, am I audible now?
Yeah.
Thank you.
Yes. Congratulations, Lakshman, for a great set of numbers. My first question is related to understanding from [Linus] talking about the capacity expansion. From 63,000 MTPA currently, what are we looking at for next year? Because we are already reaching a rate of 70% capacity utilization now.
Yeah. Capacity is 63,000 tons and utilization is hardly 43,000. So we have a long way to go to make use of this capacity. Some more machines which were ordered last year are on the way, arriving in this year because there will be always some replacement of old machinery and also expanding marginally in especially units like Mysore and Satara, Mahad especially. These are areas of growth. Pharma will continue to add machinery to meet the increasing demand for our products. So these three areas. W e have a sharp lesser budget of capital investment in this current financial year, which was INR 140 crores two years ago for two consecutive years and INR 120 crores in this financial year of 2025, 2026. We hope to control this CapEx to INR 80 crores-INR 85 crores in the next year. That is 2026, 2027.
As we will be going only for brownfield expansions now onwards.
Got it. That will lead to almost 70,000 MTPA capacity by the end of FY 2027. Is my assumption correct?
Yeah. I think we should be close to 68,000, 67,000 because capacity-wise in pharma, the number of tons won't be too many. It may be 1,000, 1,200 tons. Brownfield expansions are only in places at Mysore and Satara. Satara, basically, that is Mahad plant supply. These are the two areas. The rest of the plants we see. Of course, north plant, Panipat, where we are adding Thinwall capacities. Four machines are coming in this July. By end of this financial year, that is 2026, 2027, probably we'll be somewhere around 67,000, 68,000, maybe close to 70,000 tons.
Got it. Sir, my second question is, generally, whenever there is significant raw material prices fluctuation taking place, the players who work on low margin packaging industries face a lot of headwinds. At that time, clients tends to shift to different players in the industry. We just wanted to understand this current situation which is going on due to war. Has this led to some older clients who went away from us or some new clients adding to our portfolio?
On the contrary to your expectation, in fact, we are finding our clients coming back in hordes.
Right.
Because they are worried about the connectivity, material procurement abilities, and ability to quickly react to the international scenario. We noticed the jump in call-ups from even old clients like Berger and Nerolac, who used to give us only a few grades, have now increased their call-ups in fear, I would say, rather, not fear of supply chain disruptions in smaller companies. They are coming back to us in terms of increasing numbers. Also we need to notice the bond between us and the clients has become stronger due to the external environment being fragile. We are, in fact, finding some of them coming back to us, and dependence on companies like Mold-Tek Packaging is going to go up because, of course, I don't take it as an advantage, but our scenario is such that materials, sometime in March especially, has become very difficult to procure.
Due to our long-term relation with Reliance and our other suppliers in IOCL and HMEL, we could able to get the necessary material in time.
Got it. S ir, would it be fair to assume, though you have mentioned previously that all the cost increase we are able to pass on, I just wanted to know the current scenario. Will it be fair to assume that we would be able to maintain the 46%-47% gross margin levels in the coming quarters, too?
Certainly. We have passed on the entire price rise to the clients across the segments, and they also appreciated the ground realities, and even some of them have reduced the period of raw material fluctuation. That means earlier they used to be quarterly. Now they come down to a monthly or even sometimes fortnightly correction. So that way, even when the prices come down, we, too, will have to pass on the reduction to them. It's a fair game. I'm very thankful to all our clients.
Majority of them have accepted the price rise rapidly because the price movement in March was so rapid. From INR 105 in the beginning, it went up to INR 160, and now currently hovering around INR 145, INR 150. So we are, in this kind of a scenario, found our clients very much with us, and I think we can still continue to maintain our profit margins.
Good to hear that, sir. Sir, from the perspective of capital allocation, as you said that this year we would be focusing less on spending or increasing our capacity. Will it be fair to assume that the additional INR 40, 50 crore that we are earning is going to be used for repayment of debt?
Implementation of?
Repayment of debt. Because of the capacity expansion, we have taken certain debt on board.
Yeah. Debt payment will happen from the cash accruals. N ext year, you are talking about next year capital asset allocation budget?
