Rajshree Polypack Jun-24

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Questions and Answers

What is the expected growth rate for the particular segment discussed?

  • 30%-35%
  • 15%-20%
  • 10%-15%
  • 25%-30% (correct)

What is the projected revenue target for this year mentioned?

  • 20-25 crores
  • 25-30 crores
  • 28-30 crores (correct)
  • 30-35 crores

What stage is the process at for the Odisha plant?

  • Production has commenced
  • Land has been allocated and approvals are in progress (correct)
  • Construction is completed
  • Plans have been canceled

What was the projected PAT for the current year?

<p>Negative ₹2 crores (A)</p> Signup and view all the answers

What revenue is expected from Olive next year?

<p>170-180 crores (A)</p> Signup and view all the answers

How many new customers have been onboarded recently?

<p>One or two (A)</p> Signup and view all the answers

What does the abbreviation 'PAT' refer to in this context?

<p>Profit After Tax (A)</p> Signup and view all the answers

Which of the following best describes the future expansion plans in Odisha?

<p>The project is in the initial stages awaiting approvals (B)</p> Signup and view all the answers

What was the revenue generated from Injection-Molding products this year?

<p>₹20.86 crores (A)</p> Signup and view all the answers

By how much was the Injection-Molding capacity increased?

<p>3X (B)</p> Signup and view all the answers

What investment strategy is being employed for increasing Injection-Molding capacity?

<p>Minimum investment in mold bank (B)</p> Signup and view all the answers

What new capabilities have been added to the Injection-Molding machine?

<p>IML capabilities (A)</p> Signup and view all the answers

What is the planned addition of extrusion capacity at the Gujarat unit?

<p>4000 metric tons per annum (D)</p> Signup and view all the answers

What milestone was achieved with Olive Ecopack in March 2024?

<p>Commercial production commencement (C)</p> Signup and view all the answers

Where has land allotment been secured for the company's next growth journey?

<p>Odisha (D)</p> Signup and view all the answers

What stage is the company currently in with regards to Olive Ecopack?

<p>Market seeding stage (C)</p> Signup and view all the answers

What was the cause of the decrease in margins for Rajshree Polypack Limited in Q4?

<p>Unexpected expense of ₹70 lakhs towards diesel (D)</p> Signup and view all the answers

What amount did Rajshree Polypack Limited incur as an unexpected expense in Q4?

<p>₹70 lakhs (A)</p> Signup and view all the answers

What issue led to the additional diesel cost for the Rajshree Polypack Limited plant?

<p>A technical breach in power supply (A)</p> Signup and view all the answers

How did the management respond to the question about the margin decrease during the call?

<p>By highlighting the unexpected expenses (D)</p> Signup and view all the answers

What structure is being considered for the future by Nuvama Wealth?

<p>A joint venture (JV) structure followed by a subsidiary addition (A)</p> Signup and view all the answers

What did Mr. Ramswaroop Thard suggest would be done regarding the JV structure?

<p>They would consult the legal team for the best approach (C)</p> Signup and view all the answers

During the call, how did Mr. Rohit Shah identify his question?

<p>He asked about margin decreases specifically in Q4 (B)</p> Signup and view all the answers

What was the response from the moderator when Mr. Rohit Shah asked his question?

<p>The moderator confirmed that he was audible (C)</p> Signup and view all the answers

What is the expected reduction in the working capital cycle by the next two quarters?

<p>10-12% (C)</p> Signup and view all the answers

How much revenue is projected from the export segment for this year?

<p>60 crores (B)</p> Signup and view all the answers

What was the revenue generated from the barrier packaging segment last year?

<p>Rs. 21.5 crores (D)</p> Signup and view all the answers

What is the anticipated revenue from barrier packaging for the current year?

<p>Rs. 28 to Rs. 30 crores (B)</p> Signup and view all the answers

What aspect of business is the company trying to improve according to Mr. Ramswaroop Thard?

<p>Export revenue (D)</p> Signup and view all the answers

What is the timeline for achieving a 100-day working capital cycle?

<p>In four quarters (C)</p> Signup and view all the answers

Who is the chairman and managing director of Rajshree Polypack Limited?

<p>Ramswaroop Thard (C)</p> Signup and view all the answers

What was the specific inquiry made by Mr. Suresh Jain regarding the barrier packaging machines?

<p>Revenue generated last year (C)</p> Signup and view all the answers

What is the expected revenue growth for Rajshree Polypack Limited in the next year for plastic packaging?

<p>15% (D)</p> Signup and view all the answers

What is the expected volume growth for Rajshree Polypack Limited?

