Thank you, Atharv. I am pleased to host today's earning call of Ganesha Ecosphere.

From the management, we have Mr. Gopal Agarwal, CFO; Mr.

Prashant Khandelwal, Senior Vice President; and Mr. Yash Sharma, Director, Ganesha Ecopet on the call.

Without any delay, I would like to invite Mr. Yash Sharma to start with opening comment, post which we will move to Q&A.

Thank you, and over to you, Yash.

Thanks a lot, Manish, and good afternoon to everyone, and we welcome you to our earnings conference call for the first quarter of FY27. We would like to take you through our Q1 FY27 numbers along with the key developments of our company.

The first quarter of FY27 has been marked by a complex and rapidly evolving market environment. The global geopolitical developments, particularly the tensions in the Middle East, resulted in a heightened volatility in the crude oil prices as well as the downstream polymer markets.

This has had a significant impact on the broader polyester value chain, affecting the demand patterns, the pricing dynamics, as well as the customer procurement decisions across several end-use industries. Despite continued volatility in the external environment, I am pleased to say that the company has achieved another quarter of very strong operational and financial results, and we are hopeful in maintaining the momentum going forward as well.

At the consolidated level, the production reached 42,826 tonnes, up 3.8% quarter-on-quarter, driven by a strong performance from the subsidiary businesses. However, a 11.2% drop in the sales volume has offset some of the gains, resulting in a flatter top line.

Despite this, the EBITDA as we have achieved is ₹59.8 crores and the bottom line of ₹29.03 crores, and have registered a sequential growth of 14.2% and 25.1%, respectively. EBITDA margins have improved consequentially to 14.1% from 12.4%, and the PAT margins have improved by 138 basis points.

This is a tremendous improvement across all our financial matrices over the corresponding last quarter. In the standalone business, there is a slight impact on production volume, though the sales volume down by 13.4% from Q4 FY26, which we also highlighted in the last concall.

This was primarily due to the normalization of the elevated demand experienced in the previous quarter, softer demand from the textile sector. Higher fiber prices prompted downstream customers to defer purchases, which adversely impacted the volumes.

Nevertheless, the improved realizations and the margins have more than offset the decline in volumes, resulting in a stronger financial outcome. EBITDA has increased by 13.7% sequentially to ₹23.8 crore, other income has declined to ₹3.52 crores from ₹9.86 crores due to the discontinuation of the interest income followed by the conversion of subsidiary loans into equity at the end of the last quarter.

The decline in interest income resulting from the conversion of loans into subsidiaries into equity weighed on the PAT despite higher standalone EBITDA. On YoY basis, revenue has increased by 18.4%, and EBITDA has increased by 155.9%.

Net profits are up by 79.4%. We are pending the FSSAI approvals for the food-grade latest line that we have installed, which is 22,500 tonnes rPET facility at Warangal.

It has already commenced production and is currently catering to the export markets as well as the domestic non-food applications. Another production line of 22,500 metric tonnes is underway.

With these expansions, company's operating leverage is going to improve substantially and thereby enhancing our ability to sustain and even potentially improve the operating margins. Global uncertainties seems to have absorbed by the broader market, and the demand of fiber is also now reviving quite well.

Going forward, we think are both the standalone, which is textile business, as well as the subsidiary businesses are going to go well and are quite well on track. This reinforces our confidence in achieving the targets and guidance shared during our previous calls.

Alongside the ongoing brownfield expansions, the company is actively evaluating and planning the future expansion opportunities to sustain our long-term growth trajectory as well. With this, I open the floor for the questions which you may have.

Thank you.

Hi, sir. Thank you for taking up the question, and congratulations for a great result.

A series of questions, sir. Do you expect this [unclear] subsidiary business, which has significantly improved in 1Q...

Dheeraj, your voice is not clear. It is very very low.

Can you hear me, sir? Can you hear me now?

We can hear. Yeah.

A series of questions, sir, is do you feel this EBITDA per kg, the improvement that you have seen in 1Q, is going to sustain for FY27? Can we expect an EBITDA per kg around ₹22 plus?

Dheeraj, we, as we already commented, with the expansion of brownfield capacities at Warangal, our operating leverage are going to improve substantially, and so we are quite hopeful to maintain the EBITDA margins which we have achieved going forward also. Okay.

