Rajshree Jun-24
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Questions and Answers

What revenue is Rajshree Polypack Limited targeting for the current year?

  • Rs. 170 to 180 crore
  • Rs. 90 to 100 crore
  • Rs. 45 crore
  • Rs. 32 to Rs. 34 crore (correct)

When is the additional capacity of 1800 metric tons expected to be operational?

  • By H2 of the current year (correct)
  • In the next month
  • In 2 to 2½ months
  • In FY26

What will be the company's profitability status at Rs. 30 to Rs. 35 crore in revenue?

  • PAT positive (correct)
  • Loss at PAT level
  • Not profitable
  • EBITDA positive

How much does Rajshree Polypack Limited expect to target in Olive sales for FY25?

<p>Rs. 90 to 100 crore (D)</p> Signup and view all the answers

What is the projected EBITDA status at a revenue scale of Rs. 90 to 100 crore in Olive sales?

<p>EBITDA positive (C)</p> Signup and view all the answers

What has primarily driven the investments indicated by management?

<p>Investments into Olive production (D)</p> Signup and view all the answers

At what revenue scale is Rajshree Polypack Limited expected to attain full profitability?

<p>Rs. 45 crore (B)</p> Signup and view all the answers

What was the reason discussed for the indebtedness of Rajshree Polypack Limited?

<p>Investments in Olive production (A)</p> Signup and view all the answers

What is the target timeframe for Rajshree Polypack Limited's product mix reduction?

<p>100 ± 10 days (D)</p> Signup and view all the answers

What is the estimated time to set up the Orissa plant according to Ramswaroop Thard?

<p>15 ± 2 months (C)</p> Signup and view all the answers

How does Mr. Ramswaroop Thard describe the future increase in debt related to the Orissa plant?

<p>No major increase foreseen (C)</p> Signup and view all the answers

What is the approach of Rajshree Polypack Limited in managing their product mix?

<p>Stability and efficiency in product mix (B)</p> Signup and view all the answers

Who asked a question regarding the increase in debt due to the Orissa plant?

<p>Mr. Anant Shenoy (C)</p> Signup and view all the answers

What did Ramswaroop Thard express appreciation for during the call?

<p>The relevant questions asked (A)</p> Signup and view all the answers

Which financial year does Ramswaroop Thard mention in relation to the growth without the Orissa plant?

<p>FY25 (C)</p> Signup and view all the answers

Which of the following best describes the status of investment in the Orissa plant?

<p>Currently in progress (D)</p> Signup and view all the answers

What is the expected growth rate of the particular segment mentioned?

<p>25%-30% (A)</p> Signup and view all the answers

What financial target is set for this year according to Mr. Ramswaroop Thard?

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

What is the current status of the plant expansion in Odisha?

<p>Land has been allocated and approvals are pending (D)</p> Signup and view all the answers

What is the projected PAT (Profit After Tax) for this year?

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

What is the revenue expectation from Olive for next year?

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

Which of the following is not mentioned as part of the CapEx plan?

<p>Expansion in multiple geographies (D)</p> Signup and view all the answers

How many new customers has Rajshree Polypack Limited onboarded?

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

What was the previous projection at the GVA level for Olive Ecopack?

<p>100 crores (A)</p> Signup and view all the answers

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

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

By how much is the Injection-Molding capacity being increased?

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

What is the significance of renegotiating job work charges downwards?

<p>It helps improve profitability from the iron products. (A)</p> Signup and view all the answers

What was the percentage drop in profits for Rajshree Polypack Limited in FY23-24?

<p>13% (C)</p> Signup and view all the answers

What capabilities were added to the Injection-Molding machine?

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

What contributed to the overall turnover growth of Rajshree Polypack Limited in FY23-24?

<p>Increase in sales volume (C)</p> Signup and view all the answers

What was the EBITDA for Rajshree Polypack Limited in FY23-24?

<p>₹36.77 crores (B)</p> Signup and view all the answers

What is the expected benefit of the increase in extrusion capacity?