<p>25% (A)</p> Signup and view all the answers

Which factor was indicated as aiding the increase of margins for Rajshree Polypack Limited?

<p>Engagement with customers (A)</p> Signup and view all the answers

What strategy is the marketing team of Rajshree Polypack Limited employing to improve realization?

<p>Engaging with customers for better prices (A)</p> Signup and view all the answers

What impact is expected due to capacity constraints on volume?

<p>Volume will come down (A)</p> Signup and view all the answers

What was the indication about raw material prices over the last two quarters?

<p>They have remained stable (C)</p> Signup and view all the answers

What is the expected margin increase that Rajshree Polypack Limited is working towards?

<p>1-2% (D)</p> Signup and view all the answers

When are the new capacities expected to start contributing to the revenue of Rajshree Polypack Limited?

<p>In H2 of the next year (D)</p> Signup and view all the answers

What is the expected EBITDA margin for the current year?

<p>14 ± 0.5% (A)</p> Signup and view all the answers

What is the projected PAT excluding JV contribution for this year?

<p>Rs. 14 to 15 crores (B)</p> Signup and view all the answers

What does Mr. Ramswaroop Thard indicate about raw material prices?

<p>They are stable and range-bound. (C)</p> Signup and view all the answers

What is the anticipated revenue figure for FY25 as discussed?

<p>Rs. 318 to 320 crores (A)</p> Signup and view all the answers

What type of capacity expansion is being considered?

<p>Small additional capacity in the current location (A)</p> Signup and view all the answers

What is the significance of improved capacity mentioned by Mr. Nikhil Shetty?

<p>It can result in better margins due to operating leverage. (D)</p> Signup and view all the answers

What time frame is Mr. Nikhil Shetty concerned about regarding capacity exhaustion?

<p>Next two or three quarters (A)</p> Signup and view all the answers

What aspect of future capacity planning does Mr. Ramswaroop Thard emphasize?

<p>Evaluating options before making decisions (A)</p> Signup and view all the answers

Flashcards

Injection Molding

The process of creating plastic products by injecting melted plastic into a mold.

IML (In-Mold Labeling)

A type of injection molding that uses in-mold labeling (IML) to create labels directly integrated into the plastic product.

Toll Manufacturing

Products manufactured under contract by another company, often for specific production needs or expertise.

Annual Capacity

The amount of material that a manufacturing facility can produce in a year.

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Renegotiated Job Work Charges

A strategy to reduce manufacturing costs by leveraging economies of scale, where larger production volumes lead to lower unit cost.

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Thermoform Packaging

A thermoplastic sheet used in packaging that is shaped by vacuum or pressure.

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Extrusion

A type of plastic extrusion manufacturing process used to create products like sheets, tubes, and profiles with constant cross-sections.

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Adding Thermoforming Capacity

A method for increasing the production volume of thermoformed products by adding more machinery.

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In-Mold Labeling (IML)

A type of injection molding where labels are directly integrated into the plastic product during molding, creating seamless labels.

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Working Capital Cycle

A method for reducing the time it takes for a company to convert its investments into cash, often by improving the efficiency of its supply chain or operations.

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Export Revenue

The amount of revenue that a company generates from selling its products or services to customers outside of its home country.

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Barrier Packaging

A type of packaging that uses special materials and processes to create a barrier that prevents the contents from being affected by external factors like moisture, oxygen, or light.

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Market Segment Growth Rate

The rate at which a particular market segment is expected to grow annually. For Rajshree Polypack, this segment is projected to grow at a rate of 25% to 30% each year.

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Onboarding New Customers

The process of bringing in new clients or customers to a business. In this context, Rajshree Polypack has successfully onboarded a couple of new clients, further contributing to their anticipated growth.

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Expansion Geography

A geographical region targeted for business expansion. Rajshree Polypack is expanding its operations by establishing a new plant in Odisha, aiming to increase its reach across India.

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Capital Expenditure (CapEx)

The total amount of financial resources dedicated to a new project, in this case, the construction of a new plant in Odisha. Rajshree Polypack is still finalizing the details regarding the CapEx for this project.

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Business Unit (Olive Ecopack)

A specific business unit or division focused on a particular product line or market. Olive Ecopack is a division of Rajshree Polypack that specializes in eco-friendly packaging solutions.

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Gross Value Added (GVA)

The amount of money generated by a business before deducting expenses. In this instance, Rajshree Polypack expects Olive Ecopack to generate 100 crore in GVA, indicating strong revenue potential.

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Profit After Tax (PAT)

The net profit after accounting for all operating expenses, taxes, and interest. While Olive Ecopack is expected to generate significant revenue, its initial profitability is projected to be low due to investment in new operations.