Since we are putting up a capacity of 1 lakh tonnes, which is an additional odd 60,000 odd tonnes, do you see any demand softening, or do you expect any softer demand post-commissioning, or do you feel that the capacities are already booked? How's the customer response for this?

See,

as of today, we don't see any demand or issues as such. To be honest, we have a very good optimism in the market regarding uptake of our rPET material.

Since the mandate of the government is now there, more and more adoption of rPET is constantly increasing. I would say there is still a very high room for the demand to grow from here.

As of today, we don't see, to be honest, any challenges in the demand of the rPET because even today the demand of rPET is much higher than the supply.

Got it. On the standalone side, sir, there is a slight volume degrowth, but that has been offset greatly by improved realizations, and then EBITDA per kg has improved to ₹9.

Do you see this ₹9 to ₹10 EBITDA per kg sustaining for the standalone segment for the entire year?

Basically, Dheeraj, we have given the guidance of about ₹70 to ₹80 crores EBITDA for the full year. Basis that it is around ₹7 to ₹8 a kg.

Got it. Do you feel any normalization going forward for the next quarters?

Dheeraj, actually the price volatility are much in case of the raw materials as well as the finished goods prices in our industry. Giving any short-term guidance is actually not feasible or practical.

Going forward, we are quite hopeful to achieve whatever the guidance we have given last quarter for the full FY27. We are quite hopeful to achieve that.

Got, understood. Okay.

Just last question, sir. We've not put FSSAI approval's notification, for the additional 22,500 tonnes line, is the FSSAI approval done, and have we started commercial production?

Hi, Prashant this side. For this, the application has already been submitted with FSSAI long back once we have done the trial production, and all documentary audits have been completed by FSSAI.

Now only the physical audit is pending, which we are expecting to be completed in this month. By the end of the month, we will certainly get the approval of FSSAI.

For the time being, the line is running for export market, where FSSAI approval is not required. EFSA and US FDA approvals already we have for that line.

For export and non-food grade, those material are being utilized.

Understood. Just a follow-up question on this.

Do we see any similar FSSAI approval delays, or can there be any potential delay for the upcoming lines?

No. It is a procedural way to complete this, and during last month, there was a substantial change in FSSAI official, including CEO.

That has delayed a little bit of the files moving, but now I don't think that there is any issue in approval of this. A procedural work of 1 and 1/2 1 to 1 and 1/2 month would be there for every line.

Got it. Thank you, sir.

Thank you, and all the best for your future.

Thank you.

Hello. Am I audible, sir?

Yes, Disha, you are audible.

Yes. Thank you so much, sir, for this opportunity.

Couple of questions. Sir, I think in the previous call we had given a guidance of around 20% plus CAGR.

If you could just break this down into how much of volume growth will we be expecting this year versus the realization growth?

I couldn't get. Can you please come again?

Yeah. This 20%, I think 20% plus growth that we guided for in terms of for the revenue, how much of this are we expecting for volume and how much of this will be driven by realization for this entire year?

We are expecting it in volume terms.

This 20% growth is entirely volume?

Yes.

Okay.

Because in our business, the sales prices are actually quite volatile. We gauge the growth in terms of the volumes.

Okay. How should we look at the price growth, sir, for this year?

If you could provide any sort of broad range?

See, I think it's very difficult to comment on that because you see our prices are determined by the petrochemical prices, the polymer prices, the feedstock prices. There is a volatility of about 20% 20 odd percent from in the last 3 to 6 months time frame itself.

It's very difficult to predict anything on that. It doesn't make any sense.

Okay. In terms of demand, you're not seeing any problem?

No. Demand, obviously in first quarter, we faced a little bit of demand challenges from the textile industry.

Now, I think that has again come back to good trajectory, and the textile industry, since the pipeline was really really low and empty, now again textile industry is going quite decently well. Again, the demand is back on track.

The next thing, sir, is on the sourcing. Are we seeing any challenges currently?

What will be the current scrap prices, if you could just give me that number?

The current scrap prices in the range of ₹48 to ₹50.

Sorry, ₹48 to ₹50, right?

Yeah.

We don't see any challenges in sourcing now?

Basically, we are looking for our delta. The prices are going up and going down in case of RM as well as finished, but we are looking for our delta.

That's quite decent.

Okay. Sir, what is the total capex that we plan for this year, and what is the capex that you're targeting for the next year?

This year we are going to install another line of 22,500, so that is around ₹150 crore capex outlay is there planned for that.

