Yash Pakka – (Previously Yash Paper) – Rising from ash

Yash Pakka Q3FY23 earnings call notes.

• 3 products

  • food packaging materials. multi layered substrates.

  • food carry. traditional business.

  • food service division, which is the Compostable division.

• Finalizing Global site in Central America. At final stages, about to sign MOUs with 3 sugar mills & 2 at later stage to make it a 400 tpd site.

• Started producing moulded fibre. we have been struggling in this domain in terms of capacity. finalized 2 sites. One is up an going i.e. Bengaluru site. Next site will start in next month catering to east side of the country – Kolkata site. New site in Kolkata under trials: Slated to produce Chuk products in March.

• Increasing raw material prices is the only challenge we see today.

• Project Jagriti

  • Going to invest 550 cr.

  • existing PM3 to expand by 12-15%.

  • Grease proof paper will be base for flexible packaging.

  • New Power plant

  • Commercialize in next 2 years.

• Compostable:

  • should sell 100% of our capacity by April onwards.

  • Pricing pressure is there as a lot of capacity has come up.

  • Increasing volume, we are not increasing prices.

  • Monthly we are doing 2x revenue of same month last year.

  • Demand is closer to 1000 tones a month and in March we will be at 300-330 tones a month.

  • Our capacity utilization is under 50%.

• Biggest focus is flexible packaging. Patents has been filed for this. Hopefully in next 1-1.5 years see major changes in this segment. It will be used in Biscuits and Chocolate packaging.

• There is an upswing in paper segment. Our products are not generic in nature. Most of our contracts are long term in nature. Our order book is solid.

• Will get NSE listing approval by end of February month.

• Most of our products cater to food packing and food carry.

• Our products go to B2B customers mostly. It will go to converters that are converting to large scale organizations.

• Paper segment cyclicality effects us very less as compared to commodity paper companies.

• we will end up around at 400 cr in sales and 90 cr in PBT in FY23.

• Pulp: Supplying our own Pulp to Indian domestic outsourcing partners. With overseas partners we are using their pulp with our formulation. Can’t transport wet pulp to long distances.

• Mineral pellets: Genesis of Mineral Pellets is that we end up with lime sludge, we were unable to make use of it. What team has done is to blend it with bio plastics. We are the first company in the world to do it and filed patent for it. Bio plastics are more expensive then petroleum based plastics. We mix minerals to it around 50-60%, then the cost is more comparable to petroleum plastics. We are converting a waste into a product.

• USA is 2-2.5 years away because sale there will be from Central America facility and not from India.

• US business will be through a subsidiary of Yash Pakka and fund raise for US business will be in that subsidiary and hopefully not more than 30% equity of subsidiary is diluted.

• We are working closely with Zomato. Relationship with HyperPure is becoming better. Orders have started to flow from Zomato side.

• Close to sign agreement with Central American sugarcane companies, may be within next 1 month.