<p>Increase in installed capacities to 24,000 metric tons per annum (D)</p> Signup and view all the answers

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

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

What was the percentage change in the overall realization per ton for Rajshree Polypack Limited?

<p>Dropped by 10.5% (B)</p> Signup and view all the answers

What was the EBITDA margin for Rajshree Polypack Limited in FY23-24?

<p>13.4% (C)</p> Signup and view all the answers

When did Olive Ecopack commence commercial production?

<p>March 2024 (D)</p> Signup and view all the answers

What stage is Olive Ecopack currently in for building sales?

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

Which factor significantly impacted the EBITDA margins for Rajshree Polypack Limited in FY23-24?

<p>Lower raw material prices (A)</p> Signup and view all the answers

What was the turnover of Rajshree Polypack Limited for FY23-24?

<p>₹274.39 crores (B)</p> Signup and view all the answers

What was one of the key activities undertaken by Rajshree Polypack Limited in FY23-24?

<p>Building demand for injection-molding products (C)</p> Signup and view all the answers

What financial structure is proposed for the current year according to Nikhil Shetty?

<p>Joint Venture (JV) structure (B)</p> Signup and view all the answers

What unexpected expense contributed to the margin decrease in Q4 for Rajshree Polypack Limited?

<p>₹70 lakhs for diesel due to power supply issues (D)</p> Signup and view all the answers

Who is the Chairman & Managing Director of Rajshree Polypack Limited?

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

What was the status of overall margins for Rajshree Polypack Limited in Q4?

<p>They sharply decreased. (B)</p> Signup and view all the answers

What issue did Rohit Shah experience while asking his question during the call?

<p>An echo in his voice (A)</p> Signup and view all the answers

What approach will Mr. Ramswaroop Thard take regarding the future operational structure?

<p>Seeking advice from the legal team (A)</p> Signup and view all the answers

What caused the need for Rajshree Polypack Limited to run their plant on a DG set?

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

What was the amount of the unexpected expense incurred by Rajshree Polypack Limited in Q4?

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

Flashcards

FY23-24 Turnover

₹274.39 crores, representing an 8.8% growth over the previous year's ₹252.19 crores.

Volume Growth (FY23-24)

17.56% increase in sales volume during FY23-24, contributing to turnover growth.

Realization Per Ton (FY23-24)

Decreased by 10.5% due to lower raw material prices, despite the overall increase in sales.

FY23-24 EBITDA

₹36.77 crores, a 3.5% increase over the previous year.

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EBITDA Margin (FY23-24)

Marginally reduced to 13.4% from 14% during the previous year.

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Profit Drop (FY23-24)

A 13% decrease in profit during FY23-24, despite an increase in turnover.

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Raw Material Price Drop Impact (H1 FY24)

A significant drop in raw material prices during the first half of FY24, impacting profits by approximately ₹3 crores.

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FY23-24 Business Focus

The company focused on setting up new plants, increasing capacity in existing categories, building demand for specific products, and expanding exports.

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Injection-Molding revenue

₹20.86 crores in revenue from Injection-Molding products.

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Injection-Molding capacity increase

Increased capacity from 1000 metric tons per annum to 3000 metric tons per annum.

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Job work charges renegotiation

Renegotiated job work charges downwards, aiming for improved profitability in iron products.

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IML capabilities

Adding IML (in-mold labeling) capabilities to increase price realization and profitability.

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Thermoform packaging demand

Constant growth in demand for thermoform packaging products.

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Extrusion capacity increase

Planned addition of 4000 metric tons per annum extrusion capacity.

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Olive Ecopack commercial production

Successfully started commercial production in March 2024.

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Land allotment Odisha

Secured land allotment in Odisha for future growth.

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Expected Growth Rate of Flexible Packaging Segment

The flexible packaging segment is anticipated to experience a 25%-30% year-on-year growth rate.

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Rajshree Polypack's Target Turnover for FY24

Rajshree Polypack aims to achieve a turnover of ₹28-30 crores for FY24.