For the next year?

Out of which most of the capex has been done. Part of the capex will be done over next 2 2 3 months.

Is done, sir? Hello?

Most of the capex has been done till now for that line, and the remaining capex will be done in next 2, 3 months, when the line will come underway.

I was just asking if you could give me the number as to how much we've already spent.

Almost 60% we have already done.

Okay. For the next year, sir?

Next year, we are finalizing the next year capex expansion plans, and we will come back on that.

That is it, sir, from my side. Thank you.

Thank you.

Thank you for the opportunity. Congratulations to you all for a good operating performance during this quarter.

I just wanted to know, are we looking to revisit the guidance that we had given for FY27 in terms of EBITDA of ₹225 to ₹250 crore? Also, if you could give us a mix of it, how much of this would come from legacy and how much would come from subsidiary?

Our guidance is intact. We have guided for the ₹225 to ₹250 crore EBITDA for FY27, so that is intact.

Out of which, ₹70, ₹80 crore will come from our legacy business, and the remaining will come from our subsidiary business.

Okay. Will this trend continue in the coming years as well?

Yeah. Going forward, the mix would be tilted in favor of our subsidiary business, because we are increasing the capacity of our subsidiaries.

The EBITDA margins will be improving.

Sure.

For our business. Sure.

One more follow-up question. I think in the previous answer, y'all had mentioned the textile demand is getting back on track.

On back of that, will quarter two see better volume numbers coming from the legacy business?

Certainly, we are expecting that the better volume in the current quarter.

Are you seeing the trends of that already?

It has started already, yeah.

Great. Thank you so much.

Hi, sir. Thank you for the opportunity, and congratulations on good set of numbers also.

I had a few questions. I was trying to understand one thing, that I was just seeing that we generally keep 2, 3 months of inventory, and please correct me if I'm wrong.

Did we saw any kind of inventory gain also this quarter, because the prices went up from January to maybe May to May, June for this quarter. For Warangal numbers specifically, did we saw any inventory gain?

Yes, Dolly. Basically, there is a very high price volatility during last few months.

Certainly we got some inventory gain also in these numbers. The prices are very volatile, and so working out any exact number is not possible.

To mitigate this, are we still maintaining 2, 3 months of inventory, or are we still following the same procedure, we may get benefits... When we are talking about that 2, 3 months Yeah, we are

when we are talking about the inventory 2, 3 months, basically, it is a finished goods as well as the raw material, both. Both are there.

Yes. It is the need of our business, we have to maintain the about 2, 2 and 1/2 month inventory anytime.

Also. Sir, any update on approved FSSAI capacities, as you mentioned in your presentation also, 15 lakh demand is there and 40% to 50% recycling demand is coming due to the mandate.

Two things I wanted to understand: on the, first of all, customer side, how much penetration did we saw? I don't think it must have reached 40% yet.

Any number on if we can quantify in terms of industry, maybe 2.5 lakh, 3 lakh demand is coming, and what are the approved capacities, if we can highlight that number?

See according to our basic data collection, it's obviously it's not verified or exact data. The tentative numbers that we have from the market intelligence is that currently we're running at about 20% to 25% adoption currently.

That is because obviously the global brands, the global buyers, they are trying to follow the compliances, whereas still the regional players, they are still catching up of start using more and more rPET. They've just started very slow.

I think today the average we are at about, as a country, between 20% to 25%. Still, what is happening is that demand and supply today are almost, I would say, kind of at par because the capacity is at about 4 4 4.2 lakh tonnes.

Obviously, because what happens is that everyone is not able to run the plant so efficiently that we are able to, and so the actual output doesn't end up to be the same number, right? Because of that, today the demand and supply almost kind of matched up.

Got it, sir. If I just kind of try to get an overview, past 1 year, 2 years Ganesha as a company has a moat of that side also, that there was a demand supply gap huge.

Current capex we did for this year, but for next year in our evaluation stage of capex for maybe financial year '28, '29, are we still going to expand in rPET only, or are we seeing new categories of recycling or other sectors as capex also as a company?

No, for the time being, we are focusing on rPET business. Certainly, we are looking for other recyclings avenues after 2 to 3 to 4 years

time line. Got it, sir.

Thank you. That will be all, and all the best.

Hi. Thank you for the opportunity.

