Pyramid Technoplast Limited

Pyramid Technoplast reported a strong Q2 FY26 with revenue reaching ₹161 crores, marking a 21% year-on-year increase. Half-year revenue stood at ₹325 crores, up 22% year-on-year. Gross profit for the quarter was ₹43 crores, a 28% year-on-year growth, while H1 gross profit also grew 28% to ₹87 crores. EBITDA for Q2 FY26 increased by 21% year-on-year to ₹12.6 crores, reflecting robust volume growth across all product categories.

The company's production capacity expanded by 22%, increasing from 62,050 metric tons per annum to 75,754 metric tons per annum. This expansion was largely driven by the commissioning of the Wada plant in June, where IBC and HDPE lines are now fully operational. Despite the new capacity, the overall capacity utilization for Q2 FY26 stood at 66%, slightly lower due to the initial ramp-up phase of the Wada plant. Management expects utilization to improve to 68-70% in H2 FY26, with Wada-specific utilization reaching around 80%.

Pyramid Technoplast commissioned two significant sustainability projects in October 2025: a plastic recycling plant and a solar power plant. The recycling unit, located in Bharuch, involved a ₹10 crore investment and has an annual capacity of 5,000 metric tons, expected to meet 10-12% of raw material requirements and offer a 2-3 year payback period. The 6MW solar plant, part of a larger 15MW project, was a ₹60 crore investment with an anticipated 4-year payback, projected to save ₹15 crores annually in power costs, with ₹3-3.5 crores expected in Q3 FY26 alone.

All major segments demonstrated strong volume growth in Q2 FY26. MS Drum volumes increased by 14% year-on-year, contributing to a 7% year-on-year revenue growth, with 90% process automation. HDPE drum volumes rose by 16% year-on-year, leading to an 11% year-on-year revenue growth. The IBC segment showed massive growth with volumes up 42% and revenue up 30% year-on-year, although management noted that IBC export growth was somewhat constrained by tariff issues, which are now normalizing, allowing goods to resume going to the US.

Despite strong top-line and EBITDA growth, PAT for Q2 FY26 grew at a slower pace of 8% year-on-year to ₹6.2 crores. This was primarily attributed to higher fixed costs associated with the initial operations of the Wada plant, including an increase of ₹70 lakhs in electricity, ₹83 lakhs in labor, and ₹45 lakhs in depreciation. Management expects these fixed costs to be absorbed as capacity utilization improves. The recycling plant is projected to reduce raw material costs by 10-12% annually, further boosting margins, and MS drum automation is expected to expand margins by 800-900 bps.

The company's major CAPEX cycle is largely complete, with an additional ₹15-20 crores planned for FY27, primarily for adding machinery and increasing capacity utilization at existing locations in Gujarat and Maharashtra. Capital Work in Progress stood at ₹60 crores, mainly for the solar plant and MS Drums. Gross debt, comprising ₹74 crores in long-term and ₹66 crores in short-term borrowings, totaled ₹140 crores. A jump of ₹40-41 crores in short-term borrowing over six months was used to fund working capital requirements due to recent capex. The company maintains an 'AAA-' credit rating from Acuite, and debt repayments are scheduled to begin from the next quarter with a 5-year tenure.

Pyramid Technoplast reiterated its FY26 revenue guidance of around ₹700 crores and an EBITDA margin of 11-12%. For FY27, the company anticipates approximately 15% revenue growth. Management is focusing on marketing to maximize output from the expanded capacity and expects significant operational efficiencies from the newly commissioned Wada plant, recycling unit, and solar project. The company also indicated plans to launch a new product line in industrial packaging, with an announcement expected within the next 1-2 quarters, signaling further diversification and growth.