Rajshree Polypack – The food packaging specialist

Q3FY23 NOTES:

• SALES GUIDANCE – current year – 255-260cr. Q3 is the weakest quarter (generally -10% volume decline qoq). Q4 and Q1 are the strongest quarters.
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• EBITDA MARGINS: Current quarter ebitda got impacted because of seasonality and higher electricity costs. Generally, Q1 and Q4 are better for us in terms of requirements and the margins are generally better in this particular quarter. We have moved to a new location at Sarigam where our electricity cost is on the higher side and we expect that to get compensated through GST subsidy, which we are expecting to roll out or to get the clearance in another 1 month or 2 months’ time, and probably in a year we will get around Rs. 1 to Rs.1.5 crore compensated through GST subsidy. So that will help us in bringing back that additional ½ a percent or 1% into the EBITDA numbers. And at the same time as we scale up, because all the investments have been done now for the plastic units, so as we scale up, we will see a further improvement coming up and will be around 15% EBITDA

• Total 19 new products added in current quarter including 12 products in injection moulding
One Product & Process patent received.

• Undertook technological upgradation in tube laminate segment and sample production commenced

• Sales volume growth 13% YOY. Lower polymer prices YOY resulted in lower value growth in overall sales.

• Presently, the company is focusing on food service segment for the injection Molding products. Sales from injection moulding with the current capacity? It will be around Rs. 16 to Rs. 18 crores per annum. It’s a new process for us, we are starting with plain vanilla products and as we have expertise on the process, we will like to add value-added products even in injection molded category

• We have also boarded more than 30 new customers in the current quarter including some overseas customers.

• Barrier packaging – We did around Rs. 16 – Rs. 17 crores of sale till 9 months. We are looking at around 30- 40% growth in this category. So that’s the rate at which we are looking at to grow.

• See, as mentioned, probably we are looking to close this year between anywhere between Rs. 255 to Rs. 260 crores, and for next year we look for additional 10 to 15% growth in the top line. That much capacity is available with us without any further major investments. So, we can look at that particular growth for next year in the top line.