I just had a question regarding the sequential degrowth we've seen in our subsidiary's volumes. What is that?

Is that purely to do with seasonality, or is there some other element behind that?

No, there's a very slight decline in volume of subsidiary business. The decline in volume is basically in our legacy business.

Right, but

I see there's a 7% decline QoQ on the subsidiary business, and the standalone has degrown 13%. Understandable that the degrowth was not significant, but just trying to understand the reason behind it.

Is it purely to do with seasonality, and what should we expect the run rate going forward on a sequential basis? Do we expect similar sort of volume growth, flattish, or should we see sequentially...

That is because of our fiber business. That is because of fiber business where the prices has gone up really very very very high.

The downstream buyers choose to defer the purchases. Right, so that is a one-off, I think.

It is not persisting. In the current quarter, the sale has revived.

Got it. Just can you give a sense of what sort of realizations should we continue to see within our subsidiary business going forward?

Or should these be similar sort of realizations that we should continue to bake in, or do you see them sort of settling down as the supply-demand situation has sort of neutralized now?

See, in this, you should actually not really look at the realization numbers because again, reiterating what I've said before, the industry is in a very volatile situation right now because of the oil prices moving so radically up and down, the polymer prices are also moving radically up and down, which includes our rPET prices, our fiber prices, and there's a huge volatility that is happening on a month-on-month or week-on-week basis. I would rather like to reiterate that what we are aiming for is to maintain healthy EBITDA numbers in our both legacy as well as subsidiary businesses.

In the subsidiary businesses, we are looking at a much better improved combined EBITDA margin range as we have guided before, we'll be able to meet that or maybe slightly better, but that's what we are aiming for rather than for the exact realization number. It can go up, it can go down.

You believe that this sort of EBITDA per kg of ₹24 on the sub-business is something we should continue to maintain going forward? See,

not exactly. We have guided that at combined EBITDA level, we are aiming for EBITDA between 16 to 20 at a combined level in the subsidiary business.

That's what we are aiming for in the long term.

Got it. Just can you help understand what sort of utilization levels are we targeting to hit in the Warangal facility by the end of this year?

If we're currently at 72%, obviously, I understand that new capacities would come in. I'm trying to understand on the 64,500 MTPA capacity, where do we see that layout?

On overall basis on overall overall basis, we we are looking at about 85% capacity utilization by the end of this year.

This would be at a 1 lakh tonne capacity, you're looking at about 85%?

No. Basically, currently we are having the 64,500 tonne capacity, and our next capacity will come in December, January only.

We are talking about the current capacity.

Got it. About 55,000 tonnes is where we're hoping to be at in terms of production level.

Is that fair to say? Correct.

Correct.

Correct.

Got it. That's it from my side.

Thanks a lot.

Hi, good afternoon. Thanks for taking my question.

Yash, just a couple of questions. One is a follow-up on the previous participant.

You mentioned that the current capacity is 4.2 lakh metric tonne. This I'm assuming is the nameplate capacity, is that right?

Right, Avnish.

Okay. By FY27 end, let's say, what is your estimate of how much this nameplate capacity can grow up to?

By FY27 end, we are looking to...

By end of this year, it would ramp up to 250,000 tonnes.

Total nameplate capacity, Avnish, of rPET between around 5 and 1/2 5 5.2 to 5.5 lakh tonnes.

5.5 lakh metric tonnes. Okay.

When you say that in today's scenario, if the supply and the capacity are matched, this is at a 20% to 25% adoption, right?

Against the government mandate of 40%, yeah.

That's right. By again FY27, I'm just trying to get an idea about will there be a supply demand mismatch, or this will again be kind of matched by FY27 end?

In your... I think now the industry has started maturing quite a bit, and the supply and demand is going to grow quite well hand in hand.

As at the end of the year, we will see how is the industry really looking to increase usage of rPET. We are increasingly hearing that from our current customers as well as new customers regarding the expanding demand on a daily basis.

I think that now the rPET capacity is coming in and the demand expansion will go hand in hand quite a bit, yeah.

Understood. That is clear.

One more question about the new line when you get the FSSAI approval, because it's a new line, I'm assuming that the stability batches would be needed, right?

The line is already running for export market, I don't think there would be any issue. It is the material is well-established on the line, and as soon as we get the approvals, it is ready for the Indian market as well.

Okay. As soon as you get the approval, you can start commercializing for the domestic market.

