TCPL Packaging Limited

For Q2 FY26, TCPL Packaging reported a consolidated revenue of INR 461 crore, with EBITDA at INR 69 crore, translating to a margin of approximately 15%. PAT stood at INR 29 crore, and cash profit was INR 59 crore. For the first half (H1 FY26), consolidated revenue reached INR 885 crore, with EBITDA of INR 142 crore (16% margin), PAT of INR 51 crore, and cash profit of INR 107 crore. The operating environment was challenging due to softer domestic demand and volatile export markets, yet performance remained stable.

The revision in GST slabs during the quarter led to short-term recalibration across the trade channel, contributing to softer domestic demand in September. This transition has largely normalized, and management expects the rationalized structure to support improved underlying demand. However, the exact impact in terms of lost volumes or value due to this disruption was difficult for management to quantify, as it varied by customer and product line.

The export side of the business experienced a subdued first half, primarily due to global market gloom, tariffs, and volatility, particularly impacting traction in the U.S. While China dumping was acknowledged, it was not seen as a major concern for the industry. Management hopes for a bounce back in the next one or two quarters, with encouraging news on freight talks and potential trade deals. If a US trade deal is announced in November, increased business is expected by the end of the financial year.

In the carton business, the company operates at about 70% utilization, indicating room for further expansion without significant capex. The flexible packaging segment also has free capacity, with no immediate major capex plans beyond balancing and specialized equipment. The Chennai Greenfield plant continues to ramp up well, currently operating at about 40-50% utilization, and is expected to reach full utilization in the coming quarters^⏳, supported by strong customer engagement and approvals.

TCPL Packaging has budgeted over INR 100 crore for capex this year, with more than half already completed. This capex is allocated towards land, building for future expansion, commissioning a new cylinder factory in the current quarter, and acquiring balancing and specialty equipment across various units. The company is continuously evaluating strategic initiatives to reinforce long-term growth aspirations, aiming for a mid-double-digit top-line growth rate with improved bottom-line.

Innofilms, now integrated into the flexible packaging business, is showing good traction with specialized products developed through R&D. The line is being utilized for innovative films, with many products under development. While export customers are keen on recyclable packaging, the domestic push has been slower as the government has not mandated its use. However, TCPL is well-placed to capture future demand for high-value, high-tech recyclable products.