Ganesha Ecosphe.

Ganesha Ecosphere reported strong Q4 FY26 results with consolidated production of 41,268 tons (up 6.45% QoQ) and sales of 45,162 metric tons (up 12.25% QoQ). This drove consolidated revenue to INR 423.94 crores (up 18.7% QoQ), with EBITDA at INR 52.35 crores (up 70.4% QoQ) and PAT at INR 23.21 crores (up 388.6% QoQ). The EBITDA margin significantly improved to 12.35% from 8.6% in the previous quarter, reflecting improved demand and stable prices. Operating cash flow generation stood at INR 170 crores, enhancing the ability to fund future growth internally, and net debt remained comfortable at INR 375 crores.

The company commissioned a 22,500-ton Brownfield expansion of rPET chips at Warangal, with ramp-up expected by Q2 FY27. An additional 22,500-ton expansion and de-bottlenecking projects are underway, with an investment of around INR 150 crores, aiming to push installed capacity to nearly 1 lakh tonnes by FY27. This strategic shift from the previously considered Odisha Greenfield project allows for faster capacity realization with much lower and more efficient capex, as Greenfield projects typically take 1.5-2 years to become operational.

The MoEF's notification on March 31, 2026, clearing the smoke over mandatory recycled plastic usage targets, has removed lingering uncertainty and boosted industry confidence. This clarity has led to robust demand for rPET, with current industry demand estimated at 4.5-5 lakh tons against a supply of 2.5-2.8 lakh tons, indicating a significant supply-demand gap. The company anticipates industry capacity to reach 7-7.5 lakh tons in two years, with demand potentially growing to 9-10 lakh tons, driven by increasing PET consumption and compliance levels.

The ongoing Middle East conflict has disrupted supply chains and driven up virgin polymer and PET scrap prices, creating significant pressure across the textile value chain. While the company employs a pass-through mechanism for raw material price increases in its rPET business, the standalone business and legacy segments are more susceptible to margin impact. The spread between rPET and Virgin PET is currently negative (-5), with rPET prices ranging from INR 118-125 per kg compared to Virgin PET at INR 125-130 per kg, a reversal from historical positive spreads.

The filament yarn segment has successfully qualified with a leading global textile brand, and the company expects a steady improvement in its utilization rate over the next three to six months. Management is actively planning for future expansions beyond the 1 lakh ton capacity, focusing on enhancing utilization levels and boosting overall productivity. The long-term top-line growth target is 20% plus CAGR, with an absolute EBITDA target of INR 225-250 crores for the current year, and a goal to maintain 70-80% conversion of EBITDA into cash flow.