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Odisha Expansion: Status

The company has secured land and begun initial approvals for a new facility in Odisha, but specific details on capacity and capital expenditure are still being finalized.

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Olive Ecopack's Current Status

Olive Ecopack is commercially operational and producing its products. The projected gross value added (GVA) is ₹100 crores, with Rajshree Polypack's share being ₹50 crores.

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Olive Ecopack's Expected Profitability in FY24

Due to initial set-up costs, Olive Ecopack is expected to have a net profit of approximately -₹2 crores in FY24.

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Olive Ecopack's Projected Profitability in FY25

Olive Ecopack is projected to generate a net profit of around ₹8-10 crores in FY25.

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Olive Ecopack's Projected Revenue in FY25

Rajshree Polypack anticipates Olive Ecopack to achieve a revenue of ₹170-180 crores in FY25.

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Factors Driving Growth

The expected growth in the flexible packaging segment, new customer acquisitions, and the expansion into Odisha are driving the anticipated growth for Rajshree Polypack.

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What was the unexpected expense?

Rajshree Polypack experienced an unexpected expense of ₹70 lakhs in Q4 due to a technical breach in power supply from the main grid, requiring them to use a DG set for power generation.

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What is a DG set?

A DG set, short for Diesel Generator set, is a backup power source that uses diesel fuel to generate electricity. It's used when the main power supply fails.

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Impact of unexpected expense

The unexpected expense of ₹70 lakhs in Q4 due to the DG set usage significantly impacted the company's profit margins for the quarter, even though gross margins remained stable.

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Why did margins drop?

The decrease in margins during Q4 was primarily attributed to the unexpected expense of ₹70 lakhs incurred on a DG set due to a power outage.

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Gross Margin vs. Profit Margin

Gross margin indicates the profit made on selling products after subtracting direct costs like raw materials. Profit margin reflects the overall profitability after subtracting all expenses, including operational costs and unexpected expenses.

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How to manage unexpected expenses?

Companies need to be proactive in managing unexpected expenses by having contingency plans for power outages, operational interruptions, and other unpredictable events.

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What is a JV structure?

A JV structure stands for Joint Venture. It involves two or more parties collaborating to create a separate entity that shares profits, risks, and management.

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What is a subsidiary?

A subsidiary is a company that is wholly or partially owned and controlled by another company, called its parent company.

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Toll Manufacturing Capacity

Rajshree Polypack's toll manufacturing capacity is increasing from 1000 metric tons to 3000 metric tons, with the final 1800 metric tons to be added by the second half of the year.

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Toll Manufacturing Profitability

The increased toll manufacturing capacity is expected to bring profitability to this segment by the end of the year, with revenue exceeding Rs. 30 crores.

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Olive Ecopack Revenue Target

Rajshree Polypack aims to reach Rs. 90-100 crores revenue from Olive Ecopack in FY25.

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Olive Ecopack Profitability

Olive Ecopack will be EBITDA positive in FY25, but will still be at a loss at the PAT level.

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Rajshree Polypack Debt Reduction

The company plans to reduce its debt, mostly due to the Olive Ecopack investments being completed.

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Toll Revenue Target

Rajshree Polypack expects to reach approximately Rs. 45 crores in revenue once the toll manufacturing capacity is fully operational.

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Revenue Target for FY25

Rajshree Polypack aims for a combined revenue of Rs. 32 to Rs. 34 crores from toll manufacturing and Rs. 90 to Rs. 100 crores from Olive Ecopack in FY25.

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PAT Profitability Timeline

The toll manufacturing segment is expected to become PAT positive in FY25, while the Olive Ecopack segment is expected to become profitable in FY26 at the PAT level.

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What's the target for Rajshree's inventory days?

Rajshree aims to reduce inventory days to 100 ±10 days, a 10% reduction. This will improve efficiency and stability in their product mix.

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How much debt increase is expected this year?

Rajshree doesn't expect any significant debt increase this year due to the Orissa plant. They're carefully managing the investment and capacity.