For FY 2027. Yeah. For FY 2027. Yes, sir.
Yeah. We are planning, it will be in the region of around INR 80 crores to INR 85 crores overall. It could be mostly from internal accruals, a little bit here and there debt, if required.
Debt will be required.
Cash generation will be much more than INR 80 crores. This year itself-
Okay.
If you look at the cash generation, it is around 72 plus 59, INR 123 crores. We might have given a dividend of around INR 20 crores. So still, INR 100 crores is our net cash accruals. So we will be-
Correct
able to catch up with that within our requirement for next year. The cash flow is-
I wouldn't require any additional debt for the capacity. I'm just understanding that-
Yeah.
Got it.
It could be temporary in nature, but overall, I don't expect debt to increase.
Got it. Just one last question, and I'll join back the queue. There is one accounting understanding I want to take. This particular quarter, we have significant jump in other expenses. Could you just highlight what is the reason behind that?
Other expenses?
Yes, sir.
Yeah. Some of the reasons could be we have taken up a severe preventive maintenance and change of screws and some other parts in the machines to suit to the RCP addition. Because now recycled plastic has become a mandatory. 30% is mandatory now, and it's going to be 40% from next April. The machines which are equipped with ordinary screws are not able to process such mix. We have gone for better, technically stronger screw material and screw systems. Those corrections we have done in this quarter to a reasonable extent. This is a one-time expansion in the maintenance cost that is preventive in nature, but it's been taken in the P&L.
And this mandatory requirement of RCP is just related to the paint and lube segment, right?
Currently, yes. Pharma and food are exempted from this, but paint, lube constitute a majority of our sales in terms of volume. That's why we need to be ready with-
Right
machines that are suitably altered.
Thank you so much, sir. I'll join back with you.
Yeah.
Thank you. Next question is from the line of Sandeep Modi, an individual investor. Please go ahead.
Yeah, sir. I am audible now?
Yeah. Sure.
Yeah, sir. First of all, congratulations to the management for increasing the stake from 33.07% to 33.19%.
Okay.
And sir, one more thing. How many pharma companies have visited our premises? Any good news about pharma business, status of new product, et cetera?
Sandeep, you should be very happy to note that in the year one itself, or I would say year one of full operations, we've grown by 210% compared to the last year.
Okay.
From INR 11.5 crores to almost INR 34 crores. So INR 10.7 to INR 34.3. So that is a 219% increase in pharma sales. Of course, it is a small base, so I would still take it as a good jump given the competitive environment in pharma packaging. Because of our good product range and ability to develop new packs faster, we are able to entrance into this field and quickly become a name in the industry. So we have now again taken a 50% increase as our target for this current year. So to reach somewhere around INR 52, INR 55 crores for the next financial year. Several clients are visiting our units. I lost count. S everal of them are at different stages.
Some of them are buying commercially, some of them are in line trials, some of them are establishing our packs, like that. S ome two, three new products, different cap systems are being introduced. As I said, we are also looking at ophthalmic and nasal sprays and also a couple of other products, which I can't delve today because it's in the nascent stage of discussion. B e assured, we'll be widening our product range year after year and getting more and more deep into the pharma sector in the coming years.
Yes. Anyway, sir, how many new products are in process now? Molds are in process in pharma?
Now, molds means I can't just give you a count. It could be five or 10 molds at any given time. It may be new bottles, new sizes, same sizes with different weights. So like that, different cores and different cavities may be changed or entirely new set of products are being developed. So at any given time, you can say there will be five to 10 products every quarter.
Okay. Yeah, sir, one more thing. No margin available in exchange for Mold-Tek Packaging shares. Can you give some details about this?
Oh, I don't know much about the stock exchange and their rules.
First, we were pledging the shares, and we were getting margin on it. Now the exchange has suddenly stopped.
Okay.
Sir, please look into the matter and just go through.
Yeah.
Sir, what is the status of land which we have bought? Any expansion going on there?
