TCPL Packaging Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

TCPL Packaging commenced FY26 with consolidated revenues of ₹424.7 crore, growing almost 5% year-on-year, despite subdued domestic demand and international uncertainties. EBITDA stood at ₹72.6 crore with a 17.1% margin, a 50 basis point year-on-year decline due to higher costs and lower revenue growth. The quarter also saw a ₹10 crore forex loss impacting PBT, alongside the successful operationalization of its new Chennai manufacturing facility.

Highlights

  • Consolidated revenues reached ₹424.7 crore, reflecting an almost 5% year-on-year growth.

  • EBITDA stood at ₹72.6 crore, with margins of 17.1%.

  • EBITDA margins were marginally lower by 50 basis points year-on-year.

  • PBT was impacted by a ₹10 crore forex loss due to mark-to-market adjustments on Euro-denominated term loans.

  • The new greenfield manufacturing facility in Chennai has been successfully operationalized and achieved production stability.

  • Domestic demand showed improvement, with expectations for continued growth in the coming months.

Key financials

  1. Revenue ₹424.7 Cr +5%YoY
  2. EBITDA ₹72.6 Cr
  3. EBITDA Margin 17.1% -0.5%YoY
  4. PBT Impact (Forex Loss) ₹10 Cr

What they filed

Q1 FY27: revenue up 15.9%, net profit up 65.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue439 458 410 409 438 −0%453 −1%436 +6%474 +16%
EBITDA76 70 70 71 67 −12%79 +13%67 −4%81 +14%
Net profit36 38 35 23 28 −22%25 −34%21 −40%38 +65%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Revenue

  • Overall Revenue Growth Rate Revenue · long term · Medium confidence mid-teens to high-teens
    So, we have been growing at mid-teens to high-teens growth rate for the last many years. So, our objective primarily is to continue that trajectory, if not exceed it. So, long term, we are quite positive that we should be able to manage those rates and if not exceed them. So, that is our target.

    — Akshay Kanoria

Capex

  • Annual Capex Capex · per year · Medium confidence ₹100 crore to ₹150 crore
    But typically, we have been doing Rs. 100 crore to Rs. 150 crore of capex per year over the last several years. One or two years may be higher, one or two years may be much lower, but on average about Rs. 150 crore capex is being incurred.

    — Akshay Kanoria

Debt

  • Debt to Equity Ratio Debt · ongoing · Medium confidence 1:1 or sub-1:1 levels
    But on a ratio basis, it is quite stable at 1:1 or sub-1:1 levels. So, we hope to continue that.

    — Akshay Kanoria

Chennai Facility

  • Further Capex in Chennai Chennai Facility · this financial year · High confidence no further capex
    So, we don't foresee any further capex this year. But our goal is to fill this up in this financial year, ideally.

    — Akshay Kanoria

Gravure Facility

  • Operationalization Gravure Facility · December quarter this year · High confidence on track
    Yes, that is going on. There is nothing to update, so then we didn't update, but it is going on.

    — Akshay Kanoria

Risks & concerns

  • Macroeconomic Volatility & Geopolitical Developments

    medium

    Management remains mindful of these factors impacting operations and international markets.

    Management acknowledged

  • Forex Loss on Euro-denominated Term Loans

    medium

    A ₹10 crore PBT impact due to Euro-INR rate correction; management states it's a notional mark-to-market loss, not cash out, and loans are long tenure, with natural hedges expected to compensate over time.

    Management acknowledged

  • US Trade Policy / Tariff Differential

    medium

    Recent announcements are not positive, impacting future growth area for exports to the US, but management hopes for resolution through negotiations.

    Management acknowledged

  • Decartonization in Liquor Segment

    medium

    Past trend of liquor companies moving away from cartons due to cost control; management hopes premiumization and brand differentiation will bring back demand for carton packaging.

    Analyst acknowledged

  • Subdued Domestic Demand

    low

    Q1 performance achieved amid subdued domestic demand, but management sees improvement and good demand growth in the festive season.

