TCPL Packaging Limited — Q3 FY26 earnings call

TCPL Packaging reported a consolidated revenue of INR 471 crore for Q3 FY26. EBITDA for the quarter increased by approximately 15% year-on-year to INR 81 crore, with margins expanding by over 240 basis points to 17.2%. This margin improvement was attributed to better gross margins, a favorable product mix, and tighter cost control. The company recorded a PAT of INR 25 crore and a cash profit of INR 56.5 crore, despite an exceptional one-time^📎 loss of INR 11.57 crore related to the revised labour code framework.

The domestic market demonstrated healthy double-digit volume growth during Q3 and 9M FY26, offsetting subdued export volumes. Management noted a two-month disruption followed by a restocking bump post-GST changes, and is now monitoring performance in coming quarters. The domestic business is diversified and not heavily dependent on the tobacco segment, mitigating risks from recent tax hikes, which management is observing for volume impact.

Export volumes remained under pressure in Q3 FY26 due to continued softness in international markets, leading to a decline. However, recent trade developments, particularly with the US and EU, are expected to improve export sentiment. The US market, previously a 'stumbling block' with 50% tariffs, is now more accessible with 18% tariffs. EU flexible packaging tariffs are also expected to reduce from high single digits to zero from next year, offering positive prospects, though the full impact will take time to materialize.

TCPL Packaging commissioned its gravure cylinder manufacturing facility at Silvassa through its wholly-owned subsidiary, Accura Technik Private Limited. This backward integration initiative aims to enhance process control, print precision, and quality consistency while reducing reliance on external outsourcing. The facility has surplus space for future external demand. The company also received the Most Preferred Workplace Award 2025-26 and six IFCA Star Awards 2025, highlighting its commitment to operational excellence and innovation.

The company incurred approximately INR 150 crore in capex in the previous fiscal year (FY25), with a similar amount capitalized. For FY26, an additional INR 100 crore is expected to be added to the gross block, with a similar capex of around INR 100 crore planned for FY27. Management anticipates adding about INR 150 crore to the top-line year-on-year for every INR 150 crore invested. Current overall capacity utilization stands at 70-75%, with the Chennai plant operating at less than 50% utilization, though improvement is expected in the next few months^⏳.

Management addressed concerns about potential paper price volatility, noting that increased protectionism globally, including a minimum import price on virgin paperboard in India, makes a repeat of past 'dumping' scenarios less likely. While acknowledging that weak commodity markets can reduce differentiation between players, the company expressed confidence in its ability to manage price fluctuations, citing its successful navigation of significant paperboard price increases in 2022.

The Board conferred the honorary title of Chairman Emeritus on Mr. K.K. Kanoria, the founder of TCPL Packaging, recognizing his foundational role and long-term strategic thinking. Concurrently, Mr. Saket Kanoria was appointed Chairman and Managing Director, with expectations to guide the company into its next phase of sustainable growth and innovation.