Captain Polyplas — Q2 FY26 earnings call

Call held 25 Nov 2025

Management summary

Captain Polyplast Limited reported strong Q2 FY26 results, driven by robust growth in both micro-irrigation and solar EPC segments. The company is strategically expanding its solar pump business and enhancing its micro-irrigation capabilities with a new plant. Policy tailwinds and GST reductions are expected to further support growth and affordability in the coming periods, despite working capital intensity in subsidy-dependent segments.

Highlights

  • Total income (Revenue) for Q2 FY26 rose to ₹80 Crores, a 48% Y-o-Y growth.

  • EBITDA increased by 23% Y-o-Y to ₹8.24 Crores, with an EBITDA margin of 10.29%.

  • Net Profit for the quarter was ₹4.24 Crores, resulting in an EPS of ₹0.71.

  • Secured initial orders for 500 off-grid solar pumps totaling ₹14.14 Crores under PM-KUSUM, with revenue largely accruing in H2 FY26.

  • Micro-irrigation business targets 25% growth over the next three years, aiming for a 50-50 revenue split with Solar EPC by FY2028.

  • The new Ahmedabad plant, focused on high-margin irrigation accessories, is expected to commence commercial production by December 2025.

  • GST reduction from 12% to 5% for micro-irrigation and solar products is expected to boost demand and affordability, with results anticipated in Q3 and Q4.

Key financials

  1. Total Income ₹80 Cr +48%YoY
  2. EBITDA ₹8.24 Cr +23%YoY
  3. EBITDA Margin 10.3%
  4. PBT (excl. exceptional) ₹5.76 Cr +65%YoY
  5. Net Profit ₹4.24 Cr
  6. EPS ₹0.71

What they filed

Q1 FY27: revenue up 16.4%, net profit up 8.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue53 90 78 70 80 +50%126 +40%141 +80%81 +16%
EBITDA6 11 8 7 8 +35%15 +35%13 +69%9 +28%
Net profit16 7 5 4 4 −74%9 +41%10 +91%5 +8%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Micro-irrigation (MIS)
    85% Revenue Contribution (H1 FY26)— Margin Profile
  • Solar EPC
    15% Revenue Contribution (H1 FY26)— Rooftop Solar Margin— Solar Pumps Margin

Order book

high confidence

Total value

₹14.14 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹14.14 Cr

Execution

Majority of revenue from these orders would be accrued in H2.

Composition

  • Off-grid solar pumps (product) ₹14.14 Cr 100%

Pipeline

qualified rfp

Participated in another tender in Maharashtra for 1 lakh pumps.

The solar pump order wins reinforce execution capability and strengthen confidence in the vertical. Rooftop solar segment has no extensive order book as business is routine and executed within top customers.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹10 Cr partly our internal accruals and partly debt
    • Adding capacity for injection moulding components (accessories for irrigation systems)
    The capex for Ahmedabad plant, it is around Rs.10 Crores. So, most of that would be incurred in this financial year. A majority of it has already been incurred and whatever is balance, it would be incurred in H2. So, for that, it would be partly our internal accruals and part of it is debt.
  • Liquidity Liquidity disclosed H1 cash flow from operations is typically negative due to receivables from government subsidies in micro-irrigation, with recovery expected in H2.
    for almost all the years the H1 cash flow from operations is negative because we are supplying to the farmers so the receivables do increase and those receivables are realized in Q3 and Q4.

Guidance & targets

Revenue

  • Micro-irrigation business growth Revenue · next 3 years · High confidence 25%
    So for the micro-irrigation business, we are targeting growth of 25% over the next three years.

    — Ritesh Khichadia

  • Solar EPC revenue contribution to total revenue Revenue · by FY2028 · High confidence 50%
    So over three years, it should become 50-50.

    — Ritesh Khichadia

Capacity

  • Micro-irrigation business revenue potential from existing capacity Capacity · current · High confidence ₹400 Crores
    we can comfortably do a micro-irrigation business of Rs.400 Crores.