Yeah. The land has been just acquired, but they are yet to hand over the land because of various bureaucratic things. The land is earmarked now. The road in front of the land is being laid now, because it is in front of our unit in Sultanpur. We definitely notice it every day. Probably in this month, we should be able to get the position or agreement, and then we will be able to start commercial construction. That is one of the reasons why the construction activity also could not be started.
Yeah. So there was a pharma packaging we are trying to start some new this thing?
Yeah, that new land is mainly meant for pharma alone.
Okay.
Once the land is-
What will be the factory?
handed over, the construction activity will start immediately.
When will that complete, this new factory start over?
I think it will go into commercial production only by beginning of next financial year, I mean, next calendar year. It may take at least eight, nine months to complete the construction once the land is handed over. For various reasons, there is a delay from the industrial estate to hand over the land. We have paid for it more than seven, eight months ago.
Around January 2028, it will be operational fully?
Yes, 2027. Before end of the financial year, I think we may start the new plant because of the delay in land allotment. Otherwise, it would have gone by third quarter of this year.
Okay. Thank you very much, sir. Thanks for the reply.
Thank you. Next question is from line of Dipak Saha from Ashika Institutional Equities. Please go ahead.
Hi, Amari?
Yes.
Hi. Thank you. Thanks for the opportunity, sir. First of all, congratulations on the good set of numbers. Just one bookkeeping question, if you can share the IML and non-IML mix for Q4 and FY 2026.
Yeah. For Q4, it was around 75.5%, and overall year it is 75.5%. So in value terms, it is 76.8%. So almost 77%, you can say, percent is in IML.
Got it, sir. That's helpful. I joined a little bit late. Just pardon me if I missed it. On the paint volume side, we have a very meaningful growth for the quarter. Is there any one-off because I think for Q4, this kind of a paint growth that we are seeing in terms of volume, 26% kind of year-over-year growth after a long time. So if you can just share some color whether it is sustainable going ahead and what led to this kind of a growth.
Oh, 26% volume growth, I didn't say. It is 14.4% in value terms, and 13.5% is the growth in paint segment. That 60%, what I said, is ABG numbers for this particular quarter. ABG compared to the previous year Q4, the ABG numbers have shot up by 60%.
There is no one-off in that, sir?
Sorry?
There is no one-off in these volumes?
Your voice is not clear.
I said there is no one-off in the volume growth that we are seeing. There is no one-off as such?
No. You mean it is a one-off times only? It is not going to recur, you mean?
Yeah. Correct.
No. It has been consistently growing around 40% to 60%. Now it is overall yearly growth. Quarter growth was 60%+ , and overall yearly also it is close to 60%. So every quarter on quarter, a consistent growth. Because they are also maybe acquiring new market share in the paint segment. I think it will continue to be at that level. T he way they are aggressively marketing and aggressively ramping up their production capacities, I think we will certainly be in a strong double digits for next couple of years.
Okay. S ir, FY 2027 full year point of view, how should we understand the growth numbers? If you can broadly give a breakup, because lubricants has been degrowing, paint has now started growing. You said both Asian Paints and other players are growing recently. So if you just lend some color on a full year basis, FY 2027, what kind of a volume growth we should look for and the breakdown of that.
See, I can say two ways of looking at in future, because volume growth comes from mere kgs. Then pharma, even if it grows by 50%, the number of kgs it will add will be less. T he number of rupees or value-wise, it will be much higher, because our average realization pharma is almost double that of other segments. In terms of just volume, it might look like anywhere between 10%-15% of growth is possible. I n terms of value, I am sure we will be clocking between 13%-15% value growth. Like what we did this year, 13.3%. We hope that we will be somewhere between 13%-15% in the value growth in the next financial year. That is why I said in the year 2026-2027, we may cross the INR 1,000 crore mark sales.
Got it, sir. This was really helpful. Thank you and all the best.
Thank you.
Thank you. Next question is from the line of Darshita from DSP Asset Managers. Please go ahead.
Yeah. Thank you for the opportunity. My first question was regarding paints growth. I think the earlier participant mentioned that the paints volume growth has been 26%. I think this is for the fourth quarter. If you could just give us some understanding as to where has this growth come from. I understand you've mentioned that a larger portion of growth has come from ABG. Have Berger and Nerolac also contributed meaningfully to this particular growth because of the raw material unavailability issue?
