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

Pakka ltd Annual report Highlights
408Cr revenue in FY23,94Cr EBITDA and 51Cr PAT.
76% of the revenue from domestic and rest export.
74% of revenue from paper,13% from pulp and 13% from compostable.

For people who are new to the company, in next 4-5 years Pakka ltd is taking on a huge capacity expansion in Ayodhya and Guatemala location. Turnover potential from Ayodhya after expansion will be 200 USD Million (2026-27) and from Guatemala (2027-28) will be 400 USD million. For a company with annual revenue of 500 USD Million (2022-23), this is quite ambitious .

Company will spend 575cr in Capex at Ayodhya site. Pakka ltd has incoporated a subsidary in USA Pakka inc, this company will raise funding for Guatemala project through equity and Debt. Parent company Equity won’t be diluted for Guatemala capacity. Main purpose of this expansion is to enter compostable packaging solutions (Wrappers/tubes used for FMCG products like chocolate and shampoo). Company will also expand existing business in paper/pulp/compostable.

Given the scale of capital expenditure company plans to spend there is substantial risk involved here. If this capex went wrong, it will strain the company balance sheet for a very long time. Company management has spend a lot of pages in this year annual report explaining the rationale/confidence in this project.

I will summarise the main talking points from board/management in next post.