Detailed Narrative
Strong Financial Performance in FY25
Ddev Plastiks reported a robust financial year, with consolidated revenue reaching ₹2,603 crores and EBITDA at ₹287 crores, reflecting an 11% margin. Net profit stood at ₹185 crores, demonstrating an impressive 46% CAGR from FY20 to FY25. The company also achieved its highest-ever annual sales volume of 189,374 metric tons, marking a 14% year-on-year growth.
Q4 FY25 Highlights and Margin Analysis
In Q4 FY25, the company recorded revenue from operations of ₹737 crores, a 23% year-on-year growth, with EBITDA at ₹79 crores and a margin of 11%. PAT for the quarter was ₹52 crores (7% margin). The highest-ever quarterly sales volume of 50,752 metric tons was achieved. Management clarified that the higher Q4 FY24 margins were exceptional due to annual discounts from a new player, while current EBITDA per ton of ₹15.6 is considered sustainable within a range of ₹14.5 to ₹16.
Strategic Capacity Expansion Initiatives
Ddev Plastiks is actively expanding its XLPE, PVC, and HFFR compounding capacities to meet growing demand. In FY25, the company incurred a CAPEX of ₹55 crores and plans to invest another ₹110 crores in FY26. This includes 5,000 tons of XLPE capacity operational in Q1 FY26, 25,000 tons of PVC capacity expected by Q3 FY26, and 10,000 tons of HFFR capacity fully operational by Q2 FY26.
Outlook and Growth Ambitions
The company targets a volume growth of 10-15% and a revenue growth of 12-13% for FY26, aiming to reach ₹4,500 to ₹5,000 crores in revenue by FY30. EBITDA margins are expected to be maintained in the 10-12% range. Management is confident in achieving these targets through operational efficiencies, product portfolio expansion, and increased market share.
Export Market Recovery and US Entry
After facing temporary headwind📎s in H1 FY25 due to logistical issues, Ddev Plastiks expects continuous growth in export volumes in FY26, aiming to restore exports to 25% of overall revenue. The company anticipates receiving at least one US export approval by June 2025, with further approvals expected within three months, which will open up new market opportunities in the US, Middle East, North Africa, and Europe.
Challenges in 132kV Commercialization
While the product for 132kV cables is ready, commercial revenue is not expected before FY27-FY28. This delay is attributed to difficulties in securing customer machines for trials, which are necessary for type testing and commercial launch. Management hopes trials will commence by June or July 2025 as some companies expand their capacities.
Raw Material Management and Market Dynamics
The company manages raw material price fluctuations by transparently adjusting price lists and passing on changes to customers for spot orders. They emphasize that EBITDA margins per ton are controllable. The domestic cable and wire market is projected to grow at an 11-13% CAGR from FY24 to FY27, driven by electrification, infrastructure expansion, and sectoral growth.
Net Debt-Free Status and Credit Rating Upgrade
Ddev Plastiks has maintained its net debt-free position since Q4 FY24. This strong financial health was recognized by Crisil, which upgraded the company's credit ratings to A+ stable for long-term and A1+ for short-term, reflecting robust financial and operational performance.