Berger and Nerolac started only from March. That is the time when the real war erupted and situation becomes agile. Berger and Nerolac growth is hardly for a couple of weeks in March or last 15 days of March. Of course, they were buying from us, but the numbers have improved from March onwards. Asian Paints and ABG were consistently growing. Asian Paints was negative till the third quarter, but in the fourth quarter, it's a good positive rise of 17%, which pulled the overall number into positive for the full year. ABG was a major contributor towards this 14% growth in paint segment.
By hand, somebody adding almost 10% of the growth has come from Asian Paint, I mean, ABG alone. The remaining 4% from Asian Paints and others.
Got it. Secondly, we have mentioned that a larger portion of the raw material price increase has been passed on to the customer. Our volume growth for the fourth quarter is 17% and so is our top-line growth. Ideally, had there been some realization growth as well, which I am assuming would have happened in the month of March, we ideally should have seen a higher value growth because volume and there could be some realization growth as well. Is it safe to assume that a larger portion of the value growth will be seen in the first quarter numbers?
Yeah.
I mean, the realization pass on related growth will be seen in the first quarter.
Yeah, your guess is correct because in the last two weeks of March only we got the price hike because the war erupted on March 1. We have to obviously keep the pricing stable till the middle of March, in some cases the 25th of March. So hardly a week the price is reflective of high price.
You will notice that in Q1 more significantly.
Got it. Because of us taking price hikes, I am assuming that our raw material polypropylene would have gone up by at least 25%, 30%- odd. Have we lost any customers given that we may be revising the price more often than just what we usually do, I am guessing 15 days or one month or so. Have we lost any customers because of that?
You know, all our clients are blue-chip clients in their respective segments, be it ice creams or curds or paints or roofs or food, oils. They cannot afford to reduce their presence in the market. They keep producing their products at the same pace as of today. I don't know how bad it can become worse it can become, but as of now, we don't see any demand downturn in any of our top clients. That's a very reassuring fact which we are also observing. We very rarely, out of our 100%, hardly 4% to 5% or max 6%, 7% of our sales would go to non-blue-chip clients.
Our impact, if any, would happen in those 5%, 6% to the tune of 1%, 2%. While we lose 1%, 2% of such business, our major clients, Asian Paints and ABG or even Hindustan Unilever Limited, they're all going in full guns with their demand increase because it's mainly meant for local consumption. In pharma also the replacement demand. We are replacing others due to our better quality and consistency. That is how we are penetrating in the Indian pharma industry, which is meant for exports.
The penetration is mainly into the replacement demand. T he growing demand for pharma also, you must be noticing that all the sanctions against pharma exports have been completely removed, at least as of now. All the pharma companies are in a full way, they're going forward with their expansion plans. We don't see any impact immediately unless some new sanctions are put on pharma exports. Given this scenario, most of the cases, 98%- 99% of our clients are safe, and they're growing with the domestic growth in demand, which is somewhere around 6% - 8%, you know that.
That way we are safe, a nd because of the replacement demand in pharma and other areas, and more and more IML absorption coming from Asian Paints, we are confident that we'll be able to sustain the growth.
Got it. Sir, on the FMCG or the FNF segment growth, how should we think about it, specifically just the FNF growth from FY 2027, in for the year FY 2027 and more so from the Panipat facility. We had onboarded a few customers. I think we've added a few more customers in Q4. If you could just throw some light on what the capacity utilization for the Panipat plant for FMCG was in Q3 and what was it in Q4, and how do you think about this in FY 2027?
I didn't have perfect numbers, but I can get the feel of that. Q3 was hardly anything because that is the time when we started the Panipat.
Involved production. Q4 started in decent numbers, somewhere around a couple of crores of turnover has come in the month of March.
Alone from Q-Pack and Thin Wall together. The numbers are increasing, and the client number is swelling actually. We have signed recently a couple of big clients who are buying from our other competitors in that area, and that is going to significantly add to the numbers in the next financial year for sure. So food and FMCG from, if you see only Thin Wall, it is 15.4%. If you combine it with Thick Wall also, food is around 18%. T his 15.4%, I'm sure it will be looking at at least 20% growth, in the food and FMCG, including the north numbers for the next financial year.
