Ganesha Ecosphere Limited

Ganesha Ecosphere Limited achieved significant milestones in FY25, crossing ₹200 crores in EBITDA and ₹100 crores in PAT for the first time. Consolidated revenue grew by 30.5% YoY to ₹1,465.54 crores, with PAT soaring 154% to ₹103 crores. EBITDA margins expanded to 14.4% from 12.3% in FY24. However, Q4 FY25 saw a sequential decline, with consolidated revenue at ₹344.37 crores (down 13% QoQ) and PAT at ₹23.76 crores (down 20% QoQ), attributed to higher input prices and suppressed demand in the legacy business.

Operations at the Warangal plant have stabilized, with food-grade rPET granules demonstrating excellent performance. The existing Warangal capacity is expected to reach optimal utilization by Q3-Q4 FY26. The company is setting up new additional capacity at Warangal, which is anticipated to be operational by December 2025. This expansion is a key driver for future growth, with an estimated additional depreciation of ₹35-40 crores in coming years.

The long-term business outlook for the recycling sector remains intact, supported by the implementation of plastic waste management rules requiring 30% recycling. While the price gap between virgin PET and rPET has widened, management expects it to narrow. The government's strict stance on EPR mandates is expected to drive increased rPET usage by brands, despite some initial hesitation and a slight reduction in offtake volumes from existing customers due to price differentials.

The company is actively working on backward integration to secure raw material supply and reduce costs. Two washing lines are being set up in South India (Tiruchirappalli and Chennai) to collect material locally within a 250-300 km radius. This strategy aims to reduce transportation costs by eliminating the need to transport 23-24% of waste, thereby improving reliability and security of raw material for future expansions rather than directly impacting margins.

For FY26, the company projects consolidated turnover between ₹1,700-1,750 crores, a revision from previous guidance. Post-expansion, turnover is expected to reach ₹2,600-2,700 crores by FY27-FY28. Standalone EBITDA margins are targeted to be maintained at 10-11% for FY26, while subsidiary EBITDA margins are expected to continue in the 21-22% range. The company aims to increase the contribution of value-added products to 55-60% of sales over the next two years and reduce inventory days from 100 to 70-75 days within 1.5 years.

The legacy business is expected to face challenges for the next two to three quarters due to high input prices and suppressed demand. However, the company is developing newer value-added products and exploring new markets. Exports currently contribute about 9% to consolidated revenue, and the company is actively working to increase its capacity exposure to the export market, particularly given demand for rPET in the EU and US markets, where rPET chips are exempted from tariffs.