Huhtamaki India Limited

Huhtamaki India reported Q3 CY25 revenue of INR6 billion, a 4.7% decline year-on-year from INR6.3 billion, but a 2.2% sequential growth from INR5.9 billion in Q2 CY25. For the nine-month period, revenue totaled INR17.9 billion, down 3.2% from INR18.5 billion in the same period last year. Despite lower volumes, the company achieved significant margin expansion and profit growth, with PBT before exceptional items^📎 surging 3.5x year-on-year to INR492 million and net profit after tax reaching INR368 million.

The company demonstrated strong profitability improvements, with EBIT margin reaching 8.6% in Q3 CY25, a notable increase from 3% in Q3 CY24 and 6.1% in Q2 CY25. EBITDA surpassed 10% for the first time in many quarters, attributed to a favorable sales mix and excellent operational efficiency. Management emphasized that these improvements are largely structural, stemming from cost reduction and optimization programs implemented over the past 1.5 years.

While overall volumes remained flattish sequentially and declined year-on-year, management stated this was a conscious choice to prioritize a 'right mix' of products and customers, focusing on higher-value offerings rather than low-priced, commoditized volumes. This strategy aims to avoid compromising the bottom line, even if it results in short-term challenges for 'apple-to-apple volume growth' compared to the broader industry.

The Blueloop (recyclable products) segment contributes 27-30% of the company's total sales, a figure that has remained stable year-on-year. Management acknowledged that this segment is currently in a 'transition stage,' incurring high start-up costs and wastages, making it 'more challenging' to generate better profits. The company is also focusing on new product development in high-barrier structures for personal care and paper-based products, aligning with recyclability and sustainability goals. Additionally, the company achieved an incident-free 'golden quarter' in Q3 CY25, with no lost-time incidents across its sites for 90 days.

Following GST reduction announcements in September 2025, the company observed initial uncertainty among customers, leading to some printing orders being put on hold. However, post-clarification, a positive traction was noted. Management highlighted a potential reversal of the 'down-trading' trend, with consumers now upgrading to premium products. This shift towards premiumization and increased consumption is expected to benefit FMCG companies and, consequently, packaging providers like Huhtamaki, as premium products often require more sophisticated packaging.

The company's finance costs remained stable, supported by a reduction in debt. Huhtamaki repaid INR1 billion of its ECB in September 2024, reducing the outstanding ECB from INR2 billion to INR1 billion. This repayment contributed to the stability of the capital structure. Surplus cash was strategically deployed into bank deposits and mutual funds, indicating a healthy liquidity position.

Mr. Jagdish Agarwal, Executive Director and CFO, announced his departure from Huhtamaki India Limited towards the end of November 2025. Management acknowledged his significant contributions over the past 3.5 years, particularly during a period of significant change and growth for the company. The company expressed confidence in its future trajectory under a dynamic leadership team and strong talent pool.