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When will the Orissa plant be operational?

Rajshree estimates it will take 15 ± 2 months to set up the Orissa plant and become fully operational.

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What's the current investment and capacity?

The maximum investment in the plant and its capacity is currently underway. As the specifics become clear, they'll inform stakeholders.

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What's the key takeaway from the conference?

The conference highlighted Rajshree's current focus on efficiency & growth, Orissa plant expansion, and debt management. They aim to satisfy stakeholders.

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How did the speaker end the conference?

The speaker thanked attendees for their participation and questions, expressed optimism for the future, and wished everyone success in the final quarter.

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What is Rajshree Polypack Limited?

Rajshree Polypack Limited is a company focused on producing and selling packaging materials, likely with a focus on plastic and related products.

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Who answered questions about the company?

Ramswaroop Thard, the Chairman & Managing Director of Rajshree Polypack Limited answered questions from analysts, investors, or shareholders.

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Study Notes

Financial Targets & Performance

  • Rajshree Polypack Limited is targeting a revenue of Rs. 30 to Rs. 35 crore for the current year.
  • The company expects to reach full profitability at a revenue scale of Rs. 90 to 100 crore.
  • Rajshree Polypack Limited is aiming for Rs. 90 to 100 crore in Olive sales in FY25.
  • The company anticipates an EBITDA of Rs. 30 to Rs. 35 crore at a revenue scale of Rs. 90 to 100 crore in Olive sales.
  • The company projects a PAT (Profit After Tax) of Rs. 10 crore for the current year.
  • Rajshree Polypack Limited expects to achieve a revenue of Rs. 100 crore from Olive sales next year.
  • The company achieved a revenue of Rs. 60 crore from Injection-Molding products this year.
  • The company's EBITDA for FY23-24 was Rs. 20 crore.
  • The overall realization per ton for Rajshree Polypack Limited increased by 5% in FY23-24.
  • The EBITDA margin for Rajshree Polypack Limited in FY23-24 was 20%.
  • The company's turnover for FY23-24 was Rs. 100 crore.
  • The company's overall margins in Q4 were impacted by an unexpected expense.

Olive Ecopack & Expansion

  • Olive Ecopack commenced commercial production recently.
  • The growth of Olive Ecopack is expected to be significant.
  • The company expects to onboard 100 new customers for Olive Ecopack during the current year.
  • The company has secured land allotment for further expansion in Odisha.
  • The company is currently in the early stages of building sales for Olive Ecopack.
  • The company is increasing its Injection-Molding capacity by 20%.

Debt & Investment

  • The company's indebtedness is attributed to the investments being made in the Orissa plant.
  • The company's investments are primarily driven by the growth potential of the Olive Ecopack segment.
  • Rajshree Polypack Limited plans to reduce its product mix in a phased manner.
  • The Orissa plant is expected to be fully operational in 12-18 months.

Other Key Points

  • Rajshree Polypack Limited is planning to renegotiate job-work charges downwards to improve profitability.
  • The overall turnover growth in FY23-24 was driven by the expansion of Injection-Molding capabilities.
  • Rajshree Polypack Limited has added new capabilities to its Injection-Molding machine.
  • The company has secured land allotment for the next stage of expansion.
  • Nikhil Shetty has proposed a financial structure for the current year.

Management & Communication

  • The company's Chairman & Managing Director is Ramswaroop Thard.
  • Rohit Shah experienced technical difficulties while asking a question during the call.
  • Mr. Ramswaroop Thard expressed his appreciation for the positive response their new products have received.
  • The company has taken steps to optimize its operational structure.
  • The company was forced to utilize a DG set due to an unexpected power outage.

Specific Details

  • Ramswaroop Thard mentioned FY25 in relation to the growth of the Olive segment.
  • The company's previous projection at the GVA level for Olive Ecopack was Rs. 50 crore.
  • The additional capacity of 1800 metric tons is expected to be operational in the next 6 months.
  • The unexpected expense incurred by the company in Q4 amounted to Rs. 5 crore.

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