This is what I'm assuming,

right?

Yeah.

It has already been commercialized for export market.

The stability has also happened parallelly, Avnish. Along with the FSSAI approvals coming in, the stability tests are already parallelly, and, in fact, they are all already complete.

We're just awaiting.

Understood. You have no idea about the timelines of FSSAI approval, or did you mention it in the call?

I might have missed it.

It must be done in this month only, because initial stage of documentary audit has been done as per FSSAI. I think the final physical audit has to happen for this line, which should be planned in this month, and post that, we should get the final approval.

We are expecting this month only.

Understood. Last question, Gopal-ji, this subsidiary sales volume of 14,800, can you just break it down into B2B and filament yarn?

I'm just trying to see whether a major ramp-up in filament yarn volumes has taken place or not.

Avnish, basically we don't give the breakup of the volume because of our strategic reasons.

That's fine. Fair to assume that this improvement in EBITDA per kg to ₹24 is not really driven by filament yarn ramp-up, but more driven by inventory gain?

It is because of both.

Okay. Understood.

Thanks, I'll get back in the queue.

Thank you.

Hi, sir. Congratulations on good set of results.

Sir, just wanted to get your perspective on long-term goals for rPET. What are the long-term aspirations in terms of rPET and What is your 3-year outlook on rPET and what is the possible market share that we can corner?

See, in long-term planning perspective, what we are foreseeing is that the industry of rPET is going to grow to about 10 lakh tonnes by 2030, and we are targeting to capture around 25% market share of that market.

Understood, sir. Sir, how are we seeing the offtake for the other subsidiary businesses, that is rPET filament yarn and RPSF?

See RPSF business, we are already quite mature in that. We already have a capacity, a very high capacity in the over 100,000 metric tonnes in RPSF.

Currently, we are not planning to grow that capacity as such. I think it's quite good today in the mature market.

That would probably grow at about a standard 3, 4, 4% to 5% growth according to the industry demand dynamics. What we are doing rather is we are investing and we are building a more wider basket and value-added functional fibers portfolio increasingly in our product basket to improve the value addition and the realization and the net margins of the product that we are selling today out there in the market today.

That's what we are working on in the RPSF as well as the filament segment.

Understood, sir. Thank you very much, sir.

All the best.

Thank you, Harsh.

Thank you for the opportunity. I hope I am loud and clear.

I think in the last call there was a guidance of around ₹2,500 crores peak revenue from the Warangal facility.

Basically, we for for this year, we this guidance was for the next FY28 for the consolidated numbers, ₹2,300 to ₹2,500 crore.

Sorry, I missed your line. Still, my question was which fiscal year we are targeting this particular peak revenue, and what is the current share in this quarter?

For the current financial year, we have given the guidance of about ₹1,700, ₹1,800 crore consolidate turnover. We are already on the track.

Okay. My next question is on that in the previous participant's question, you answered that we are looking to recycle other materials as well in future.

Can you please throw some light what we are considering and what's the basic discussion happening on that front?

See, we are working on a couple of materials. For example, we are working on polyolefin recycling already.

We're trying to establish some niche products and markets for that. That's our current project that we are already working on.

Going forward, we are looking at various other materials as well.

Right, sir. My last question is maybe this may be a naive thing, but just let's say let's consider this a hypothetical scenario.

Let's say let's let's say we in future we have a mixture we have a different technology of material with let's say blend polyester or plastic being a percentage of percentage of some percentage like we are seeing in petrol, how our current lines are insured, how our current technology is insured that we will be still able to recycle the segment same minor change in the raw material? No,

how you are expecting the raw material to be changed? Because you see the polymer chain is different.

It is not that you can change it easily. I am not getting your correct question.

See no,

see polymers are very different in their nature. You cannot do that.

You can mix the HDPE with the PET and make a bottle out of it. It's not possible.

It's not technologically possible itself. Whenever the polymers are used, they are used in as a prime material in itself to make whatever packaging you have to make from that.

Our lines are designed for recycling PET as a material. Obviously, there are modified forms of PET like PBT, like PTT.

They can be recycled very easily because they follow in the same family. Yes, I don't know how to exactly answer your question.

That's fine. I got your perspective.

Thank you so much.

Hi, sir. Congratulations for a good set of...

Yeah. Congratulations, sir, for a good set of numbers.