Got it. If you can just share some light on what is the peak revenue potential from the Panipat facilities that we should think about, and how long will it take first to reach the peak capacity utilization there?
You see, in ABG plant, that is mainly meant for paints and Q-Pack. We are hardly reaching around 60% capacity utilization in Panipat. In Thin Wall, which is hardly four, five months old, we may be around 20%, 25% capacity utilization. There is a long way to go, and we are in fact adding four more machines in July for the Thin Wall. Which will expand the capacity there by another 100%. Capacity utilization next year, even if we reach 50%, that will add handsomely to the numbers. Panipat has a long way to go. The new building is completely ready now, the second building for the food and FMCG. It has four machines, there will be eight from July. Now we are getting ready for the festive season that starts sometime in July, in a month.
I think next year there will be a good jump. I do not think it will go to 80% capacity utilization, but at least from current 20%, it may go up to 40%, 50% on a bigger capacity.
Got it. Just lastly-
Thank you. Ma'am, sorry to interrupt. A final request to please come back.
Sure, no problem.
Thank you. A kind request to all the participants, kindly limit yourself to one question per participant, and rejoin the queue for a follow-up. The next question is from the line of Akhil Parekh from 360 ONE. Please go ahead.
Yeah, thanks for the opportunity and many congratulations, sir, on a very good set of numbers. My first question, on the EBITDA per kg, right, and we have shown good improvement. What should that number look like, say, in FY 2027 and 2028?
FY 2027, as I expected, we are aiming at at least 42-43. 42.5 could be a good estimate for full year. Then how it trends in pharma, in 2028 probably we can aim it around 43-44 range. So definitely, the trend will continue now because two things. It is not just the growth in the different segments, but the consolidation of our operations in Hyderabad, where we reduced five plants to two plants. Now only Annaram and Sultanpur is two units which are producing all the products which were earlier made in five plants. So thereby getting the better efficiencies, overhead reduction, and movement of goods has come down. All this is yielding to better productivity. All this consolidation happened only till January this year. That means until January, February.
The full benefit of this consolidation and improved efficiencies would be reflective in the next financial year. That itself should add INR 1 or so to the already INR 40.7 what we have achieved this year compared to INR 37.6 in the previous year. There is a jump of 8.4% increase in the EBITDA margin, which is a substantial jump, which we lost during the last couple of years, we recovered. Going forward with these efficiencies kicking in and more and more HCL labels also being made in-house, and the new ways of automation which we have taken up in various areas to reduce the manpower dependency, is going to improve the efficiencies going forward. ABG plants even today are hardly around 60% capacity utilization.
I hope next year they will be reaching 70%+, which will be a very good accretive to the bottom line. Going forward with the only brownfield expansions, which will marginally may require capital but increase in the capacity utilization will kick in. I look at very possibly for 2026, 2027, and to aim at least 42.5%-43% range for 2026, 2027. 2027, 2028 may be little difficult to predict now. Maybe we may touch even 45%, given a good win in pharma. If it happens, we may aim at 44%, 45% also for next 2027, 2028. I can give a better picture going forward in the next couple of quarters.
Great, sir. Just reconfirming your growth guidance for 2027, you suggested 10%-15% volume growth and 13%-15% value growth. Did I hear correctly?
Yes. The volume growth-
Okay. That is-
10%-13%. Pharma won't add volumes. It will hardly be in few tons. Even the rupees become up by 50%, volume-wise last year it was hardly how much? 853 tons. Last year it was 853 tons, the next year, 2026, 2027, it will hardly touch 1,200-1,300 kgs. Sorry, tons. 1,200-1,300 tons, even if we achieve a 50% increment. Volume-wise increment might look 10%-13%, but value-wise increment, we are aiming at 13%-15%.
Okay. That implies we should easily cross INR 500 crore of revenue by FY 2028, which was the past guidance, I believe.
I hope so. I'm sure this year we'll be aiming at INR 1,000 crore plus, for sure.