    — Ritesh Khichadia

Operations

  • Ahmedabad plant commercial production start Operations · Q3 FY26 · High confidence Current quarter / end of December
    We are expecting the commercial production to start in the current quarter... We are expecting it to be operational by the end of December.

    — Ritesh Khichadia

Profitability

  • Overall EBITDA margin for micro-irrigation business (from Ahmedabad plant) Profitability · post absorption of Ahmedabad plant · Medium confidence 1% to 1.5% improvement
    So the overall EBITDA margin for micro-irrigation business would improve by 1% to 1.5% as we fully absorb the Ahmedabad plant.

    — Ritesh Khichadia

  • Overall company margin (from Ahmedabad plant) Profitability · post absorption of Ahmedabad plant · Medium confidence 0.5% to 1% improvement
    Depending on the mix, the overall margin would also improve by 0.5% to 1%.

    — Ritesh Khichadia

Working Capital

  • Receivable cycle for solar pumps Working Capital · expected · Medium confidence 2-3 months
    the receivable cycle would be around two to three months, which we are expecting at the moment as we go ahead, we will get more idea on that as well.

    — Ritesh Khichadia

  • Receivable cycle for micro-irrigation business Working Capital · typical · High confidence 5-6 months
    It varies from state to state, but it is typically five to six months across various states.

    — Ritesh Khichadia

What to watch in Q3 FY26

Ahmedabad plant operationalization and margin impact

next quarter
Current Expected to be operational by end of December 2025
Target Commercial production started, initial contribution to MIS EBITDA margin

Why it matters

The plant is expected to improve MIS EBITDA margins by 1-1.5% by in-housing high-margin components.

We are expecting the commercial production to start in the current quarter... So the overall EBITDA margin for micro-irrigation business would improve by 1% to 1.5% as we fully absorb the Ahmedabad plant.

Risks & concerns

  • Working capital intensity due to government subsidy dependence

    medium

    Micro-irrigation and solar pump businesses have 5-6 month and 2-3 month receivable cycles respectively, due to reliance on government subsidies, leading to negative H1 cash flows.

    Management acknowledged

  • Competitive pressure in rooftop solar segment

    low

    The rooftop solar segment is highly competitive with lower, single-digit margins, though less so in Tier 2, 3, 4 markets.

    Management acknowledged

Q&A highlights

7 direct
Growth expectations and segment profitability Direct
So, first I will share on the margin side, which you asked for the different segments. So, as you rightly said that in the micro-irrigation segment, most of our products are manufactured in-house. So, definitely the margin profile for the overall MIS system is much better compared to the solar EPC side.

Clarifies margin differences between MIS (higher) and Solar EPC (rooftop lower, pumps similar to MIS) and sets growth expectations for both segments.

Asked by Lakshay Kataria

Capacity utilization and Ahmedabad plant details Direct
So, considering our Rajkot and Kurnool capacity, we can comfortably do a micro-irrigation business of Rs.400 Crores. Along with that, we have already started work for new facility at Ahmedabad. So there, our focus is on adding capacity for injection moulding components, which are accessories used in irrigation systems.

Provides specific revenue potential from existing MIS capacity and details the strategic purpose and products of the new Ahmedabad plant.

Asked by Gunit Singh

EBITDA margin compression and raw material environment Direct
So there have been two factors. One is if you see some of the fixed cost like employee cost, it has increased compared to the last quarter... And also, with respect to the mix as well, if we see the last Q2, then the solar EPC segment was less than 10%, whereas in this quarter, it was around 15%.

Explains the reasons for Q2 margin compression (increased fixed costs, higher contribution from lower-margin rooftop solar) and outlines expectations for H2 improvement.

