TCPLPACK - TCPL Packaging Limited Share Price

The management of TCPL Packaging Limited provided an optimistic outlook during the Q4 & FY25 earnings call. They reported consolidated revenue of Rs. 1,770 crore for FY25, reflecting a 15% year-on-year increase. EBITDA rose 17% to Rs. 293 crore, with improved margins of 16.6%. Profit After Tax (PAT) surged 44% to Rs. 143 crore. In Q4 alone, the company achieved revenue of Rs. 422 crore, a 5% increase year-on-year, alongside a PAT growth of 33% to Rs. 38 crore.

Key forward-looking points included plans for a new gravure cylinder manufacturing facility with a capacity of approximately 12,000 cylinders in Silvassa, set to be commissioned by Q3 FY26. This facility aims to enhance quality control and print precision. Furthermore, the new Greenfield facility near Chennai, focused on high-quality paperboard cartons, is expected to ramp up in the next 6 to 12 months.

On sustainability, management set a target for carbon neutrality for operational emissions by 2040, emphasizing their commitment to climate action. They are also working on an integrated report to provide a comprehensive view of their sustainability strategy.

The management expressed confidence in sustaining growth in exports despite the challenges of a subdued domestic environment. They anticipate improvements in domestic demand due to early monsoon forecasts and government tax cuts, with a focus on leveraging their expanded manufacturing footprint in Southern India to gain market share.

Additionally, a dividend of Rs. 30 per share was recommended, highlighting the company's commitment to shareholder value. The management reiterated their long-term ambition to achieve a consistent revenue CAGR of about 17.6% while managing disciplined investments and innovation strategies to capitalize on emerging opportunities in the packaging sector.

Q&A Section Overview from the Earnings Transcript: June 5, 2025

1. Question: "Do you expect that we can sustain a similar year-on-year growth momentum here in FY26 as well?"
Answer: Yes, we've had a strong run in exports with growth each year. While maintaining the same percentage of growth is more challenging as our base has grown, we still see potential for good growth with strong inquiries and developments in the pipeline. Overall, we are positive on exports, though timing remains unpredictable.

2. Question: "For FY26, how would you be looking at our domestic piece?"
Answer: We anticipate an improvement in our domestic business this year. Our new plant will enhance our geographic reach, and we have existing customer developments that are kicking in. The broader economic indicators also suggest recovery, enhancing private consumption more than last year.

3. Question: "What is your current utilization level at the Chennai facility and how many lines will be added this year?"
Answer: It's too early to provide exact utilization percentages given we only recently started operations. It typically takes 6-12 months for full utilization as we go through customer audits first. We do not foresee any additional capacity expansion this financial year.

4. Question: "What is the outlook for Creative Offset Printers Limited?"
Answer: We expect Creative to grow at a faster pace this year compared to last, contributing positively to the bottom line. The industry is growing, and we are exploring higher value products beyond just electronics, projecting a turnaround soon.

5. Question: "Can you help with the revenue breakup between folding cartons and flexible packaging?"
Answer: Approximately 80% of our revenue comes from folding cartons, while the remaining 20% is from flexible packaging.

6. Question: "What is the capacity utilization of Innofilms?"
Answer: Our utilization rate for Innofilms currently stands between 60% and 70%, addressing both domestic and export needs effectively post-issues with machinery, now resolved.

7. Question: "Can you provide details about the Rs. 200 crore capex for this year and plans for FY26?"
Answer: This capex primarily went towards our new Chennai plant, the in-progress cylinder plant, and minor enhancements in existing facilities. For FY26, we expect lower capex without any major new projects planned, focusing on optimizing existing assets.

8. Question: "What growth do you foresee in exports, especially with new market exposure?"
Answer: Existing markets are performing well, and we aim to strengthen our presence in the U.S. due to tariff issues prompting customers to shift to Indian suppliers. India's new FTAs are also beneficial, enhancing growth prospects.

9. Question: "What are your expectations for margins moving forward?"
Answer: We don't provide specific guidance, but historically our average EBITDA margins range from 15% to 17%. We expect them to remain within this range.

10. Question: "What is your plan for capital allocation moving forward?"
Answer: We are constantly evaluating new segments and opportunities but are conservative. Our goal is to maintain growth rates while ensuring any new initiatives are well justified before pursuing them.

This summary captures the essence of the responses given in the conference call, focusing on key inquiries and strategic outlooks for TCPL as noted in their earnings report.