Thank you. Akhil, I request you to come back for a follow-up question, please. Participants, kindly limit yourself to one question per participant. Next question is from the line of Deepak from Sundaram Mutual Fund. Please go ahead.
Yeah, thank you for the opportunity. Am I audible?
Yes.
Sir, my first question was on paint. If I do a small back calculation, even your non-ABG paint volumes for Q4 would have grown at roughly between 13%-15%, which was kind in a declining trend or let's say flattish trend for the first nine months. Just wanted to understand what has changed this quarter, because you did highlight that one change that happened is IML adoption by Asian Paints. Just wanted to understand how sustainable is this double-digit volume growth, non-ABG, which we have seen in Q4, and what is the growth outlook on the volume front for non-ABG clients in FY 2027?
Yes. You said the reason. The IML adoption by Asian Paints in more and more brands is one of the reasons of us getting back their higher volume of business. That I hope will continue because their artworks are very critical. If you notice their paints in the market, they have metallic IML, which is a top-class IML to handle both technically and visually. Visually, it gives an excellent outlook, and technically, it is very complex to handle. I don't think we'll lose that edge in the next couple of years, and we may continue to gain traction with Asian Paints given their commitment, because we are on their commitment. We invested in several new initiatives in printing and even in robotics. They generally very much respect their commitment. I still look at double-digit growth from Asian Paints in the coming years.
Okay, got it. S ir, as you earlier also highlighted that in terms of price hike, because of the steep inflation in polymer prices, we are able to initiate some price hike. Would it be possible to call out how much price hike has been taken versus the steep increase in raw material prices?
Completely offsetting the price increase in raw material. It is not any percentage. Whatever is the price hike, they have passed on in their pricing, and they increase the prices accordingly.
Thank you. Deepak, I request you to come back for a follow-up question. Next question is from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead.
Good evening, sir, and thank you for the opportunity and congratulations. My question is specifically on the paints. If we have reported a 42.1% EBITDA per kg, how the paint EBITDA has moved over year-over-year?
See, I always tell you paints, EBITDA paints and square packs EBITDA is in the region of INR 30 -INR 35 per kg. What pulls it up is food and FMCG and pharma overall average. I have no detailed discussion. I mean, EBITDA tonnage of each segment, but it will lie in the region of INR 30 -INR 35.
The reason I am asking, as you said that we have passed on the price increases. Will this EBITDA per kg, despite ABG growing upward of 60%, show the upward trajectory in FY 2027, or will it remain in the same range?
It will definitely remain positive for all the clients, especially ABG in particular. Because ABG, we are now establishing Mahad during the current year, and the numbers will keep improving handsomely. Next year also, we look forward to a strong growth in the paint segment.
Okay. On the last question on the food and FMCG, I think the mix as the new clients are coming, and you have given the existing client is also expanding their business. How we should look at the food FMCG and in terms of the number of clients which we have added. Is this number going to exceed FY 2026 or will remain similar level or in terms of growth and in terms of margin, if you can give some qualitative comments.
Definitely. I am very confident that more and more number of clients will be added in 2026, 2027 than last year. Basically, because our north plant has started operations from October, November, and slowly there is a traction that is being created. As I said, in the month of March, we have made some sales worth around INR 3.5 crore for both the Q-Pack and Food together, which was zero last year. Going forward, that itself is indication that INR 35 crore to INR 40 crore of new addition in business can come from north in Q-Pack and Food together. So that is still less than 50% capacity utilization, but will be a handsome number new addition. In my opinion, 2026, 2027 will have many more client additions in food and FMCG from the north compared to overall year 2025, 2026.
Thank you. Shirish, I request you to come back for a follow-up question. Next question is from the line of Raj from [audio distortion] Asset Management. Please go ahead.
Yeah. Thank you for the opportunity. My question again is on the volume growth that you have highlighted for 2026, 2027 of around 13% - 15%. So, if we are saying that ABG should grow at around double digits plus, sorry, Asian Paints should grow at double digits and ABG is growing much faster for us. Plus food and FMCG, I think the volumes are growing at 20% - 25%. So I just wanted to understand where is the disconnect? If that kind of growth we are able to see, then FY 2027 ideally should be much better for us in terms of volumes. So just wanted to understand.
