Ester Industries

Ester Industries delivered a strong Q1 FY26, with consolidated revenue growing by 19% year-on-year. The company achieved an EBITDA margin of 8.35%, representing a 240 basis points improvement compared to the previous year. Excluding the adverse impact of exchange rate fluctuations and MTM losses, the EBITDA margin would have been 11.8%, and EBT improved significantly from a negative ₹1.46 crores in Q1 FY25 to a positive ₹25.4 crores in Q1 FY26.

On July 11, 2025, Ester Industries unveiled a refreshed company logo, aligning with its long-term strategic focus on innovation and sustainability. This new identity reflects an evolving mindset, commitment to high-performance materials, and a sharper response to industry dynamics. The transformation marks a significant step in how the company presents itself to stakeholders and sets the tone for its future journey.

The Polyester Films business showed robust performance, with capacity utilization improving to 82% from 64% in Q1 FY25. Sales volumes grew by 22.57% to 21,531 metric tons, leading to a 20.7% increase in revenue to ₹276.07 crores. The share of value-added products (VAS) in total segmental volume increased to 24%, with VAS product volumes growing 37% year-on-year. Recycled PET (rPET) revenue surged from ₹0.5 crores in Q1 FY25 to ₹14 crores in Q1 FY26, driven by significant volume expansion.

The Specialty Polymers business recorded a 4% year-on-year volume growth, with total sales reaching 954 metric tons in Q1 FY26. The EBIT margin for the quarter was 30% to 35%, which is more aligned with the usual product mix, compared to an exceptionally favorable 43% in Q1 FY25. The company aims for healthy double-digit growth of 20-25% in this segment over the next 3-4 years, focusing on product mix optimization and innovation.

Ester Filmtech, a subsidiary, demonstrated notable improvement with capacity utilization at 72% compared to 49% in Q1 FY25. Sales volumes grew 22.93% to 7,992 tons, and total income increased by 16.32% to ₹94.13 crores. Despite a reported EBITDA loss of ₹2.69 crores due to exchange fluctuations and MTM losses, the underlying EBITDA (excluding these impacts) was positive at ₹9.23 crores, with a healthy margin of 9.8%. The company expects to achieve sustained positive PAT within a couple of quarters by scaling volumes and increasing specialty sales.

The 50-50 joint venture with Loop Industries is progressing as per established timelines, with various activities related to implementation underway. The company is enthusiastic about the transformational potential of this initiative in the circular economy space. Commercial production for the JV is targeted by Q4 Calendar 2027. Currently, the JV incurs approximately ₹20 lakh per quarter in expenses for company maintenance, employees, and regulatory compliances.

The BOPET industry continues to face overcapacity, but operating rates in India are healthy at around 80%. Domestic demand is expected to grow at 10% year-on-year, adding 80-85 kt annually, while exports add another 90-100 kt. The current surplus capacity is estimated at 250,000 tons, which is expected to be absorbed in 2-3 years. The implementation of PWMR rules from April 1, 2025, is enhancing demand for BOPET films with varied PCR content levels, positioning Ester Industries favorably.

Ester Industries is investing ₹50 crores in a new recycling extruder machine and is installing an additional 20,000 tons per annum rPET capacity in Hyderabad, expected by September 2025. Both Ester Industries and Ester Filmtech have been regular with term loan repayments. The company manages foreign currency exposure through hedging, with current hedging focused on 6-12 month periods due to the high cost of long-term hedges. Free cash and bank balances, along with adequate working capital limits, ensure financial stability.