Ddev Plastiks Industries Q1 FY27 earnings call

Ddev Plastiks Industries Limited reported a strong Q1 FY27, with revenue growing by 29% year-on-year, primarily driven by robust traction in the cables and wire segment and export markets. EBITDA increased by 27% year-on-year, with margins at 10%, and notably crossed ₹100 crores for the first time. Profit after tax stood at ₹64 crores, marking a 22% year-on-year growth, reflecting sustained operational discipline despite challenging market conditions.

The company noted that FY27 commenced against a rapidly evolving global and domestic macroeconomic backdrop, but India remains resilient with policy continuity and sustained growth. Domestic macro environment is supported by healthy public investment, improved private sector participation, and resilient consumption demand. India's expanding trade architecture, particularly the India-EU FTA, is expected to provide preferential access for over 99% of Indian exports, creating significant opportunities for manufacturing and investment.

Ddev Plastiks commissioned a new greenfield XLPE compound facility in Bhiwadi with a capacity of 48,000 metric tons in April 2026, increasing its total installed XLPE capacity to 2,14,500 metric tons per annum. The company's total installed capacity now stands at 3,16,400 metric tons per annum, with an average utilization of 66%. This expansion is part of a strategy to deepen market penetration and enhance product sophistication, particularly in medium, high-voltage, and extra high-voltage applications.

The company is making a focused and strategic entry into the Battery Energy Storage Systems (BESS) market, viewing it as a natural extension of its understanding of the power ecosystem and an opportunity from India's renewable energy transmission. The initial business model will be supply-based, with an expected EBITDA margin of 6-8%, potentially rising to 13% with EPC and system integrator models. The first phase of BESS investment is estimated at ₹150-200 crores, funded by internal accruals, with commercialization expected by mid-FY29, though initial delays are anticipated due to relocation.

Exports contributed significantly to Q1 revenue, with over ₹300 crores, driven by strong demand in the MENA region. The company's exports have grown at a 16% CAGR between FY22 and FY26, indicating increasing international acceptance. Management believes the current global uncertainties and supply chain disruption^🌐s provide an opportunity to capture greater market share, especially in the Indian market, as customers may prefer reliable domestic suppliers over overseas options.

The quarter was marked by significant raw material price volatility, with prices changing multiple times a week. This led to an increase in EBITDA per ton by approximately ₹3, as the company passed on increased costs and captured a 'war-risk premium' in exports. While the Q1 EBITDA per ton of ₹19.6 may not be sustainable long-term, management aims for a consistent EBITDA margin of 10-12% or ₹16-17 per ton. The cash conversion cycle temporarily increased due to market turmoil but is expected to normalize^📎 to 55-60 days.

The BESS business is being relocated from West to East, specifically to West Bengal, which is expected to cause a delay of a couple of quarters. Management highlighted that the West Bengal government is actively working on an industrial incentive policy, expected by the end of August. This policy, along with improved land availability initiatives, could provide significant economic benefits and leverage for the company's projects in the region, once the final location within West Bengal is decided.