No, I said the volumes are not 10% - 15%. I said 10% - 13% volume increase because the pharma numbers will be less in tons. I said 13% - 15% for the value, in terms of value. Having said that, lubes is one area where we do not see any major increase in even the next couple of years because it is a stagnating market. The industry itself is not growing. It is growing only in single digits, sometimes not even there. So there, we have substantial 17%, 18% of our turnover comes from that segment. So that segment, I am not anticipating any major growth. A couple of points of growth may come in Castrol. I do not foresee a lube will be pulling us up.
What pulls us up is Asian Paints and ABG, as you correctly said, because Asian Paints growth even in this full year, if you take, though it is 17% in the Q4, full year it is hardly around 3%-3.5%. So that 3.5% becoming 10% will be a good value add for us in the year 2026, 2027, we foresee for that. L ube being a laggard, that is why we are aiming between 10%-13% volume growth.
Understood. S ir, steady state, I mean, ex of the increase in raw material prices, the realizations for Asian Paints has been flattish, but now with Asian Paints also increasing their IML consumption, plus we are now at a different scale for ABG as well. So do we see realizations improving or our pricing power improving because of IML in paints, ex of the price increase that we take because of raw material inflation?
Yes. That is why I am positive about the EBITDA growth from 40.7%, which we achieved this year, to 42.5% level. It could be little better. Let us see how the war and the other economic things play around.
Thank you. Raj, I will request to come back for a follow-up question. Next question is from the line of Parth Gohil from Omkara. Please go ahead.
Congratulations to the team and the entire management for the performance. My question is pertaining to the lubricants segment. Do we further foresee or anticipate any loss of volume in coming quarters, or we can say that it has normalized at this level?
Yeah, I think you have a very smart question. In fact, I am also thinking it will stay there because we have no more public sector units to lose. All the private sector companies value our relation and our quality, and the consistency, which is very important. I am not saying it is not for public sector, but public sector has more valuation for pricing than anything else, and it is their policy. Having lost all the PSU business now, we may sustain at the current levels in lubes.
Okay. Thank you, sir.
Thank you. A request to all the participants, kindly limit yourself to one question per participant. Next follow-up question is from the line of Chirag from Keynote Capitals. Please go ahead.
Thank you for the opportunity again. Sir, just wanted to understand your view related to the ROCE for the company. We used to be a company where we were generating 20% as ROCE. Is our target staying back? Secondly, wanted to understand, our working capital days are getting stretched. What is your outlook on that?
Working capital stretch is basically you are looking at a higher valuation also because, the last three weeks we have been purchasing material at higher price, and that has indirectly might have impacted the value to look higher. Inventory days also have become little longer because in pharma, one has to keep three months material ready because sudden requirements generally come up in batch quantities for pharma. Their pickup times are little late and the payment terms are also longer. Pharma industry has been following a 90 day to 110 days payment cycle. That's why you might notice that debtor days and inventory days are stretched a bit.
Coming back to ROCE, yes, the ROCE has leaped by about 14%, from 10.2% to 12.4%, and probably it may hit around 13.5% to 14% in the next financial year. It was 17%, 18% two, three years ago, I agree. That was when all these greenfield projects have been started. Investments have shot up in the last three years. These investments start yielding now. This year, I would say they crossed 50% to 60% capacity utilization. N ext year onwards, I am confident it will be 70% + and they will be yielding to the bottom line. So probably the ROCE will start looking at around 15% by 2027, 2028.
Thank you. Next follow-up question is from the line of Darshita from DSP Asset Managers. Please go ahead. Darshita, may I request you unmute your line and proceed with your question?
Yeah, sorry. I hope I'm audible now.
Yes, ma'am.
Yeah. Thank you for the opportunity again. Sir, could you just tell us what will the total capacity be for FMCG once the four more units come in at the Panipat facility?
Currently, I think it is about 1,200 tons or 1,000 tons. It will become 2,000 tons food and FMCG there. Q-Pack also we're adding a little bit. So it'll become 2,000 to 2,500 tons per annum, including Q-Pack.