My first question would be on the yarn side. Last quarter, we had guided that we have tied up with a customer on the yarn side and we were ramping up with that customer.

How is it going now? We are seeing any slowdown there, or is it going as per our expectations?

It is going stronger. Basically, there was a disruption due to the whole petrochemical industry situation and a huge volatility in the prices and everything.

The whole supply chain was a little bit in disarray. It's going good as we have planned, and we're slowly ramping up the volumes.

Okay. My second question would be on the difference between the virgin PET and rPET prices.

Can you let me know the prices which is going on now?

As of today, the difference between rPET and VPET is somewhere between 5% to 10%.

RPET is...

It's very it's very volatile. It's very volatile.

See, it's very volatile. Last year last month, the prices almost matched.

There was no difference in the price. This month, there is a difference of about 5% to 7%.

It's very it's in a very volatile state, changing on a weekly basis. I don't know how to...

Basically, the what what is happening, the polymer prices because of the crude is changing daily basis, almost on daily basis. You see one day the crude is 80, another day is 95, and another day a third day it is 92, it is like that.

Okay. RPET is ₹10 expensive, more expensive than the virgin PET, that is what you are saying now?

No. Currently, for the last 3 months, on an average, rPET has been cheaper by ₹5 to ₹10 than VPET in the last 3 months.

Okay. My third question would be on the inventory.

In this quarter, we have got that inventory gains because of 2 to 3 months of cheaper inventory with that we are holding. Considering now crude is cooling down a bit, once crude goes to $70 or $80, we can see in 2Q or 3Q this high cost of inventory hitting us in our margins?

Is that assumption correct?

No, we don't expect that, because when there is any very sharp fall or the uptick in the prices, only then we have some inventory gain or inventory losses. When this is normal, when every day there is some fluctuation, we don't expect any inventory gain or loss in that sense.

It is very very minor.

See what really happens in the normal course of business is that we buy at every level and we sell at every level. That's what happens in the normal course of business when you talk about textile.

In case of subsidiaries like filaments or rPET, what happens is we have formulas which does averaging of the last month's inventory, and the price is determined by the average cost of the inventory. Every month's inventory cost is basically passed on to the consumer.

It's only textile where it's all spot, what the strategy that we follow is we buy at every price and we sell at every price, and we try to match and maintain the delta. That's how it works.

Only in case when there is a very sharp uptick or

downturn,

yeah, in the prices, only then it impacts us.

Correct.

Okay. Got it.

Thank you, sir.

Sir, can you tell us when exactly are the rPET capacities coming in which quarter, and from the current 64,000 tonnes, you are adding another 60, right?

No, we are adding 22,500 fresh capacity, and we are making some debottlenecking, making total capacity to 100,000 tonnes. Currently, it is around 65,000 tonnes, another 35,000 will come.

When will this come, if you can tell us which...

That would be available by December, January. Okay.

Basically in quarter four, you will have the entire incremental 40,000 tonne expanded capacity or 35,000 tonnes?

In case of our new capacity of 22,500 tonnes, certainly we have to get the approval from the FSSAI. It depends on the FSSAI approval will be making the full March quarter or will be starting from the April.

Okay. So,

22,000 is brownfield, okay, which will come maybe in quarter one of next year, and 14 13, 14,000 tonne is debottlenecking, which will come in quarter three?

10

10 to

12,000 tonne 10 to 12,000 tonne will come from debottlenecking, which will be available as soon as it is completed. There we don't need any FSSAI approval in that case.

Okay. In that 10 lakh tonnes of 2030, that is assumed at 40% mandate or at what mandate that 10 lakh tonne demand is assumed?

50 50% mandate. That's at 50% mandate.

50%. Industry's capacity today at 280,000 tonnes, is it fully utilized or what is it?

The industry capacity is 4.2 lakh

tonnes, and

actual output is not obviously not that high. Actual output is much lower.

What is the mandate adhered to by the players?

Sorry, the mandate capacity requirement as of today is somewhere between 5 and 1/2 to 6 lakh tonnes.

At what mandate, that is also at 40% mandate, no?

40% mandate, yeah.

Okay. Mandate is 40, capacity needed is 5 plus, capacity today is 420, but capacity used is less than 420, which means the mandate is not fully implemented?

Correct, it's not fulfilled. The people are not using as much as the mandate should be,

yeah. Done, sir.

Hi, thank you for this opportunity, and congratulations on good set of numbers. My question is around the legacy business.