Asked by Anisha Singh

Impact of GST reduction on micro-irrigation and solar products Direct
So as the GST has reduced from 12% to 5%, the farmer contribution which they have to pay for getting the drip system has reduced. So naturally, the affordability for a drip system in almost all the states that we operate in has improved for the farmers.

Highlights the positive impact of GST reduction on product affordability and demand, with results expected in upcoming quarters.

Asked by Anisha Singh

Consolidated cash flow from operations and working capital Direct
for almost all the years the H1 cash flow from operations is negative because we are supplying to the farmers so the receivables do increase and those receivables are realized in Q3 and Q4. So when we will have a look at the March numbers, the negative cash flow which we have seen in H1, majority of that would get recovered in H2.

Clarifies the seasonal nature of cash flows due to subsidy-dependent receivables and provides comfort on H2 recovery.

Asked by Anisha Singh

Risk of farmer non-payment in subsidy-based model Direct
So in our case, the model that we are working across states that is an empanelment based model where there is clear policy from the government and whatever business we do for each and every farmer that we supply the material, we have an individual work order. So there is no risk of not recovering the subsidy. The only risk is it getting delayed.

Addresses concerns about payment risk in subsidy-driven business, emphasizing the company's empanelment model minimizes recovery risk, only causing delays.

Asked by Gunit Singh

Differentiation and competitive advantage in micro-irrigation Direct
In micro-irrigation, it is not a simple product sale. It is a combination of product and service. So we provide both. We focus on providing a quality product. The replants that we are providing to the farmers, the technology for that has been imported from Israel.

Explains the company's competitive edge through a combination of high-quality, Israeli-technology-backed products and an extensive service/dealer network.

Asked by Gunit Singh

2 min read 5 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Dual Growth Engines

Captain Polyplast reported a robust Q2 FY26, with total income surging by 48% year-on-year to ₹80 Crores. EBITDA grew by 23% to ₹8.24 Crores, achieving a margin of 10.29%. Net profit stood at ₹4.24 Crores, translating to an EPS of ₹0.71. This performance was supported by solid progress in the core micro-irrigation business and growing momentum in solar EPC initiatives.

Strategic Expansion in Solar EPC with Significant Order Wins

The company secured empanelment under the PM-KUSUM program in Maharashtra and Gujarat, leading to initial orders for 500 off-grid solar pumps totaling ₹14.14 Crores. The majority of revenue from these orders is expected to accrue in H2 FY26. Captain Polyplast is also developing a range of branded off-grid solar pumps (2 HP to 20 HP) and expanding its rooftop solar EPC business outside Gujarat, targeting a 50-50 revenue split between MIS and Solar EPC within three years.

Micro-Irrigation Business Reinforcement and Growth Outlook

The micro-irrigation segment remains the backbone of the business, contributing over 90% of revenues. Management targets a 25% growth rate for this segment over the next three years, outpacing the industry average of 15%. The upcoming Ahmedabad plant, expected to be operational by December 2025, will add capacity for high-margin injection moulding components (accessories), which were previously outsourced, thereby enhancing overall MIS EBITDA margins by 1% to 1.5%.

Policy Tailwinds and GST Reduction to Boost Demand

Government initiatives like PM-KUSUM and PM Surya Ghar Yojana provide strong policy support. A recent reduction in GST rates from 12% to 5% for micro-irrigation and solar products is expected to significantly improve product affordability. This reduction lowers the farmer's contribution for drip systems and the effective GST rate for rooftop solar, with positive demand impacts anticipated in Q3 and Q4 FY26.

Working Capital Dynamics and Margin Management

The micro-irrigation business typically experiences a 5-6 month working capital cycle due to government subsidy dependence, leading to negative cash flow from operations in H1, which is expected to recover in H2. Solar pump projects are anticipated to have a 2-3 month receivable cycle. While rooftop solar has lower, single-digit margins due to competition, the shift towards higher-margin solar pumps and in-house manufacturing of MIS accessories is expected to improve overall company margins by 0.5% to 1%.

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