TCPL Packaging

TCPL Packaging achieved its best-ever quarterly performance in Q2 FY25, with consolidated revenues reaching ₹463 crore, marking a 14% year-on-year growth. This robust top-line expansion was accompanied by significant profit growth, with EBITDA increasing by 18% to ₹77 crore, maintaining solid margins of 17%. PBT also saw a 22% rise to ₹45 crore, while PAT and cash profits stood at ₹36 crore and ₹64 crore, respectively, reflecting strong operational efficiency and a benign raw material environment.

The new greenfield facility in southern India, strategically located near Chennai, is on track for commissioning within the next 1.5 to 2 months. This facility is expected to add approximately 750 tonnes per month of board conversion capacity, translating to an initial annual revenue potential of ₹70-80 crore. Management highlighted the significant expansion space available at this site, allowing for incremental capacity additions over time to support sustained growth.

The folding carton segment is operating at a healthy 80% utilization rate. In the flexible packaging segment, which saw substantial capacity addition last year, there remains 30-40% underutilized capacity, implying a current utilization of 60-70%. Management expects this segment to reach a good level of utilization within the next 3-6 months, having already completed half of the typical 6-12 month ramp-up period. A new line was also added in Goa this month, further increasing capacity.

TCPL Packaging has outlined an annual capital expenditure plan exceeding ₹100 crore for FY25. This capex will be allocated towards incremental capacity additions in the carton business, further investments in flexible packaging, and strategic land and building acquisitions around existing plants to facilitate future growth. The company prioritizes investment opportunities for growth, with any remaining surplus cash flow directed towards debt reduction, continuing its trend of improving debt-to-equity ratios.

The company's subsidiary, COPPL, engaged in electronics packaging, has demonstrated high double-digit top-line growth year-to-date. However, its EBITDA margins remain tight and are not yet margin accretive, primarily due to the current scale of operations. Management expressed optimism about future profitability as the subsidiary scales up, driven by new client acquisitions and deepening relationships with existing anchor customers. The company also confirmed it is gaining market share in both domestic and export markets despite challenging FMCG sector conditions.

TCPL Packaging's export business has experienced fairly high growth over the past several years and continues at a comfortable pace. Key drivers include an improved overall India supply chain, competitive pricing, manageable lead times, and enhanced manufacturing scale. The company exports to a diverse range of geographies, including Western and Northern Europe, the Middle East, Africa, Southeast Asia, and North and South America, indicating a well-diversified international presence.