In the earlier calls as well, you had mentioned that we were looking towards the textile-to-textile conversion, basically shifting away from rPET, because the PET bottle scraps because the rPET industry is volatile and the scrap bottle prices are also volatile. We had ventured into textile as an alternative.

Is that what we are still looking towards, or has the plan shifted?

In the last call we discussed we have started to use some textile waste, that is the post-industrial waste. We have already started, yes, to consume 20%, 25% of the industrial waste, textile industrial waste.

Understood. What challenges do we have using textile waste compared to PET bottle scraps when implementing that as a raw material?

You see there are some necessary technical changes required in the plant and process, and that are very well taken care in most of the lines. Whenever you are changing raw material from one set to another set, yes, some technical things have to be modified, and it has been done.

In the present technology, textile waste cannot be used beyond a certain number, certain percentage.

Could you be able to quantify?

It would be quite difficult to quantify, but yes, we are presuming up to 50%, 55% average must be okay. For some product, it depends on product to product.

In some product, you can go beyond 50%, in some product you can consume only 20%, 25%. It all depends on the product what you are making.

Understood. We are assuming that in the long run, when rPET and EPR mandates takes mandate up to 60% and the volatility might inflate or elevate the scrap bottle prices, these measures would insulate the legacy business up to a certain extent.

Is that a correct way to look at?

You see with that there is an incremental growth in consumption of PET bottles as well. The maximum rPET mandate is up to 60%.

Rest 40% would be available for this textile business, number one. With the incremental consumption of PET bottles, the total volume available for both recycling would be higher.

In recycled textiles, now the new capacities would not come. They are not coming.

That is where For somewhere, it will be a trade-off. Trade-off will come in next 2, 3 years.

The trade-off will come. Both the industry will coexist.

Correct,

yeah.

Understood. Just one last question.

I think in the past calls as well, you had mentioned that the Kanpur facility, you were experimenting with recycled HDPE as well. Is there any development going on towards that?

It is still under progress. We are working on some other recycling process as well, apart from HDPE and polyolefins.

Will update this once it is finalized.

Understood. That's all from my side.

Congrats on the good set of numbers. Thank you.

Thanks for the opportunity.

Am I audible now?

Hello, is it better now?

Thank you for the opportunity. I just wanted to know what is our current working capital cycle, and how are we expecting that to fair for this financial year?

In case of our legacy business, the working capital cycle is about 75 to 90 days, and in case of our new businesses, the subsidiary business, it is 45 to 50 days.

Got it. I just joined the call late, I might have missed your comments around capex.

Just wanted an overview around what capex plans are currently undergoing, and what kind of capacity we are targeting to build with that?

See, basically going forward, as we've already detailed out, we are already working on debottlenecking and brownfield capacity expansion. We are going to increase our rPET capacity from current 65,000 tonnes to about 100,000 tonnes by next year.

That's already on way and well on track on time for us to execute faster. Going forward, the next phase of expansion, we are already working on quite closely, quite substantially, and pretty soon we'll be finalizing the next year's plan.

Just one final clarification. You mentioned that we are trying to enter into a new recycled product after rPET.

I just missed that product name, if you can just reiterate.

I think we have already answered this question.

Sir, the product name, I just missed that. Yeah.

Currently we are working on polyolefins recycling.

Got it. Thank you so much, that's it from my end.

Hi, sir. Thank you for taking the follow-up question.

Sir, as we've guided for 20% volume growth this year, I wanted to understand that are we getting new clients in the domestic side or the current customers are only increasing sourcing from us?

Yeah. Both are increasing, Dolly.

The current customers have also increased the volumes, and as well as we have onboarded new customers as well who've started now using rPET at some extent. It's both.

Sorry, what again?

Sorry, what again?

Which clients have we onboarded, if we can name? See,

I'm not comfortable taking the names, to be honest, publicly here.

Okay. Sir, in an export market, which geography are we exporting to currently, and how are we seeing traction there as well?

We regularly work with different geographies like the US market, like the Middle East market, mostly, and both of them we are already working with since the last 2, 2 and 1/2 years.

Are we also onboarding new clients on export side?

Definitely.

What would be current contribution from export business? See,

it keeps on changing, basically because of the geopolitical uncertainties, the ocean freights being so volatile. It keeps on changing on a month-on-month basis.

On an average, I think we are able to do 10%, but it keeps on really changing. Sometimes it's 15, sometimes it's 20, sometimes it's even less, 2, 5, because there's so much uncertainties and volatility in the freights and sea fares as well.

As a company, are we seeing this portion to increase? Are we targeting aggressively, or...

See, we are working to develop more and more markets and more and more customers for our product, and obviously, we try to tilt towards the market where we are able to achieve better numbers economically, financially, right? We obviously try to maintain both the markets.

Obviously, we tilt the volume slightly towards the one where it's more attractive. That's how we work.

Got it. Thank you.

Thank you for taking up the follow-up, sir. This alternative feedstock of textile waste, do we see any cost savings when we shift from bales to textile waste?

Yes, definitely, there is a little cost saving when we obviously use textile waste materials of different qualities. See, obviously those textile waste, they cannot be used directly.

They have to undergo a certain process transformation, a process change to be able to include it in our production process. Definitely, it does offset some part of the cost when we use more and more of that.

Got it. Great.

Currently, what is the percentage of textile waste that we use, and what could be this up to next 2 to 3 years?

Currently, there's about 20%, 25% we are able to use textile waste, on an average.

Okay. We plan to ramp it up, sir, in next 2 to 2 to 3 years?

Of course.

Of course, we are planning for to ramp up, but as we have discussed earlier also, it depends on the products we are making. Product to product the ratio is different.

Certainly we are trying to expand, but it is very difficult to give any specific numbers.

Understood. Last question is do you have any update on the new land that you were looking for for the future capacity expansion beyond FY28?

We are finalizing our expansion plans, accordingly we will work on the land and all those things.

Sure. Thank you, sir.

Hi. Thank you for the follow-up.

I just had a question regarding to my previous one relating to volumes. Just trying to understand that the sort of volumes that on the subsidiary business that we've been for the past two quarters, which is in the range of 15,000 to 16,000, should that be the run rate going forward?

Just trying to understand, have we sequentially sort of hit a peak in terms of the volumes, or do we see sequentially further improving?

We are looking for the sequential improvement in the volume. See, because the fourth rPET line currently is not fully utilized as of yet.

Overall, we are at about 72% utilization levels in the subsidiary, which we are looking to take it to around 85% levels in the coming months.

Got it. It would be fair to say that, let's say, a 16,000 sort of volume run rate on the Warangal facility is roughly 80%, 82% utilization?

From that Q4 number, we shouldn't be significantly seeing any growth sequentially. Would that be fair to say?

Basically, in Q4, there was some pent-up demand, we are having the inventory which was cleared at that time. The production level was much lower.

If you compare the production, we have achieved a decent increase in the production level in our subsidiary business. The volume is same because whatever we have produced, we have sold.

We don't have the much inventory with us in subsidiary.

Got it. Just on competition, are we seeing any sort of threats?

Are we seeing some sort of market share that has been taken away or intensifying in terms of pricing pressures? Also, earlier you spoke about the supply-demand mismatch sort of now evening out.

How do we read that through for FY28? How do we take that into consideration when planning capex?

See, you're definitely right. I think the competitive pressure which was to come has already came last year to us on us.

Last year was particularly difficult year because, one, there was competitive pressure intensity as a lot of new plants came online, as well as the demand, went really really low as there was a lot of confusion regarding the industry, the mandate, and everything. Now, since the industry has started using more and more rPET and the utilizations have gone, really up, we are, in fact, facing more and more increasing demands, obviously because the level of capability, the consistency, the supply security that we are able to provide, it's it's difficult for a, small recycler to provide that to the global brand owners.

In that from that sense of and point of view, we are increasingly facing, much higher demand today than our capacity that we can serve the customers, and that was the major reason for us to convert our greenfield project to brownfield project so that we can cater to the demand, immediately. In fact, now, more so than ever, we are in a much more better competitive position in the industry.

Should it be fair to say that we are a number one supplier for all of our customers, or are we in certain customers a second or tier vendor also?

If you talk about the global brand owners, all the global brand owners and the biggest volume ones, in terms of the size, I don't want to take any names here, we have the highest market share with respect to rPET suppliers.

Got it. That's helpful.

Thanks a lot.

Thank you. The entire executive team joins me in thanking you for your valuable perspective and support.

We remain fully focused on driving operational excellence and capturing the clear opportunities ahead of us. Thank you.