GRP

GRP reported a 16% YoY increase in Q4 income to INR 1,606 million, with FY25 revenue growing 19% YoY to INR 5,518 million. EBITDA margins expanded significantly, up 404 bps in Q4 to 20.6% (INR 331 million) and 128 bps in FY25 to 12.6% (INR 694 million). PAT for Q4 and FY25 grew 67% to INR 194 million and 36% to INR 307 million respectively, demonstrating strong financial results despite macroeconomic headwinds.

A key milestone was the commissioning of the crumb rubber facility, which now exceeds 122,000 tons of capacity. This expansion strengthens GRP's capabilities and enables increased downstream integration with upcoming pyrolysis and recovered carbon black plants, opening new avenues in sectors like road surfacing. The company is targeting a threefold capacity expansion across its key business verticals, focusing on enhanced growth.

The company significantly benefited from the Extended Producer Responsibility (EPR) framework, booking INR 309 million in Q4 and a total of INR 434 million for FY25 from EPR credits and accruals. With the EPR framework for plastics in place from April 1, 2025, GRP anticipates increased demand from brand owners, who will be required to incorporate up to 30% recycled content in their packaging materials, aligning with the company's circular economy vision.

While Q4 volumes were adversely affected by macroeconomic volatility, FY25 saw reclaim rubber exports grow 10% YoY, and domestic market share increased from 16% in CY22 to 20% in CY24. However, profitability in the reclaim rubber business, particularly for synthetic reclaim rubber, faced significant pressure due to persistent raw material inflation and delayed price corrections from customers. This was exacerbated by a one-time^📎 inventory write-off of INR 10.5 million in Q4.

The standalone non-reclaim rubber business posted a 3% revenue increase in Q4 and 15% for FY25, driven by a 14% volume increase. The Engineering Plastics segment showed robust 23% volume growth in FY25. The subsidiary, GRP Circular Solutions Limited (GCSL), saw Q4 volumes grow 29% YoY, contributing INR 75 million in revenue but incurring a loss of INR 13 million, with profitability expected once utilization exceeds 75%.

GRP incurred INR 66 crores in capex for FY25, with INR 49 crores specifically allocated to the new pyro and crumb projects, funded by INR 23 crores from term loans and internal accruals. For FY26, the company plans INR 80-90 crores in capex, to be funded by approved Proparco and DFI loans, a Qualified Institutional Placement (QIP), and internal accruals. This capital is earmarked for the ELT-to-Energy vertical and green energy initiatives.

The company noted anxiety around proposed U.S. tariffs in Q4, which indirectly affected exports to certain geographies (e.g., Thailand, Vietnam) that are major tire exporters to the U.S. This led to some internal shuffling of customer portfolios and diversification to other regions. Management indicated that the full impact and future trade flows remain fluid until international treaties are finalized, requiring ongoing adjustments to supply chains and market focus.

GRP's green energy initiatives yielded tangible savings of INR 73 million in energy costs for FY25, significantly contributing to reduced greenhouse gas emissions. The company has an internal target to increase its energy sourcing from renewable sources to closer to 50%. These efforts are part of broader cost optimization strategies, including automation initiatives, aimed at enhancing efficiency and profitability.