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Revenue Growth Forecast

Rajshree Polypack Limited anticipates a 15% revenue growth in plastic packaging for the next year.

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Increased Production Capacity

Rajshree Polypack Limited expects to increase its revenue by expanding its production capacity, making it operational in the second half of the year.

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Pricing Negotiations

Rajshree Polypack Limited aims to improve pricing with its customers.

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Margin Improvement Target

Rajshree Polypack Limited aspires to enhance profit margins by 1-2% through negotiations with customers.

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Volume Growth Impact

Rajshree Polypack Limited anticipates a decrease in volume growth due to capacity constraints.

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Price Negotiations with Customers

Rajshree Polypack Limited is actively seeking better prices from customers.

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Stable Raw Material Prices

Raw material prices have stabilized after a period of decline.

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Significant Volume Growth

The company sees its volume growth at 25%, a significant increase.

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Raw material price stability

The stability of raw material prices, with fluctuations within a range of 2-5 percent.

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EBITDA Margin for the current year

The expected margin (EBITDA) for the current financial year, aiming for a 14% margin with a possible variation of 0.5 percent.

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PAT (excluding JV contribution) for current year

The projected net profit after taxes (PAT) excluding the contribution from joint ventures, estimated to be between 14 and 15 crores for the current financial year.

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Capacity constraints

The company's current operating capacity is expected to reach its limit within the next two to three quarters, prompting consideration for additional production capacity.

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Future capacity expansion

The potential expansion of manufacturing capacity through adding small additional capacity, likely in the same location or nearby.

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Margins and operating leverage

Potential for improved margins due to the addition of incremental capacity, leading to better operating leverage.

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Flexibility and economies of scale

The company's strategy to respond to supply and demand fluctuations by adjusting production capacity and striving for economies of scale.

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Operational efficiency and profitability

The company's focus on optimizing operational efficiency and profitability, driven by anticipated increased demand and production capacity.

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Study Notes

Earnings Conference Call Transcript

  • Date: June 11, 2024
  • Subject: Transcript of Q4 & FY24 Earnings Conference Call for Rajshree Polypack Limited
  • Purpose: To comply with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the transcript documents the earnings conference call held June 5, 2024, regarding the financial results for the quarter and year ended March 31, 2024. The transcript is also available on the company's website.

Financial Highlights (FY23-24)

  • Turnover: ₹274.39 crores, showing 8.8% growth compared to ₹252.19 crores last year. Growth was driven by 17.56% volume growth, but price realization fell by 10.5% because of lower raw material prices.
  • EBITDA: ₹36.77 crores, showing a 3.5% increase over previous year.
  • EBITDA Margin: 13.4% (down from 14% prior year), affected by the sharp drop in raw material prices during the first half of FY24.
  • Profit After Tax (PAT): ₹9.5 crores (down from ₹10.88 crores previous year). PAT margin was 3.46% compared to 4.31% prior year.

Financial Highlights (Q4 FY24)

  • Turnover: ₹69.37 crores, increasing 7% compared to ₹64.8 crores last year.
  • EBITDA: ₹9.36 crores (almost the same as the prior year's corresponding quarter).
  • PAT: ₹2.38 crores compared to *2.58 crores last year

Export Sales

  • Increase: Export sales increased three-fold, reaching ₹42 crores compared to ₹13.5 crores the previous year.
  • Countries: Expanded distribution to 13 countries compared to 9 in the previous year; major contributions came from the Middle East, UK, US and Southeast Asia.
  • Distributor Network Growth: Efforts to expand the customer base are ongoing.

Injection Molding (IM) Sales

  • Significant Increase: Injection Molding (IM) segment revenue increased substantially in FY23-24, reaching ₹20.86 crores (up from ₹4 crores the previous year).
  • Capacity Expansion: Plans are in place to increase IM capacity from 1000 metric tons to 3000 metric tons, aimed at facilitating additional production to meet demand.

Capital Expenditure (CAPEX)

  • Planned Expansion: Land secured in Odisha with ongoing approval and planned expansions in both extrusion line and thermoforming operations.
  • Further Expansion Details: Details regarding new extrusion and thermoform line capacity expansion are forthcoming as the project is in process.

Other Information

  • Management Team: Led by Mr. Ramswaroop Thard (Chairman & Managing Director) and Mr. Sunil Sharma (CFO).
  • Conference Call: held on Wednesday, June 5, 2024, with Q&A session.
  • Additional Points: Discussion of new plant of Olive Ecopack (in commercial production by March 2024); business operations and strategies; product quality, customer relations; and future outlook of the company.

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