Secondly, just on the raw material availability perspective, are we facing any issues currently for polypropylene supplies? For how long are we covered at this point?
No, we are well covered for almost two months. That is what is shown in inventory days. So we have that coverage of two months, which is there in physical form also. Material availability has improved because Reliance has started its production on a regular basis from middle of March, and they are indicating and assuring us that there won't be any shortfall. 1 or 2 grades, especially in pharma, are on little short supply. That is where we are concentrating.
Okay.
Thank you. Darshita, kindly come back for a follow-up. Next question is on the line of Sanskar from Eraya Capital. Please go ahead.
Hello. Yeah, sir, most of my questions have been answered. Just wanted to understand on the growth perspective, while you have answered on volume and value terms, just wanted to get that you have guided going forward on maintaining around 20% growth in terms of profitability at EBITDA and PAT level. So are you maintaining that or is there any upward or downward revision from that point?
I think we will certainly be there. We are aiming at least INR 210 crores EBITDA for next financial year, up from INR 173. That is a 20% rise. I think we are definitely going to achieve that in view of not only the increasing business but our internal improvisations and efficiency creation, what we are bringing through the consolidation of units. If things go well, nothing further damage happens through this war, we should be looking better than that expected EBITDA.
Okay. Thank you.
Thank you. Next question is from the line of Deepak from Sundaram Mutual Fund. Please go ahead.
Yeah. Thank you for the follow-up opportunity. Sir, I just had one question on Thinwall. If I look at our growth rates, quarter-over-quarter, we have done 44%+, and even year-over-year, it is a very good number at 30%, which was around 13% - 15% in the first nine months. Just wanted to understand, let us say if I have to break down this growth between, let us say your other plants and Panipat, and how much of this growth is driven by, let us say, new SKU addition or new client addition. Just wanted to have some flavor on the growth breakup of what is leading to such a high growth number and how much of that is sustainable going forward.
In Q-Pack?
In Thinwalls.
In Thinwall. See, the number is not 30%, it is 15.4% in value terms, 18% if you include the bulk food packs. So 18% is our number, what we achieved in the year 2026, 2027. W hy my conference says it can be better is because of our Panipat additional capacities are getting created and several new client inquiries have been received in that area, Northern region. W e have started adding clients who have started buying from March onwards are decent numbers. Going forward, definitely they'll appreciate the quality and supply service abilities of Mold-Tek, which they have not seen because of our distance in the last few years. Now with our presence in Panipat, I'm sure we'll be able to add a lot many clients in that region, which will contribute to the increased growth in food and FMCG.
Okay, b ut what about the existing clients? Are we seeing any growth there or is that majority of the growth is coming only from this Panipat side?
No. All our clients are growing. You take Milky Mist, you take Hatsun, you look at Walko or Kwality Wall's. Their numbers are all going up. On the ice cream or yogurts, whatever products they sell, the numbers are all going up. Only Mondelez India Foods Limited, M2K Group is stagnant. F or that, all top brands are growing in double digits. So that growth will definitely accrue to us. Apart from that, how we can go beyond that is what I am explaining, is through Panipat.
Okay. Helpful, sir. All the best.
Thank you.
Thank you. As there are no further questions, I will now hand the conference over to the management for closing comments.
I thank you all for showing your interest and spending time to attend the conference call today. I especially thank Rajesh Kumar of Emkay for arranging this call and the operator who has patiently conducted the call in a courteous manner. I also appreciate people's interest in our company, and be assured that we are on a good track. More and more product range also we are looking at, which are not very clearly on the drawing board now. It will happen during the next three, four quarters in pharma, especially. We are also looking at efficiencies to improve cost controls. Now we have created teams of finance and HR admin at all the units who will be directly monitoring and controlling the cost elements closely.
With this new kind of managerial outlook and consolidation of units, I think we are on a strong wicket to perform better in the coming quarters. I also hope peace will prevail soon and all the economies, and especially our Indian economy, will catch up with the speed which it is about to reach. Thank you all once again, and bye bye. Good evening.
Thank you very much, sir. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.