    Management acknowledged

Areas of evasion (2)

  • segment-wise sales breakup
  • specific sectors for Middle East growth

Q&A highlights

3 direct
Weakness in Export Segment Direct
So, we have been seeing some slack in the export the last few months. We don't see any fundamental issue or any share of business loss. I think it is just to do with overall economic factors at our end consumers' side... So, this should come back eventually.

Addresses a specific area of underperformance, providing management's view on its cause (macroeconomic factors) and outlook (temporary, expected recovery).

Asked by Rohan Kalle

Chennai Facility Expansion and Flexible Packaging Plans Direct
So, we don't foresee any further capex this year. But our goal is to fill this up in this financial year, ideally... Flexible packaging, of course, there is a demand in South India... However, we still have a lot of room for our growth in the existing flexible packaging plant... So, as of now, I don't think we have any plan, but let's see.

Clarifies immediate capex plans for the new facility, outlines the strategy for capacity utilization, and provides a cautious stance on entering flexible packaging in Chennai, prioritizing existing plant growth.

Asked by Rohan Kalle

Finance Cost Increase (Forex Loss) and Chennai Plant Break-even Direct
So, basis the Ind AS accounting standard, we have to mark-to-market the forex loan basis the currency fluctuation. And there was a substantial correction in the Euro-INR rate, which has necessitated this correction in the loan value... it is not close to Rs. 100 crore at all. It is much lower than that because this is on a lease premises. So, we didn't incur the land and building cost.

Explains the nature of the ₹10 crore forex loss (notional, mark-to-market) and clarifies the actual capex for the Chennai plant, correcting an analyst's assumption and providing context for its break-even.

Asked by Pavan Kumar

2 min read 7 chapters

Detailed narrative

Q1 FY26 Performance Overview

TCPL Packaging reported consolidated revenues of ₹424.7 crore for Q1 FY26, marking an almost 5% year-on-year growth. EBITDA stood at ₹72.6 crore, with margins of 17.1%, which was marginally lower by 50 basis points year-on-year. This performance was achieved despite subdued domestic demand and international market uncertainties, highlighting the resilience of the operating model.

Strategic Developments: Chennai Facility

The new greenfield manufacturing facility in Chennai has been successfully operationalized, achieving production stability in Q1 FY26. This facility is seeing encouraging customer engagement and is expected to be a key driver for future growth and regional penetration. Management stated there would be no further capex in Chennai this financial year, with the immediate goal being to fully utilize the first line.

Domestic and Export Demand Trends

Domestic demand showed improvement in Q1, with management expecting continued growth into the festive season, noting significant room for per capita consumption increase. The export segment experienced some slack in recent months, which management attributes to overall economic factors rather than fundamental issues, anticipating a recovery. The company continues to explore new geographies for export growth.

Impact of Forex Loss on PBT

Profit Before Tax (PBT) was impacted by a ₹10 crore forex loss in Q1 FY26, arising from mark-to-market adjustments on Euro-denominated term loans. Management clarified this is a notional accounting adjustment, not a cash outflow, and is due to a substantial correction in the Euro-INR rate. They expressed low concern, noting that the long-tenure loans and natural hedges should compensate over time.

Capex and Debt Strategy

TCPL Packaging typically incurs an average annual capex of ₹100 crore to ₹150 crore, a trajectory expected to continue. The company's debt levels are stable at a 1:1 or sub-1:1 ratio. Management indicated a willingness to take on more debt for good investment opportunities, emphasizing that the balance sheet has headroom and they are not averse to external funding for substantial growth opportunities.

Diversification and New Market Exploration

The company is actively exploring new product lines and market segments as part of its diversification strategy, prioritizing synergistic businesses. While specific details were not disclosed prematurely, management highlighted their strong market recognition and customer relationships as key assets. They are also continuously exploring new export geographies beyond existing markets like Southeast Asia, Middle East, Africa, and Europe, with the US identified as a significant future opportunity.

Liquor Packaging Outlook

Management discussed the past trend of 'decartonization' in the liquor segment, driven by acute inflation and cost control. While this impacted demand for carton packaging, they expressed hope that the ongoing premiumization trend in the liquor industry would eventually necessitate differentiated and higher-value packaging, leading to a resurgence in demand for cartons.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls