Q1 2027 TCPL Packaging Ltd Earnings Call

August 12, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to TCPL Packaging Limited's earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: Ladies and gentlemen, good day and welcome to TCPL Packaging Limited's earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Jenny Rose from CDR India. Thank you, and over to you.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Ms. Jenny Rose from CTR India. Thank you, and over to you.

Speaker #2: Good afternoon, everyone, and thank you for joining us on TCPL Packaging's Q1 FY27 earnings conference call. We have with us today Mr. Saqib Kanoria, Chairman and Managing Director; Mr. Akshay Kanoria and Mr. Vidur Kanoria, Executive Directors; and Mr. Vivek Dave, GM - Finance of the company.

Jenny Rose Kunnappally: Good afternoon, everyone, and thank you for joining us on TCPL Packaging's Q1 FY27 earnings conference call. We have with us today Mr. Saket Kanoria, Chairman and Managing Director, Mr. Akshay and Vidur Kanoria, Executive Directors, and Mr. Vivek Dave, GM Finance of the company. We would like to begin the call with brief opening remarks from the management, following which we will have the forum open for an interactive question and answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation shared with you earlier. I would now like to invite Mr. Akshay to make his opening remarks. Over to you, Akshay.

Speaker #2: We would like to begin the call with brief opening remarks from the management, following which we will have the forum open for an interactive question and answer session.

Speaker #2: Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation shared with you earlier.

Speaker #2: I would now like to invite Mr. Akshay to make his opening remarks. Over to you, Akshay.

Speaker #3: Good afternoon, everyone, and thank you for joining us today for TCPL Packaging's Q1 FY27 earnings call. I will begin by taking you through our business and financial highlights for the quarter under review, following which we will be happy to open up for a question-and-answer session.

Akshay Kanoria: Good afternoon, everyone, and thank you for joining us today for TCPL Packaging's Q1 FY27 earnings call. I will begin by taking you through our business and financial highlights for the quarter under review, following which we will be happy to open up for a question and answer session. FY27 has commenced on a strong note for TCPL with healthy demand across our key businesses, continued improvement in operating performance and another quarter of broad base and profitable growth. During the first quarter, we delivered a record quarterly performance with consolidated total income increasing by 16% year on year to INR 495 crore, while EBITDA grew by 17% to INR 88 crore, with margins improving to 18%. Cash profit increased by 56% year on year to INR 76 crore, while PAT grew by nearly 79% year on year to INR 40 crore.

Speaker #3: FY27 has commenced on a strong note for TCPL, with healthy demand across our key businesses. We have seen continued improvement in operating performance and another quarter of broad-based and profitable growth.

Speaker #3: During the first quarter, we delivered a record quarterly performance, with consolidated total income increasing by 16% year-on-year to ₹495 crore, while EBITDA grew by 17% to ₹88 crore.

Speaker #3: With margins improving to 18%, cash profit increased by 56% year-on-year to ₹76 crore, while PAT grew by nearly 79% year-on-year to ₹40 crore. This performance was driven by strong demand, particularly in the domestic market, with both our folding cartons and flexible packaging businesses performing very well.

Akshay Kanoria: This performance was driven by strong demand, particularly in the domestic market, with both of our folding cartons and flexible packaging business performing very well. We continue to grow ahead of the market and gain share across key segments, supported by strong customer relationships, disciplined execution and continued investments in capacity, technology and value-added solutions. Despite various headwinds during the quarter, we were able to grow volumes and improve margins, reflecting the strength of our operating performance and focus on efficiencies. Our export business also recorded steady year-on-year growth. However, we remain cautious on the near term outlook given the continuing uncertainty in the global operating environment. One of the highlights during the quarter was the continued strong performance of our flexible packaging business. Our existing facility is now operating at optimal utilization, supported by strong customer demand.

Speaker #3: We continue to grow ahead of the market and gain share across key segments, supported by strong customer relationships, disciplined execution, and continued investments in capacity, technology, and value-added solutions.

Speaker #3: Despite various headwinds during the quarter, we were able to grow volumes and improve margins, reflecting the strength of our operating performance and our focus on efficiencies.

Speaker #3: Our export business also recorded steady year-on-year growth. However, we remain cautious on the near-term outlook, given the continuing uncertainty in the global operating environment.

Speaker #3: One of the highlights during the quarter was the continued strong performance of our flexible packaging business. Our existing facility is now operating at optimal utilization, supported by strong customer demand.

Speaker #3: To support the next phase of growth, we have initiated the addition of a high-speed manufacturing line. The expansion will provide additional capacity to address growing customer requirements, increase the share of value-added products, and pursue new opportunities across domestic and export markets.

Akshay Kanoria: To support the next phase of growth, we have initiated the addition of a high-speed manufacturing line. The expansion will provide additional capacity to address growing customer requirements, increase the share of value-added products, and pursue new opportunities across domestic and export markets. We will continue to invest to support future growth while maintaining a prudent approach to capital allocation. Packaging remains a cornerstone of TCPL and will continue to be the principal focus of our investments. We see significant opportunities to deepen our presence across existing customers, broaden our product portfolio, expand our presence in international markets, and further strengthen our leadership position across both paperboard and flexible packaging. At the same time, we continue to evaluate adjacent opportunities where our existing capabilities can provide a strong foundation for long-term growth.

Speaker #3: We will continue to invest to support future growth, while maintaining a prudent approach to capital allocation. Packaging remains the cornerstone of TCPL and will continue to be the principal focus of our investments.

Speaker #3: We see significant opportunities to deepen our presence across existing customers, broaden our product portfolio, expand our presence in international markets, and further strengthen our leadership position across both paperboard and flexible packaging.

Speaker #3: At the same time, we continue to evaluate adjacent opportunities where our existing capabilities can provide a strong foundation for long-term growth. In this context, today marks an important milestone in TCPL's journey.

Akshay Kanoria: In this context, today marks an important milestone in TCPL's journey, and we are pleased to announce our proposed entry into the advanced chemistry cell battery materials value chain through lithium-ion battery separator film. This initiative represents a natural extension of capabilities TCPL has built over several decades. While the end application is different from packaging, many of the underlying competencies required, including specialized films, polymer processing, precision manufacturing, process engineering, stringent quality systems and R&D, are closely aligned with our existing strengths. We therefore see this as a logical extension of our capabilities into an adjacent technology-driven opportunity. The project will be established through a subsidiary with a proposed investment of approximately INR 125 crore to be deployed over the next 18 months, with commercial production targeted during Q4 FY28.

Speaker #3: And we are pleased to announce our proposed entry into the Advanced Chemistry Cell Battery Materials value chain through lithium-ion battery separator film. This initiative represents a natural extension of capabilities TCPL has built over several decades.

Speaker #3: While the end application is different from packaging, many of the underlying competencies required—including specialized films, polymer processing, precision manufacturing, process engineering, stringent quality systems, and R&D—are closely aligned with our existing strengths.

Speaker #3: We therefore see this as a logical extension of our capabilities into an adjacent, technology-driven opportunity. The project will be established through a subsidiary, with a proposed investment of approximately ₹125 crore to be deployed over the next 18 months, with commercial production targeted during Q4 FY28.

Speaker #3: We intend to develop the business in a phased manner, initially focusing on establishing the manufacturing infrastructure; developing the technology platform, validating the product, completing customer qualification processes, and building strong relationships with customers before pursuing large-scale expansion.

Akshay Kanoria: We intend to develop the business in a phased manner, initially focusing on establishing the manufacturing infrastructure, developing the technology platform, validating the product, completing customer qualification processes, and building strong relationships with customers before pursuing large scale. Proposed facility will initially have a manufacturing capacity of approximately 70 million square meters per annum, supporting around 6 to 8 gigawatt hours of lithium-ion cell production annually. Over the longer term, subject to customer demand and market developments, we plan to scale this platform to nearly 500 million square meters per annum, capable of supporting approximately 50 gigawatt hours of battery cell manufacturing capacity. We believe the timing of this investment is attractive given the significant investments underway in India across electric vehicles, energy storage systems, and domestic battery manufacturing, supported by policy initiatives aimed at increasing localization across the battery value chain.

Speaker #3: The proposed facility will initially have a manufacturing capacity of approximately 70 million square meters per annum, supporting around 6 to 8 gigawatt-hours of lithium-ion cell production annually.

Speaker #3: Over the longer term, subject to customer demand and market developments, we plan to scale this platform to nearly 500 million square meters per annum, capable of supporting approximately 50 gigawatt-hours of battery cell manufacturing capacity. We believe the timing of this investment is attractive, given the significant investments underway in India across electric vehicles, energy storage systems, and domestic battery manufacturing, supported by policy initiatives aimed at increasing localization across the battery value chain.

Speaker #3: As domestic cell manufacturing capacity expands over the coming years, we expect demand for locally manufactured separator films to grow meaningfully. TCPL is well positioned to participate in this emerging opportunity by leveraging the engineering and manufacturing expertise built over the last three decades.

Akshay Kanoria: As domestic cell manufacturing capacity expands over the coming years, we expect demand for locally manufactured separator film to grow meaningfully. TCPL is well-positioned to participate in this emerging opportunity by leveraging the engineering and manufacturing expertise built over the last three decades. I would also like to reiterate that our packaging business remains our core focus. The battery materials initiative is an additional long-term growth platform that complements our existing strengths while we continue to expand and strengthen our packaging business. We will continue to invest in capacity, technology, automation and product innovation to enhance our competitive position across our existing businesses. Looking ahead, we remain optimistic about the demand environment for packaging. Consumption-led growth, increasing premiumization, rising demand for sustainable packaging solutions, and continued outsourcing by branded customers provide favorable structural tailwinds for the industry.

Speaker #3: I would also like to reiterate that our packaging business remains our core focus. The battery materials initiative is an additional long-term growth platform that complements our existing strengths, while we continue to expand and strengthen our packaging business.

Speaker #3: We will continue to invest in capacity, technology, automation, and product innovation to enhance our competitive position across our existing businesses. Looking ahead, we remain optimistic about the demand environment for packaging.

Speaker #3: Consumption-led growth, increasing premiumization, rising demand for sustainable packaging solutions, and continued outsourcing by branded customers provide favorable structural tailwinds for the industry. With our diversified customer portfolios, strong manufacturing capabilities, and balance sheet, we believe we are well positioned to sustain profitable growth while maintaining a prudent approach to capital allocation.

Akshay Kanoria: With our diversified customer portfolio, strong manufacturing capabilities, and balance sheet, we believe we are well positioned to sustain profitable growth while maintaining a prudent approach to capital allocation. With that, I would like to request the moderator to open the forum for any questions or suggestions that you may have. Thank you.

Speaker #3: With that, I would like to request the moderator to open the forum for any questions or suggestions that you may have. Thank you.

Speaker #1: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone.

Operator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and then one now. Your first question comes from the line of Abhisar Jain with Monarch AIF. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star, then two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star then one now.

Speaker #1: Your first question comes from the line of Abhisar Jain with Monarch AIF. Please go ahead.

Speaker #2: Yeah, hi sir. Sir, the first question is on the new capex on the flexible packaging side that you have mentioned. So, what would be the capacity that we plan to add, and what would be the capex for this?

Abhisar Jain: Yeah. Hi, sir. Sir, the first question is on the new CapEx on the flexible packaging side that you have mentioned. What would be the capacity that we plan to add, and what would be the CapEx for this?

Speaker #3: Yeah, Vidur, you wanted to get that?

Akshay Kanoria: Yeah. Vidur, do you want to get that?

Speaker #4: Yeah, so we'll be adding about—it’s about a 30% increase on our existing capacity. So, yeah, about 30%, you can say, is the increase.

Vidur Kanoria: Yeah. We will be adding about a 30% increase on our existing capacity. It is about 30%, you can say, is the increase.

Speaker #2: And approx capex for that?

Abhisar Jain: And approximate CapEx for that?

Speaker #4: So we'll be investing about—it's about 50 to 60 crores, yeah.

Vidur Kanoria: We will be investing about-

Akshay Kanoria: 50

Vidur Kanoria: It is about 50 to 60 crores, yeah.

Speaker #2: Understood. And in the flexible segment, because you're triggering expansion, on the existing capacity, are we at full utilization? What would that number be in terms of utilization percentage?

Abhisar Jain: Understood. Is it flexible because you are triggering an expansion, so on the existing capacity, we are at full utilization, and what would be that number in terms of utilization percentage?

Speaker #4: Yeah, full utilization is varying month to month, but it's fairly—almost, you could say, fully utilized.

Vidur Kanoria: Full utilization is varying month to month, but it is fairly, almost you could say, fully utilized.

Speaker #2: Understood. And on the folding carton side, as of now, what would be our capacity utilization and how much room will we have before we look to trigger any expansion there also?

Abhisar Jain: Understood. On the folding carton side, as of now, what would be our capacity utilization and how much room we will have before we look to trigger any expansion there also?

Speaker #3: Yeah, I'll take that. So, we are at about 70-plus percent, but in different units, we may be at a higher or lower utilization.

Akshay Kanoria: I will take that. We are at about 70% plus, but in different units, we may be at a higher or lower utilization.

Speaker #3: So, as of now, it's fine. We are mostly concentrating on expanding the area in a couple of our factories to make room for capex in the next year.

Abhisar Jain: Right.

Akshay Kanoria: As of now, it is fine. We are mostly concentrating on expanding area in a couple of our factories to make room for CapEx in the next year.

Speaker #3: And in some of the plants, we do have some area already developed and spare. So as and when the orders pick up, like in Chennai, then we can quickly add capacity in a quarter or one and a half quarters' notice.

Abhisar Jain: Right

Akshay Kanoria: in some of the plants, we do have some area already developed and spare. As and when the orders pick up like in Chennai, then we can quickly add capacity in a quarter or 1.5 quarters notice.

Speaker #2: Nice. And so the next, of course, is on your new venture. So it's pretty good to see that we have identified a high-growth area to enter into.

Abhisar Jain: Right. Sir, the next of course is on your new venture. Pretty good to kind of see that we have identified a high growth area to enter into. Just a few thoughts I want to get from you. First is that, how did you kind of narrow down to this product of battery separator film, and how long have you guys been researching or analyzing on this opportunity before you could zero in on this? For the technology, whatever involved, you have mentioned that it is building on group's capabilities already, and it's a strategic fit. But just still checking on the tech side, do you need a tech partner here or a tech transfer, or it would be in-house and based on whatever analysis you would have done? You're pretty confident on kind of manufacturing this in one go.

Speaker #2: So, just a few thoughts I want to get from you. First is, how did you kind of narrow down to this product of battery separator film, and how long have you guys been researching or analyzing this opportunity before you could zero in on it?

Speaker #2: And for the technology, whatever is involved, you have mentioned that it is building on the Group's capabilities already and it's a strategic fit. But just still checking on the tech side—do you need a tech partner here, or a tech transfer, or would it be in-house? And based on whatever analysis you have done, are you pretty confident about kind of manufacturing this in one go?

Saket Kanoria: Okay. I'm Saket Kanoria, I can answer this question.

Speaker #4: Okay, I’m Sakeet Kanuria. I can answer this question. So, on the Group side, we have always been looking for opportunities, and there was, many years ago, an opportunity to invest in BOPP and polyester film.

Abhisar Jain: Okay, sir.

Saket Kanoria: On the group side, we have been always looking for opportunities, and there was many years ago, opportunity to invest in BOPP and polyester film. We felt that that is more commoditized and will get increasingly commoditized. We were not interested in investing in such an opportunity. Here, when we have been meeting lots of people, and there are a lot of business associates who are connected with us, we come to know that the battery business in India is expected to grow leap and bound. Ultimately, we will vie to be near where China is today, maybe in 5, 10 years. There is this polymer film which is used within the cell, so it fit in very well with our philosophy, which is to make value-added materials.

Speaker #4: And we felt that that is more commoditized and will get increasingly commoditized, so we were not interested in investing in such an opportunity. But here, when we have been meeting lots of people and there are a lot of business associates who are connected with us, we have come to know that the battery business in India is expected to grow by leaps and bounds, and ultimately we will have to be near where China is today, maybe in 5 or 10 years.

Speaker #4: And there is this polymer film, which is used within the cell. So it fit in very well with our philosophy, which is to make value-added materials.

Speaker #4: And that led to a lot of research and a lot of visits to countries outside India to meet so many such product manufacturers, machine suppliers, et cetera.

Saket Kanoria: That led to a lot of research and a lot of visits to countries outside India and to meet so many such product manufacturers, machine suppliers, et cetera. That's how we have narrowed it down. As far as the technology is concerned, we understand these materials very well. Over the years, TCPL has got into many new fields. I would say that almost in every field we've got into, we are easily amongst the best in terms of the technology. We started the company in the '90s producing tobacco cartons. Then we got into folding cartons, then we got into paper cup, we got into cylinder engraving, we got into flexible packaging, we got into tipping paper, we got into shrink sleeve, we even got into ink business. I think each of these are specialized technologies where we have done very well with respect to the technology.

Speaker #4: And that's how we have narrowed it down. As far as the technology is concerned, we understand these materials very well, and over the years, TCPL has entered many new fields.

Speaker #4: And I would say that in almost every field we've gotten into, we are easily among the best in terms of technology. We started the company in the ’90s producing tobacco cartons.

Speaker #4: Then we got into folding cartons. Then we got into paper cups. We got into cylinder engraving. We got into flexible packaging. We got into tipping paper.

Speaker #4: We got into shrink sleeve. We even got into the ink business. I think each of these specialized technologies—where we have done very well with respect to the technology; in some, we are the leader—but nowhere are we a follower in terms of technology or in terms of product quality.

Saket Kanoria: In some we are the leader, but nowhere we are follower in terms of technology or in terms of product quality. That gives us the confidence to assemble a top-class team and be able to execute this venture to be able to match expectations of customers who are going to be very demanding. Because at the end of the day, it is in the battery, where it is a very unforgiving business. I hope that answers your question.

Speaker #4: So that gives us the confidence to assemble a top-class team and be able to execute this venture to match the expectations of customers, who are going to be very, very demanding.

Speaker #4: Because at the end of the day, it is in the battery where it is a very unforgiving business. So I hope that answers your question.

Speaker #2: Yeah, so very, very helpful, sir. Pretty clear. And just a follow-up on this: in this project, do you have any indication you can give us in terms of the investment that we are making? How much would be the asset terms for phase one, and what kind of margins are there in this product?

Abhisar Jain: Yeah, sir. Very helpful, sir. Pretty clear. Just a follow-up on this, that in this project, do you have the indication that you can give us in terms of on the investment that we are making, how much would be the asset turns for the phase 1 and what kind of margins are there in this product?

Speaker #4: So in phase one, the thing is that we are building infrastructure so that in the future, when we expand as we have indicated, our vision is to make 500 million square meters.

Saket Kanoria: So the phase 1, the thing is that we are building infrastructure so that in future when we expand, as we have indicated, our vision is to make 500 million square meter. So we are buying the land, a big parcel, which we will do in phase 1. It is not fair to actually compare the asset turn, but still we expect pretty good margin, top line of between INR 150 to 200 crore on this first phase investment.

Speaker #4: So, we are buying the land—a big parcel—which we will do in phase one. So, it's not fair to actually compare the asset term, but still, we expect pretty good margin, top line of between ₹150 to ₹200 crore.

Speaker #4: On this first phase investment.

Speaker #2: And margins?

Abhisar Jain: And margins?

Speaker #4: It will be sorry?

Saket Kanoria: It will be. Sorry?

Speaker #2: And margins? Margins will be?

Abhisar Jain: And margins? Margins will be

Speaker #4: Margin will follow—let's see. But I think it will be in a good double-digit number.

Saket Kanoria: Margins will follow. Let's see. I think it will be in a good double-digit number.

Speaker #2: Understood, sir.

Abhisar Jain: Understood, sir.

Speaker #3: If you either return arithmetic on this, from what our calculation meets very well our criteria as a company, so definitely this is—I mean, if it works out well, it can be more attractive than existing returns for sure.

Akshay Kanoria: Actually, the return arithmetic on this from what our calculation meets very well our criteria as a company. So definitely this is. If it works out well, it can be more attractive than our existing returns for sure.

Speaker #4: Yes, because it's a very specialized field.

Saket Kanoria: Yes, because it is a very specialized field.

Speaker #3: Yeah.

Akshay Kanoria: Yeah.

Speaker #2: Sure, sir. Understood. Thank you, sir. I have more questions, but I'll fall back in the queue so that I can save time. Thank you so much.

Abhisar Jain: Sure, sir. Understood. Thanks, sir. I have more questions, but I will fall back in the queue so that others have the chance. Thank you so much.

Speaker #4: Okay, thank you. Thank you.

Saket Kanoria: Okay, thank you.

Akshay Kanoria: Thank you.

Speaker #1: Thank you. The next question comes from the line of Danish Mistry with Eternity Investment Management LLP. Please go ahead.

Operator: Thank you. The next question comes from the line of Danish Mistry with Eternity Investment Management LLP. Please go ahead.

Speaker #5: Hello, sir. Hi. Congratulations on a good set of numbers. Sir, just one question. Your interest costs were lower—was that a function of lower debt?

Danesh Mistry: Hello, sir. Hi. Congratulations on a good set of numbers. Sir, just one question. Your interest costs were lower. Was that a function of lower debt? If so, what is your current debt outstanding, sir?

Speaker #5: And if so, what is your current outstanding debt, sir?

Speaker #3: Yeah, so you're

Saket Kanoria: Last year you are comparing with June last year. Compared to June last year, we had a FOREX hit in that quarter, which was mentioned in the previous year's results. Therefore the comparison in this quarter is not strictly correct.

Speaker #4: comparing with June, last year. So compared to June last year, we had a Forex hit in that quarter, which was mentioned in the previous year's results.

Speaker #4: And therefore, the comparison in this quarter is not strictly correct.

Speaker #5: So, this quarter—okay, okay. Got it.

Akshay Kanoria: This quarter is a-

Akshay Kanoria: More normalized quarter.

Danesh Mistry: Okay. Got it.

Speaker #3: This is a more normal cost this quarter. Last year, in that same quarter, there was a one-time large hit that we had to take on the mark-to-market loss.

Akshay Kanoria: This is a more normal cost this quarter. Last year, that same quarter, there was a one-time large hit that we had to take on the mark-to-market loss.

Speaker #5: Understood. And when do you think phase one will be up for the...

Danesh Mistry: Understood. When do you think phase 1 will be up for the new business?

Speaker #3: For the new business, sir?

Speaker #5: Yeah. So our target is to commercialize by Q4 FY28, so January or February 2028 is our goal. All right, sir. Thank you very much and wish you the very best of luck.

Saket Kanoria: Our target is to commercialize by Q4 FY28. Say January, February 2028 is our target.

Danesh Mistry: All right, sir. Thank you very much and wish you the very best of luck. Thank you.

Speaker #5: Thank you.

Speaker #3: Thank you.

Akshay Kanoria: Thank you.

Speaker #1: Thank you. Our next question comes from the line of Rohan with Incred. Please go ahead.

Operator: Thank you. Our next question comes from the line of Rohan with InCred. Please go ahead.

Speaker #6: Yeah, hi team. Congrats on a strong set of numbers for the quarter. Just to dive into the numbers here, how was the growth profile in terms of the domestic business?

[Analyst] (Incred): Yeah. Hi, team. Congrats on a strong set of numbers for the quarter. Just to dive into the numbers here, how was the growth profile in terms of the domestic business? Any color you can give on volume and price growth during the quarter? How are exports trending this quarter as well?

Rohan Kalle: Yeah. Hi, team. Congrats on a strong set of numbers for the quarter. Just to dive into the numbers here, how was the growth profile in terms of the domestic business? Any color you can give on volume and price growth during the quarter? How are exports trending this quarter as well?

Speaker #6: Can you provide any insight on volume and price growth during the quarter? Additionally, how did exports trend this quarter?

Speaker #3: Yes, hello. So, we did have growth in both domestic and export for the quarter, and the domestic growth was much higher than our export growth, at a good double-digit clip.

Akshay Kanoria: Yes, hello. We did have a growth in both domestic and export for the quarter. The domestic growth was much higher than our export growth, at a good double digit clip, and the export was also not bad. Overall, we are quite pleased with the mix. In terms of the volume value split, it was a little bit more value and a little bit less volume. But even the volumes were in a good high single digit number. Overall, we were quite happy and it was very broad based sort of growth.

Speaker #3: And the export was also not bad. So overall, we are quite pleased with the mix. In terms of the volume-value split, it was a little bit more value and a little bit less volume, but even the volumes were in a good high single-digit number.

Speaker #3: So overall, we were quite happy, and it was very broad-based sort of growth.

Speaker #6: Just a follow-up here: with exports coming back into positive, which regions would have driven this?

[Analyst] (Incred): Just a follow-up here, the export coming back into positive, which regions would have driven this?

Rohan Kalle: Just a follow-up here, the export coming back into positive, which regions would have driven this?

Speaker #3: That detail we don't share, of course, but basically last year, I think the same quarter was particularly a poor quarter. And so this year, there's a bit of normalization. But I would say that we were a little pessimistic going into the quarter, but it turned out to be all right.

Akshay Kanoria: That detail we don't share, of course. But basically last year, I think at the same quarter was particularly a poor quarter. So this year was a bit of a normalization, but I would say that we were a little pessimistic going into the quarter. But it turned out to be all right.

Speaker #6: Got it. Just a few questions on the expansions that you've announced. At the 500 million square meter mark, what kind of revenue potential do you see?

[Analyst] (Incred): Got it. Just a few questions on the expansions that you've announced. At the 500 million square meter mark, what kind of revenue potential do you see?

Rohan Kalle: Got it. Just a few questions on the expansions that you've announced. At the 500 million square meter mark, what kind of revenue potential do you see?

Speaker #3: Vidur?

Akshay Kanoria: Vidur?

Speaker #4: Yeah. So, hi. It would follow a similar trend to our Phase One figure in terms of the revenue. The guidance we had given for that was around ₹150 to ₹200 crores.

Vidur Kanoria: Yeah. So, hi. It would follow a similar trend to our phase 1 figure in terms of the revenue. So the guidance we had given for that was around INR 150 to 200 crores. So, for this, it is tough to give a figure, but somewhere around INR 1,100, 1,200 crore I think would be a fair estimate for now, although we do not know exactly how the prices would be trending at that time. But eventually it could be between INR 1,200, 1,300 crore, something around that.

Speaker #4: So for this, I mean, it's tough to give a figure, but somewhere around 1,100 or 1,200 crore, I think, would be a fair estimate for now.

Speaker #4: Although we don't know exactly how prices would be trending at that time, eventually it could be between 1,200 and 1,300 crore, something around that.

Speaker #6: Sure. And in terms of, from a mode perspective, what kind of structural advantages would we have in this space? Is it something that would be largely an import substitution angle for domestic ACC players under the PLIC, or is there also a strong export angle that you see here?

[Analyst] (Incred): Sure. And in terms of from a mode perspective, what kind of structural advantages would we have in this space? Is it something that will be largely an import substitution angle for domestic ACC players under the PLI scheme, or is there also a strong export angle that you see here?

Rohan Kalle: Sure. And in terms of from a mode perspective, what kind of structural advantages would we have in this space? Is it something that will be largely an import substitution angle for domestic ACC players under the PLI scheme, or is there also a strong export angle that you see here?

Speaker #4: So, we are open to both. Our primary focus is to look at fulfilling the needs of domestic cell manufacturers, and that's where we see tremendous growth about to happen—probably faster than other places in the world.

Vidur Kanoria: We are open to both. Our primary focus is to look at fulfilling the needs of domestic cell manufacturers, and that is where we see a tremendous growth about to happen, probably faster than other places in the world. So our primary focus is to support the government initiatives to boost cell manufacturing domestically. As we learn, as we go on, we also definitely will look at export opportunities. But like I said, of course, to fulfill the ACC ecosystem in India, we are very much focused on that.

Speaker #4: So, our primary focus is to support the government initiatives to boost cell manufacturing domestically. As we learn and go on, we will also definitely look at export opportunities.

Speaker #4: But like I said, of course, to fulfill the ACC ecosystem in India, we are very much focused on that.

Speaker #3: Yeah, and then once we can prove our chops in India, then I think the world market can open up. It depends very much on the geopolitical environment at the time.

Akshay Kanoria: Yeah. Then once we can prove our chops in India, then I think the world market can open up. It depends very much on the geopolitical environment at the time.

Speaker #6: You're right. And in terms of the qualification timelines, how long does it take to, let's say, get a new customer on board here?

[Analyst] (Incred): Right. In terms of the qualification timelines, how long does it take to get a new customer on board here?

Rohan Kalle: Right. In terms of the qualification timelines, how long does it take to get a new customer on board here?

Speaker #4: Yeah, so as far as the separator is concerned, what we understand from various cell makers is that the qualification timeline is slightly faster than for other materials, like the anodes and cathodes.

Vidur Kanoria: Well, as far as the separator is concerned, what we understand from various cell makers is that the qualification timeline is slightly faster than the other materials like the anodes and cathodes. I think we are well placed here, but we are of the mindset that it will take us at least a year to scale up for sure. The first year, which is FY28, FY29, that year we do expect we will go in qualification testing and then starting commercial supply to different clients along that period. We also need to see how fast they are able to set up their factories and scale up. It is dependent on many factors, but we are patient and we will play the long game when it comes to that.

Speaker #4: So, I think we're well placed here, but we are of the mindset that it will take us at least a year to scale up for sure.

Speaker #4: So the first year, which is FY28–29, that year we do expect will go into qualification testing, and then starting commercial supply to different clients along that period.

Speaker #4: And we also need to see how fast they are able to set up their factories and scale up. So, it's dependent on many factors.

Speaker #4: But we are patient, and we'll play the long game when it comes to that. And that's something we can totally accept as well, given that it's going into critical components like EVs and energy storage systems.

Vidur Kanoria: That is something that we can totally accept as well, being that it is going into critical components like EVs and energy storage systems.

Speaker #6: Right. Just one last question from my end. Firstly, on FY27, any guidance on growth and margins? And broadly, over the next four to five years, considering this new business that we'd be doing, what kind of revenue mix do you envisage across, let's say, folding cartons, flexible, and the separator films?

[Analyst] (Incred): Right. Just the last one from my end. Firstly, on FY27, any guidance on growth and margins? Broadly over the next four or five years, considering this new business also that we will be doing, what kind of revenue mix do you envisage across, let us say, folding cartons, flexible and the separator films?

Rohan Kalle: Right. Just the last one from my end. Firstly, on FY27, any guidance on growth and margins? Broadly over the next four or five years, considering this new business also that we will be doing, what kind of revenue mix do you envisage across, let us say, folding cartons, flexible and the separator films?

Speaker #3: So we see the kind of historic trend continuing. To give guidance is challenging in the current environment with so many factors out of control, but generally speaking, it's looking quite positive from where we sit today.

Akshay Kanoria: We see the kind of historic trend continuing. To give guidance is a little challenging in the current environment with so many factors out of control. Generally speaking, it is looking quite positive from where we sit today. For the domestic as well as export, overall is all right. Margins follow the top line typically. Over the next four or five years, the separator is going to be a long term story. Once this scale and all really picks up, it will take a few years. For the foreseeable future, the packaging business is definitely going to be the major driver of revenues as well as of growth. Four, five years down the line, let's see. The world number one company in this separator business was a packaging company 10 years ago with a very similar profile to what we are today.

Speaker #3: For the domestic as well as export, overall it is all right. Margins typically follow the top line. Over the next four to five years, see, the separator is going to be a long-term story.

Speaker #3: So, once this scales and really picks up, it will take a few years. So, for the foreseeable future, the packaging business is definitely going to be the major driver of revenues as well as of growth.

Speaker #3: But yeah, four or five years down the line, let's see. The world number one company in this separator business was a packaging company ten years ago.

Speaker #3: With a very similar profile to what we are today. And today, I think their separator business must be 20 times or something like that compared to their packaging business.

Akshay Kanoria: Today, I think their separator business must be 20 times or something, their packaging business. We do not know where this can go. Let's see.

Speaker #3: So, we don't know where this can go. Let's see.

Speaker #6: Sure. All right. Thanks, sir. I'll get back in a few minutes.

[Analyst] (Incred): Sure. All right. Thanks. I will get back in queue.

Rohan Kalle: Sure. All right. Thanks. I will get back in queue.

Speaker #5: Thank you. Before we take the next question, a reminder to all participants: you may press star, then one, to ask a question.

Operator: Thank you. Before we take the next question, a reminder to all the participants, you may press star and then 1 to ask a question. The next question comes from the line of Pawan Kumar with RatnaTraya Capital. Please go ahead.

Operator: Thank you. Before we take the next question, a reminder to all the participants, you may press star and then 1 to ask a question. The next question comes from the line of Pavan Kumar with RatnaTraya Capital. Please go ahead.

Speaker #5: The next question comes from the line of Pawan Kumar with Ratna Triad Capital. Please go ahead.

Speaker #2: Sir, can you first outline what the non-separator capex is for, let's say, FY27 and FY28? What is the capex we are expected to spend?

Pawan Kumar: Sir, can you first outline what is the non-separator CapEx for, let's say, FY27 and FY28? What is the CapEx we are expected to spend?

Pavan Kumar: Sir, can you first outline what is the non-separator CapEx for, let's say, FY27 and FY28? What is the CapEx we are expected to spend?

Speaker #3: In FY27, we have about 100 crore budget. And this does not include the separator. The separator spend will be over the course of the next one and a half years.

Akshay Kanoria: In FY27, we have about INR 100 crore budget.

Akshay Kanoria: This does not include the separator. The separator spend will be over the course of the next one and a half years.

Speaker #3: So this year, it will probably be more like the land cost, and then everything else will pretty much be in next year's cost. So, this will go up based on the separator announcement by maybe Rs. 30–40 crore.

Pawan Kumar: Right

Pavan Kumar: Right

Akshay Kanoria: It will be probably more like the land cost, then everything else will pretty much be in next year's cost. This will go up based on the separator announcement by maybe.

Akshay Kanoria: It will be probably more like the land cost, then everything else will pretty much be in next year's cost. This will go up based on the separator announcement by maybe. 30, 40 crore. Between INR 100, 150 would.

Akshay Kanoria: 30, 40 crore. Between INR 100, 150 would.

Speaker #3: Yeah. So between 100, 150.

Speaker #2: And FY28 will also be a similar number or maybe less?

Pawan Kumar: FY28 will also be a similar number or maybe lesser?

Pavan Kumar: FY28 will also be a similar number or maybe lesser?

Speaker #3: No, FY28 from now, we don't know because it depends on how our carton business goes. We're keeping some space this year. That's what some of the capex is for—enabling capex next year.

Akshay Kanoria: No, FY28 from now, we do not know because it depends on how our carton business goes. We are keeping some space this year. That is what some of the CapEx is for enabling CapEx next year. There will be at least similar CapEx and maybe more. Not certain.

Speaker #3: So, there will be at least similar capex and maybe more—not certain.

Speaker #2: Okay. And Akshay, did I understand it right? For this particular separator project, we don't require any outside technology transfers for the same. Is that right?

Pawan Kumar: Okay. Akshay, did I understand it right? For this particular separator project, we do not require any outside technology transfers or the same. Is that right?

Pavan Kumar: Okay. Akshay, did I understand it right? For this particular separator project, we do not require any outside technology transfers or the same. Is that right?

Speaker #2: Understanding?

Speaker #3: So, we already sort of answered that question, but basically, we are developing technology from various sources and conducting our own R&D and development. And this is a TCPL product which we'll be selling.

Akshay Kanoria: We already sort of answered that question, but basically we are developing technology from various sources and doing our own R&D and development, and this is a TCPL product which we will be selling.

Speaker #2: Okay, got it. And one last question on the margins side: have the incremental pricing increases in terms of raw materials been passed on to the customers, or is there still some pricing yet to be passed on?

Pawan Kumar: Okay, got it. One last question on the margin side. Have the incremental pricing in terms of raw materials been passed on to the customers, or is there still some pricing to be passed on?

Pavan Kumar: Okay, got it. One last question on the margin side. Have the incremental pricing in terms of raw materials been passed on to the customers, or is there still some pricing to be passed on?

Speaker #3: So there is typically something of a lag when it comes to price increases being passed on. It's a bit of a difficult calculation because we always have some stocks, and stocks on order and everything.

Akshay Kanoria: There is typically something of a lag when it comes to price increases being passed on. It is a bit of a difficult calculation because we always have some stocks and stocks on order and everything. Whenever the price increase goes up, gets initiated, then it takes over a quarter, it gets passed through. That is what has happened. Yeah.

Speaker #3: Whenever the price increase goes up, gets initiated, then it takes over a quarter, it gets passed through. So that's what has happened. Yeah.

Speaker #2: Okay, but basically the EBITDA margin would not be maintained if you didn't pass it through. So, right.

Saket Kanoria: Okay.

Saket Kanoria: Okay. Basically the EBITDA margin would not be maintained if you did not pass it through.

Saket Kanoria: Basically the EBITDA margin would not be maintained if you did not pass it through.

Akshay Kanoria: Yeah.

Speaker #3: Yeah, so it's a bit of, yeah.

Saket Kanoria: Right.

Saket Kanoria: It's a bit of. Yeah.

Speaker #2: Okay. Got it. Got it. Thank you. Thanks.

Pawan Kumar: Okay. Got it. Thank you. Thanks.

Pavan Kumar: Okay. Got it. Thank you. Thanks.

Speaker #3: Thank you.

Akshay Kanoria: Thank you.

Speaker #5: Thank you. Your next question comes from the line of Raman K. V. with Cequint Investments. Please go ahead.

Operator: Thank you. Your next question comes from the line of Raman KV with Sequent Investments. Please go ahead.

Speaker #3: Sorry, what was the name of the company? Cequint?

Akshay Kanoria: Sorry, what was the name of the company? Sequent?

Speaker #5: Cequint, yes, sir.

Operator: Sequent, yes, sir.

Speaker #3: Okay.

Akshay Kanoria: Okay.

Speaker #2: Hello? Can you hear us, sir?

Raman Venkata Kerti: Hello, can you hear us, sir?

Speaker #3: Yeah.

Akshay Kanoria: Yeah.

Speaker #2: Sir, I'm so sorry. I joined the call a little late. I just want to understand this lithium-ion separator film business. What will we be doing once we start commercialization?

Raman Venkata Kerti: Sir, I am so sorry. I joined in the call a little late. I just want to understand this lithium ion separator film business. What we will be doing once we start commercialize, one is that. Second, how will the margin difference from our existing business versus this new line of business?

Speaker #2: One is that. And second, how is the margin different from our existing business versus this new line of business?

Speaker #3: Yeah, so I would refer you to the presentation and press release. There are more details in those, which you can go through at length. But basically, this is a critical component of the lithium-ion battery which separates.

Akshay Kanoria: Yeah. I would refer you to the presentation and press release. There's more details in that which you can go through at length. Basically, this is a critical component of the lithium ion battery, which separates, that's why it's called separator. It separates the anode and the cathode and regulates the charge and discharge cycle. We will be making that film in a phase-wise manner. The margin difference, as we said earlier, that we can't give an exact margin right now, but basically in this first phase as well, we expect a good double-digit margin as well as double-digit return on investment and capital, and eventually this can scale up substantially.

Speaker #3: That's why it's called a separator. It separates the anode and the cathode, and regulates the charge and discharge cycle. And we will be making that film.

Speaker #3: In a phase-wise manner, the margin difference, as we said earlier—we can't give an exact margin right now—but basically, in this first phase as well, we expect a good double-digit margin, as well as a double-digit return on investment and capital.

Speaker #3: And eventually, this can scale up substantially.

Raman Venkata Kerti: Hello, can you hear me?

Speaker #2: So, hello. Can you hear me?

Speaker #3: Yeah, of course.

Akshay Kanoria: Yeah, of course.

Speaker #2: So yeah, can you at least say whether it will be in line with our existing margins, or much better than the existing margins?

Raman Venkata Kerti: Can you at least say whether it will be in line with our existing margin or much better than the existing margin?

Speaker #3: So we're doing this in a phased manner. Right now, for example, we're incurring a lot of upfront cost on the land and all, which will be for the next five to six years' requirement in one shot.

Akshay Kanoria: We are doing it in a phase-wise manner. Right now, for example, we are incurring a lot of upfront cost on the land and all, which will be for the next 5, 6 years requirement in one shot. But definitely, we are looking at a better return on capital or investment than our existing business. Otherwise, it would not be sensible.

Speaker #3: But definitely, I mean, we are looking at a better return on capital or investment than our existing business. Otherwise, it wouldn’t be sensible.

Speaker #2: Understood. Please answer my last question with respect to the growth. I think after five or six quarters, we have delivered double-digit growth. I just want to understand where we are witnessing the demand from.

Raman Venkata Kerti: Understood. My last question is with respect to the growth. I think after 5 or 6 quarters, we delivered a double-digit growth. I just want to understand, where are we witnessing the demand from, and going forward, is this demand sustainable?

Speaker #2: And is this, going forward, is this demand sustainable?

Speaker #3: So there's a mix of volume and value. The volume is a bit higher in terms of the domestic segment. We are seeing good volume growth as well.

Akshay Kanoria: There is a mix of volume and value. The volume is a bit more in terms of the domestic, we are having a good volume growth as well. Overall, I think the demand has improved in India and the kind of volume growth that our customers have also improved. The export is also, last year was a poor year for export. This year we hope for some recovery, and so far it has been all right. It is a mix, and our flexible packaging business has grown very strongly as well, hence the CapEx in that business this year. It is a mix. Overall, it is a broad-based growth. I think everything has grown, but our flexible business has grown a little faster.

Speaker #3: So overall, I think the demand has improved in India, and the kind of volume growth that our customers have has also improved. The export is also—we have sort of—like last year was a poor year for export.

Speaker #3: So this year, we hope for some recovery, and so far, it's been all right. So it's a mix. And our flexible packaging business has grown very strongly as well.

Speaker #3: Hence, the capex in that business this year. So it's a mix. So overall, it's broad-based growth. I think everything has grown.

Speaker #3: But, like, our flexible business has grown a little faster.

Speaker #2: And so, the second part is, is the growth sustainable?

Raman Venkata Kerti: Is the growth sustainable?

Speaker #3: I mean, yeah. Yeah, we feel so. We don't see any—I mean, if there's another war somewhere, we don't know. But the Indian domestic demand is definitely sort of recovering, I think.

Akshay Kanoria: Yeah. We feel so. If there is another war somewhere, we do not know what is going to happen. But the Indian domestic demand is definitely sort of recovering. I think we can see that in the numbers everywhere.

Speaker #3: We can see that in the numbers everywhere.

Speaker #2: Understood. Thank you. Thank you so much, sir.

Raman Venkata Kerti: Understood. Thank you so much, sir.

Speaker #5: Thank you. Your next question comes from the line of Richa Agarwal with Equity Master. Please go ahead.

Operator: Thank you. The next question comes from the line of Richa Agarwal with Equitymaster. Please go ahead.

Speaker #6: Hi, am I audible? Hello, am I audible? Yeah. Hi, thank you for the opportunity. Sir, I'm new to this company. My query was related to this news of the ban—that plastic ban which has come in the case of pan masala and could come for further products as well.

Richa Agarwal: Hi, am I audible?

Akshay Kanoria: Yes.

Richa Agarwal: Hello, am I audible? Yeah. Hi. Thank you for the opportunity. Sir, I'm new to this company. My query was related to the news of ban, that plastic ban which has come in case of pan masala and could come for other products as well. Does it have any implication for your business in the sense, does it open new opportunities for TCPL Packaging?

Speaker #6: I mean, does it have any implication for your business? In that sense, does it open new opportunities for TCPL Packaging?

Speaker #2: Plastics have always been banned in Pan Masala. Nothing new. This latest notification is misleading, and it has more to do with some other structural change in the Pan Masala packaging.

Saket Kanoria: Plastics were always banned on pan masala, nothing new. This latest notification is misleading, and it is more to do with some other structural change in the pan masala packaging. Our business may be marginally affected in the very short term, but we are not a major supplier for pan masala segment.

Speaker #2: But our business may be marginally affected in the very short term, but we're not a major supplier for the Pan Masala segment.

Speaker #6: Okay. Okay. Thank you.

Richa Agarwal: Okay. Thank you.

Speaker #5: Thank you. Your next question comes from the line of Nitesh Rege with Chris Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Nitesh Rege with ChrysCapital. Please go ahead.

Speaker #2: Yeah. Hi. Thank you for the opportunity. So, Akshay, there were some news articles on this battery component ecosystem and the PLI. So,

Nitish Rege: Yeah. Hi, thank you for the opportunity. Akshay, there were some news articles on this battery component ecosystem and the PLI.

Speaker #5: Sorry to interrupt, Nitesh Sir. Your voice is not clear.

Operator: Sorry to interrupt there, Nitesh, your voice is not clear.

Speaker #3: Can you repeat the name?

Akshay Kanoria: Can you repeat that again?

Speaker #2: Nitesh Rege: Hello. Is it better?

Operator: Is it better now?

Nitish Rege: Nitish Rege.

Operator: Hello, is it better?

Nitish Rege: Hello, is it better?

Speaker #3: Yeah. Yeah.

Akshay Kanoria: Yeah.

Speaker #2: Yeah. So, there were news articles on battery component ecosystems and a PLI. So, with this new subsidiary, will we be getting PLI benefits here?

Nitish Rege: There were news articles on battery component ecosystems and a PLI. Does this new subsidiary, will we be getting PLI benefits here?

Speaker #3: There has been a lot of news and discussion about PLI being launched for battery materials. So far, the government has not formalized any scheme.

Akshay Kanoria: There has been a lot of news and discussion about PLI being launched for battery materials. So far, the government has not formalized any scheme, and they have not opened any application. Beyond that, then we will have to discuss when the time for that comes. Otherwise, I wouldn't want to speculate on anything for a policy that's not there yet.

Speaker #3: And they have not opened any application. Beyond that, we will have to discuss it when the time comes. Otherwise, I wouldn't want to speculate on anything related to a policy that's not there yet.

Speaker #2: Okay. And just as you said, we are building this technology in-house. Do we have the capability? Because this would be a much higher technology requirement than what we are generally used to, right?

Nitish Rege: Okay. As you said that we are building this technology in-house, do we have the capability because this would be a much higher technology requirement, right, than what we are generally used to? The capacity-

Speaker #3: So, we've already answered that question, and I would refer you back to the previous answer. But yes, certainly, we are confident; otherwise, we wouldn't be taking this investment.

Akshay Kanoria: We have already answered that question. I would refer you back to the previous answers. Yes, certainly we are confident otherwise we wouldn't be taking this investment.

Nitish Rege: Understood. Thank you.

Speaker #2: Understood. Thank you.

Speaker #5: Thank you. Your next question comes from Bhavesh with GV Investment Advisors. Please go ahead.

Operator: Thank you. The next question comes from Bhavesh with Devii Investment Advisors. Please go ahead.

Speaker #4: Yeah. Hello, Arun. Hi. Could you touch upon the global players and also the domestic players who are in the separator business?

Bhavesh: Yeah. Hello.

Bhavesh Jain: Yeah. Hello.

Akshay Kanoria: Yeah. Hi.

Bhavesh: Yeah. Hi. Can you touch upon the global players or also the domestic players who are into this separator business?

Bhavesh Jain: Yeah. Hi. Can you touch upon the global players or also the domestic players who are into this separator business?

Speaker #3: Right now, nobody. Vidur, why don't you answer? But I think there's nobody today in India who's manufacturing this material, and nobody who has announced any plan to manufacture either.

Akshay Kanoria: Right now, nobody. Vidur, why don't you answer? I think there's nobody today in India who's manufacturing this material.

Vidur Kanoria: Yeah

Akshay Kanoria: nobody who has announced any plan to manufacture either.

Speaker #2: Yeah, so there are manufacturers of separators for lead-acid batteries, but for lithium-ion batteries today, there's no capacity online. So, from what we understand, there's obviously people who are looking at it.

Vidur Kanoria: Yes. There are manufacturers of separators for lead-acid batteries, but for lithium-ion battery today, there is no capacity online. From what we understand, there are obviously people who are looking at it and existing lead-acid separator manufacturers as well, some of them. But nothing has been announced and there is no commercial production in operation today in terms of competitors for lithium-ion battery separator. Yes.

Speaker #2: And the existing lead-acid separator manufacturers as well are some of them. But nothing has been announced. And there's no commercial production in operation today in terms of competitors for lithium-ion battery separators.

Speaker #2: So yeah.

Speaker #4: So, for the domestic market, right? And what about the international market—like, how many players are there?

Bhavesh: This is for domestic market, right? What about the international market? How many players are there?

Bhavesh Jain: This is for domestic market, right? What about the international market? How many players are there?

Vidur Kanoria: Yes. International market is more fragmented. There are a lot of players, it is

Akshay Kanoria: Yes. International market is more fragmented. There are a lot of players, it is tough to give you a number. The majority of the players are, of course, like all other battery materials, focused in China, Korea, and Japan, with China being the lead player. So there are multiple in China. It is not dominated by one, two, or three companies. So there are a lot of manufacturers in these countries.

Speaker #2: The international market is more fragmented. There are a lot of players. It's tough to give you a number. The majority of the players, like with all other battery materials, are focused in China, Korea, and Japan, with China being the lead player.

Akshay Kanoria: Tough to give you a number. The majority of the players are, of course, like all other battery materials, focused in China, Korea, and Japan, with China being the lead player. So there are multiple in China. It is not dominated by one, two, or three companies. So there are a lot of manufacturers in these countries.

Speaker #2: So, there are multiple manufacturers in China. It's not dominated by just one, two, or three companies. So, there are a lot of manufacturers in these countries.

Speaker #4: Okay, understood. Thank you so much.

Vidur Kanoria: Okay, understood. Thank you so much.

Bhavesh Jain: Okay, understood. Thank you so much.

Speaker #5: Thank you. Your next question comes from the line of Jayesh Rauf with Cask Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Jay Shroff with Cass Capital. Please go ahead.

Speaker #2: Hi. Thanks for giving me the opportunity. I just wanted to ask about our capex that we are going to do in terms of flexible packaging. So, a few years ago, we experimented with Innofilms, which was a single-layer recyclable packaging.

Jay Shroff: Hi. Thanks for giving me the opportunity. I just wanted to ask our CapEx that we are going to do in terms of flexible packaging. So a few years ago, we experimented with TCPL Innofilms, which was a single-layer recyclable packaging. So is the new CapEx on that lines, or is it the traditional flexible packaging lines that we have?

[Analyst]: Hi. Thanks for giving me the opportunity. I just wanted to ask our CapEx that we are going to do in terms of flexible packaging. So a few years ago, we experimented with TCPL Innofilms, which was a single-layer recyclable packaging. So is the new CapEx on that lines, or is it the traditional flexible packaging lines that we have?

Speaker #2: So, is the new capex on that line, or is it the traditional flexible packaging lines that we have?

Speaker #3: It's on the traditional flexible packaging.

Akshay Kanoria: It is on the traditional flexible packaging.

Speaker #2: Okay.

Jay Shroff: Okay.

[Analyst]: Okay.

Speaker #3: Not on the PE film again.

Akshay Kanoria: Not on the PE film making.

Speaker #2: Okay, so what is the update on that line of business? Because I think before we merged that company into the parent, I think that was not doing too well.

Jay Shroff: Okay. What is the update on that line of business? Because, I think before we merged that company into the parent, I think that was not doing too well, I mean, in terms of technology. Any update there?

[Analyst]: Okay. What is the update on that line of business? Because, I think before we merged that company into the parent, I think that was not doing too well, I mean, in terms of technology. Any update there?

Speaker #2: I mean in terms of technology, so any update there?

Speaker #3: So, originally, we had some issues with the machine, but that got solved some time ago. Now, there is no problem in terms of technology, performance, or anything regarding the product.

Akshay Kanoria: Well, originally we had some issues with the machine, but that got solved some time ago, and now there is no problem in terms of technology or the performance or anything of the product. There is no concern. Concern is more that brand owners are not adopting the change towards mono-material packaging with the kind of speed that we were expecting when we put the investment.

Speaker #3: There is no concern. The concern is more that brand owners are not adopting the change towards mono-material packaging with the kind of speed that we were expecting when we made the investment.

Speaker #2: But overall, now this line is doing quite well.

Vidur Kanoria: But overall, now this line is doing quite well.

Speaker #3: Yes.

Speaker #2: And I think it is justifying the investment we have made, both for the internal and external market.

Akshay Kanoria: Yes.

Vidur Kanoria: And I think it is justifying the investment we have made, both for internal and external market.

Speaker #3: It's also a very good marketing tool for us because, as a company, there is a good differentiation which we can show to customers. Even if this is a smaller part of their buying, still, it's a very critical future sort of requirement which every customer knows that they're going to have to adopt at some point.

Akshay Kanoria: It is also a very good marketing tool for us because as a company, there is a good differentiation, which we can show to customers. Even if this is a smaller part of their buying, still it is a very critical future sort of requirement, which every customer knows that they are going to have to adopt at some point.

Speaker #2: Okay, I just asked because most of the FMCG companies, at least on paper, have this target of having fully sustainable packaging by 2030.

Jay Shroff: Okay. I just asked because most of the FMCG companies, at least on paper, they have this target of having full sustainable packaging by 2030. I am surprised that you are saying that they are-

[Analyst]: Okay. I just asked because most of the FMCG companies, at least on paper, they have this target of having full sustainable packaging by 2030. I am surprised that you are saying that they are-

Speaker #2: I'm surprised that you're saying that they are.

Speaker #3: Actually, because of COVID and then the resultant, there was a big pressure on growth. And then there was pressure on margin after COVID.

Akshay Kanoria: Actually it all because of COVID and then the resultant, there was a big pressure on growth and then there was pressure on margin. After the COVID, there was inflation and all that. In those few years, these targets got extended or deferred or forgotten, sort of. But definitely it is a requirement, and more and more markets in the world are regulating their packaging and adding recyclability standards to their packaging. These also provide a big push towards the demand for mono-material packaging. But yes, is the adoption where we would have expected it to have been? No, it's not. But still long term, it is a good bet.

Speaker #3: There was inflation and all that. So, in those few years, these targets got extended, deferred, or forgotten, sort of. But definitely, it is a requirement.

Speaker #3: And more and more markets in the world are regulating their packaging and adding recyclability standards to their packaging. So, these also provide a big push towards the demand for mono-material packaging.

Speaker #3: But yes, the adoption, where we would have expected it to have been—no, it's not. But still, long-term, it is a good bet.

Speaker #2: So, hi, Vidur here. Basically, the government is not mandating the use of recyclable packaging today in India. Until the government does that, there will be less pressure on brand owners to move to something like this.

Vidur Kanoria: Hi, Vidur here.

Jay Shroff: Yeah

[Analyst]: Yeah

Vidur Kanoria: Basically the government is not mandating the use of recyclable packaging today in India. Until the government does do that, there'll be less pressure on brand owners to move to something like this. But like Akshay said, we are future ready, so when that does happen, and inevitably it will happen at some point, we will be ready. Meanwhile, we've been developing a lot of high-value, fully recyclable packaging, which we are selling as export. There's a good market built abroad, and it's growing in various geographies. So when it does come to India, we'll be much better suited than most others.

Speaker #2: But like Akshay said, we are future-ready. So when that does happen—inevitably, it will happen at some point—we will be ready. In the meanwhile, we've been developing a lot of high-value, fully recyclable packaging, which we are selling as export.

Speaker #2: So there's a good market built abroad, and it's growing in various geographies. So when it does come to India, we'll be much better suited than most others.

Speaker #4: Got it. Thank you. Thank you so much for that.

Jay Shroff: Got it. Thank you. Thank you so much for that.

[Analyst]: Got it. Thank you. Thank you so much for that.

Speaker #3: Thank you.

Akshay Kanoria: Thank you.

Speaker #5: Thank you. Before we take the next question, a reminder to all participants: you may press star and then one to ask a question.

Operator: Thank you. Before we take the next question, a reminder to all the participants, you may press star and then one to ask a question. The next question comes from Nishant Bagrecha with InCred Research. Please go ahead.

Speaker #5: The next question comes from Nishanth Bagrecha with Incred Research. Please go ahead.

Speaker #6: Yeah, thank you for the opportunity. And congratulations, Akshay and team, for the great set of numbers and also entering the new venture. I have a couple of questions.

Nishant Bagrecha: Yeah. Thank you for the opportunity, and congratulations Akshay and team, for the great set of numbers and also entering the new venture. I have a couple of questions. Firstly on this, you mentioned that the existing flexible packaging facility is running at optimal utilization, and you are now adding fourth line. What is the timeline of commissioning of this line? Also, will this new line cater to the existing customers, or will it enable to pursue the new customer segments or geographies?

Speaker #6: So, firstly on this, you mentioned that the existing flexible packaging facility is running at optimal utilization, and you are now adding a fourth line.

Speaker #6: So, what is the timeline for commissioning of this line? And also, will this new line cater to the existing customers, or will it enable us to pursue new customer segments or geographies?

Speaker #2: Yeah. Hi. So, the new line of flexible that we envisage should be operational by January or February next year. And with regards to the customers, well, it could be from the same amount of customers, but definitely, we would target new clients.

Akshay Kanoria: Well, the new line up for flexible we envisage should be operational by January, February next year. With regards to the customers, well, it could be from same amount of customers, but definitely we would target new clients. It is basically the same sector. It is the same kind of packaging and everything, so it is just an increase in capacity.

Vidur Kanoria: Well, the new line up for flexible we envisage should be operational by January, February next year. With regards to the customers, well, it could be from same amount of customers, but definitely we would target new clients. It is basically the same sector. It is the same kind of packaging and everything, so it is just an increase in capacity. And it is catering to similar group of customers. Although, of course, we hope to develop new customers.

Speaker #2: But it's basically the same sector. It's the same kind of packaging and everything, so it's just an increase in capacity. And it's catering to a similar group of customers.

Vidur Kanoria: And it is catering to similar group of customers. Although, of course, we hope to develop new customers.

Speaker #2: Although, of course, we hope to develop new customers.

Speaker #6: Okay, sure. And also, are you at optimal capacity utilization for folding cartons as well, or is there still headroom left for folding cartons?

Nishant Bagrecha: Okay, sure. Also, are you at optimal capacity utilization for folding carton as well, or is there still headroom left for the folding cartons?

Speaker #3: I answered that earlier. We do have some headroom left, but it's factory-to-factory dependent. We're pan-India, so in some plants we have capacity, in some plants we're choked.

Akshay Kanoria: I answered that earlier. We do have some headroom left, but it is factory to factory dependent. We are PAN India, so some plant we have capacity, some plant we are choked. So we are building a room for expansion, which we can do from next year onwards. This year also, we are seeing how the situation develops further, and we can always make quick decisions with a quarter's notice.

Speaker #3: So we are building room for expansion, which we can do from next year onwards. And this year also, we are seeing how the situation develops further.

Speaker #3: And we can always make quick decisions with a quarter's notice.

Speaker #6: Okay, thank you. I missed that. And lastly, given the strong growth and also increasing contribution from flexible packaging and other value-added products, how should we think about the overall margin trajectory over the next three to four years?

Nishant Bagrecha: Okay, thank you. I missed that. Lastly, given the strong growth and also increasing contribution from flexible packaging and other value-added products, how should we think about the overall margin trajectory over the next 3 to 4 years? Is there a scope for structural margin expansion as the mix shifts towards these higher value-added businesses?

Speaker #6: So, is there a scope for structural margin expansion as the mix shifts towards these higher value-added businesses?

Speaker #3: To see the flexible packaging is a lower margin business generally speaking. The returns are similar. Profile-wise, return on capital and all, which is really what matters.

Akshay Kanoria: So the flexible packaging is a lower margin business, generally speaking. The returns are similar profile-wise, return on capital and all, which is really what matters, but the EBITDA margins tend to be lower. So obviously, as the flexible grows, it can reduce the company margin. But so far, the carton has also grown, and the overall mix has been quite healthy. So we have maintained a good margin profile over the last couple of years. So we see that continuing. Whether it will expand or reduce, I can't really say from now. But is there anything structural that is dragging it down or pulling it up? I can't say that right now, no.

Speaker #3: But the EBITDA margins tend to be lower. So, obviously, as the flexible grows, it can reduce the company margin. But so far, the carton has also grown.

Speaker #3: And the overall mix has been quite healthy. So, we have maintained a good margin profile over the last couple of years. We see that continuing. Whether it will expand or reduce, I can't really say right now.

Speaker #3: But is there anything structural that is dragging it down or pulling it up? I can't say that right now, no.

Speaker #6: Okay. Sure. Thanks.

Nishant Bagrecha: Okay, sure. Thanks.

Speaker #5: Thank you. The next question comes from the line of Pulkit Singh with Palmer’s Capital Management. Please go ahead.

Operator: Thank you. The next question comes from the line of Pulkit Singhal with Calamos Capital Management. Please go ahead.

Speaker #2: Thank you for the opportunity, and congrats on a good set of numbers. First question is on the battery separator business itself. So, will this be a 100% subsidiary?

Pulkit Singhal: Thank you for the opportunity, and congrats on a good set of numbers. First question is on the battery separator film business itself. So will this be 100% subsidiary, and what would be the CapEx for every subsequent 70 million square meters that you add?

Speaker #2: And what would be the capex for every subsequent 70 million square meters that you add?

Speaker #3: So Pulkit, if you saw that PPT which we put up, you can see that this is the first phase where we will be doing the conversion activity.

Akshay Kanoria: Pulkit, if you saw that PPT which we put, you can see that this is the first phase where we will be doing the-

Pulkit Singhal: Yes

Akshay Kanoria: the conversion activity, and then eventually we have to go backward into the base film. That entails more CapEx than the coating. It is not so simple that you take this CapEx and multiply it. But we are also incurring some CapEx upfront, like on the land and all. So it is a bit complicated to answer that question. But just to make it simple, no, it is not that you can just multiply it by 8 times and you will get to the same number. Yeah. It will be more than that.

Speaker #3: And then eventually, we have to go backward into the base film. So that entails more capex than the coating. So it's not so simple that you take this capex and multiply it.

Speaker #3: But we are also incurring some capex upfront, like on the land and all. So it's a bit complicated to answer that question. But just to make it simple for you, no, it's not that you can just multiply it by eight times and you'll get to the same number.

Speaker #3: Yeah, it will be more than that.

Speaker #2: Okay. But this is envisioned to be a 100% owned subsidiary, right?

Pulkit Singhal: Okay. But this is envisioned to be 100% owned subsidiary, right?

Speaker #6: Yeah. Yeah.

Akshay Kanoria: Yeah.

Vidur Kanoria: Yeah.

Speaker #3: Yeah, yeah. Right now, yeah, 100%.

Akshay Kanoria: Yeah. Right now, yeah, 100%.

Speaker #2: Okay. Because and what is the lead time for these machinery? Because we have seen that some of the other specialized films, that have been there, they had certain German manufacturers with lead times, long lead times, one or two years for the machinery.

Pulkit Singhal: Okay. What is the lead time for these machinery? Because I have seen that some of the other specialized films that have been there, they had certain German manufacturers with lead times, long lead times, one or two years for the machinery. Is that something which is seen in this business as well, or it is more

Speaker #2: Is that something which is seen in this business as well, or is it more?

Speaker #3: For this first phase, no. For the first phase, the lead times are like our packaging machinery lead times. But then, if we're going to put the film making and all that, that is a longer lead time.

Akshay Kanoria: For this first phase, no. For the first phase, the lead times are like our packaging machinery lead times. But then if we are going to put the filmmaking and all that is a longer lead time. But that we do not know right now. We will see in a year or two what the scenario is.

Speaker #3: But that we don't know right now. I mean, we'll see in a year or two what the scenario is.

Speaker #6: But Pulkit, I mean, from what we see, it's films which you are talking about necessarily. So we don't see two or three years or something like that to set up a base film line as well.

Vidur Kanoria: Pulkit, from what we see, it films which you are talking about necessarily. So, we do not see two or three years or something like that to set up a base film line as well.

Speaker #2: Understood. Got it. I think the second question is more on the mix, so I'm surprised. I mean, we had a higher share of flexible and a lower share of export, but still, our margins have gone up.

Pulkit Singhal: Understood. Got it. I think second question is more on the mix. So I am surprised, we had higher share of flexible and lower share of export, but still our margins have gone up. Has there something changed on the domestic side in terms of competition intensity, or is there any other reason that explains this? Because both were dilutive, supposed to be dilutive in terms of EBITDA margins.

Speaker #2: Has something changed on the domestic side in terms of competition intensity, or is there any other reason that explains this? Because both were dilutive.

Speaker #2: I mean, in terms of, it's supposed to be dilutive in terms of EBITDA margins.

Speaker #3: I mean, on a quarterly basis, we can't pass so much detail because that really depends. Or, we should look at it more long-term, I think, rather than focusing on just the quarters.

Akshay Kanoria: On a quarterly basis, we cannot pass so much detail because it really depends. We should look at it more long-term, I think, than do not pass into it at quarters.

Speaker #2: Understood.

Pulkit Singhal: Understood.

Speaker #3: But generally speaking, overall, it's okay. I mean, no major concern on margin.

Akshay Kanoria: But generally speaking, overall it is okay with no major concern on margin.

Speaker #2: Sure. Just lastly, on this UK FTA—anything on the export side that we may be benefiting from the ongoing, I mean already implemented, FTA and the ones that are coming ahead in terms of Europe, etc.

Pulkit Singhal: Sure. Just lastly, on this UK FTA and anything on the export side that you may be benefiting from the ongoing, already implemented FTA and the ones that are coming ahead in terms of Europe, et cetera?

Speaker #3: So we see that, generally, customers—especially in Europe, the UK, and all—are quite positive on India and buying from India and moving sourcing here.

Akshay Kanoria: We see that generally customers are, especially Europe, UK, and all, they are quite positive on India and buying from India and moving sourcing here. That is a positive trend. These FTAs do not really help in terms of our product because they were anyways going at zero duty. Flexibles, it has helped somewhat. There is a slight reduction in duties, which will make us more competitive than, say, if they were buying from a Vietnam or a Turkey, now we can be a little more competitive. So there, it will help. But generally, it leads to a positive sentiment towards buying from India in general, which is what is really helpful. So we do see good scope for further expansion in our export segment.

Speaker #3: So, that's a positive trend. And these FTAs don't really help in terms of paper products because they were, anyway, going at zero duty. For flexibles, it's helped somewhat.

Speaker #3: There is a slight reduction in duties, which will make us more competitive than, say, if they were buying from Vietnam or Turkey.

Speaker #3: Now we can be a little more competitive, so there it will help. But generally, it leads to a positive sentiment towards buying from India in general, which is what is really helpful.

Speaker #3: So we do see good scope for expansion in our export segment.

Speaker #2: Got it. Great. Thank you, and all the best.

Pulkit Singhal: Got it. Great. Thank you and all the best.

Speaker #3: Thank you.

Akshay Kanoria: Thank you.

Speaker #5: Thank you. The next question comes from the line of Darshita with DSP Asset Managers. Please go ahead.

Operator: Thank you. The next question comes from the line of Darshita with DSP Asset Managers. Please go ahead.

Speaker #4: Yeah, good afternoon. So my first question was regarding the separator film business. I wanted to understand, do we need higher OPEX? I mean, should we be building in higher OPEX for this business, given that we may have to hire some sector specialists or something like that to run the plant or to head the business, to help us with the technology or something like that?

[Company Representative] (DSP Asset Managers): Yeah. Good afternoon. My first question was regarding the separator film business. I wanted to understand, do we need higher OpEx? Should we be building in higher OpEx for this business, given that we may have to hire some sector specialists or something like that to run the plant or to head the business, to help us with the technology or something like that?

Darshita Shah: Yeah. Good afternoon. My first question was regarding the separator film business. I wanted to understand, do we need higher OpEx? Should we be building in higher OpEx for this business, given that we may have to hire some sector specialists or something like that to run the plant or to head the business, to help us with the technology or something like that?

Speaker #3: I think on the one and a half, 2,000-crore topline which we have, it's not going to be a significant drag. I mean, even if we put a very top-heavy team today, we won't really—

Akshay Kanoria: I think on the INR 1,500 crore, INR 2,000 crore top line, which we have this, it is not going to be a significant drag. Even if we put a very top-heavy team today, we will not really-

Speaker #4: No, no. At ₹1,200 crore top line, of course, but from before that, kind of comes through.

[Company Representative] (DSP Asset Managers): No, no, at INR 1,200 crore top line, of course. But before that kind of comes through-

Darshita Shah: No, no, at INR 1,200 crore top line, of course. But before that kind of comes through-

Speaker #3: No, in the separator business itself—yeah, okay. But I'm saying overall, for TCPL, it's not going to—yeah. And it's already kind of budgeted in our calculation.

Akshay Kanoria: Oh, in the separator business itself, yeah, okay. But I am saying overall for TCPL, it is not going to

[Company Representative] (DSP Asset Managers): Okay.

Darshita Shah: Okay.

Akshay Kanoria: It is already kind of budgeted in our calculation.

Speaker #4: Got it. Okay. And when you made the comment on it passing our ROCE threshold, I'm assuming it's higher than the 20% threshold that we usually have before entering any business or doing any acquisition.

[Company Representative] (DSP Asset Managers): Got it. Okay. When you made the comment on it passing our ROCE threshold, I am assuming higher than the 20% threshold that we usually have before entering any business or doing any acquisition. Okay, great. Secondly, on the Chennai plant, I know you would not want to give out specific capacity utilizations, but how is the ramp-up going on at the Chennai plant? The last time, I think last time around, we thought that FY27 utilizations should improve. Is that trajectory on the way?

Darshita Shah: Got it. Okay. When you made the comment on it passing our ROCE threshold, I am assuming higher than the 20% threshold that we usually have before entering any business or doing any acquisition. Okay, great. Secondly, on the Chennai plant, I know you would not want to give out specific capacity utilizations, but how is the ramp-up going on at the Chennai plant? The last time, I think last time around, we thought that FY27 utilizations should improve. Is that trajectory on the way?

Speaker #4: Okay, great. Secondly, on the Chennai plant—what I mean, I know you wouldn't want to give out specific capacity utilizations—but how is the ramp-up going on at the Chennai plant?

Speaker #4: The last time, I think last time around, we thought that FY27 utilizations should improve. So, is that trajectory— is it on the way?

Speaker #3: Yeah. We're fairly satisfied there.

Akshay Kanoria: Yeah, we are fairly satisfied there.

Speaker #4: Okay. Would it be closer to the 70% odd number?

[Company Representative] (DSP Asset Managers): Okay. Would be closer to the 70% odd number?

Darshita Shah: Okay. Would be closer to the 70% odd number?

Speaker #3: Getting there. Yeah.

Akshay Kanoria: Getting there.

Speaker #4: Got it. And do we plan on then setting up another line here, given that I think 50% of the land is already—or 50%?

[Company Representative] (DSP Asset Managers): Got it. Do we plan on then setting up another line here, given that I think 50% of the land is already 50%?

Darshita Shah: Got it. Do we plan on then setting up another line here, given that I think 50% of the land is already 50%?

Speaker #3: Oh, yeah. Over there, so we can decide very quickly. There's enough space and everything is already made for two, three lines. So there's not much to prepare, just decide and order the machines tomorrow.

Akshay Kanoria: Oh, yeah. Over there, so we can decide very quick. There is enough space, and everything is already made for two, three lines. So there is nothing much to prepare as such. I can just decide and order tomorrow the machines. So that we will see. We are just waiting few more months or weeks or whatever, and then we will decide.

Speaker #3: So that we will see. We're just waiting a few more months or weeks, or whatever, and then we'll decide.

Speaker #4: Got it. Okay, just lastly, on the—

[Company Representative] (DSP Asset Managers): Got it. Okay. Just lastly.

Darshita Shah: Got it. Okay. Just lastly.

Speaker #5: Sorry to interrupt. Sorry to interrupt. Darshita ma'am, may we request you to return to the queue for the follow-ups, please?

Operator: Sorry to interrupt, Darshita, ma'am. May we request you to return to queue for further follow-ups, please?

Speaker #3: Oh, yeah. It's been an hour. Sorry.

Akshay Kanoria: Oh, yeah. It has been an hour. Sorry.

Speaker #5: Thank you. We have our next follow-up question coming from the line of Abhisar Jain with Monarch AIF. Please go ahead.

Operator: Thank you. We have our next follow-up question coming from the line of Abhisar Jain with Monarch AIF. Please go ahead.

Speaker #6: Yeah. Thank you, sir, for the opportunity again. Sir, just a clarification on the presentation that you have put for the battery separator film project.

Abhisar Jain: Yeah. Thank you, sir, for the opportunity again. Sir, just a clarification on the presentation that you have put for the battery separator film project. On slide number 7, we have mentioned two phases, and I think in one of the queries in between, we mentioned. Can you just specify that when we start this project in Q4 FY28, what would we do initially, and then how quickly we will move into phase 2 and full end-to-end film manufacturing? How much that period?

Speaker #6: So, on slide number seven, we have mentioned two phases, and I think in one of the queries in between, you mentioned—so can you just specify that when we start this project in Q4 FY28, what would we do initially? And then, how quickly will we move into phase two, and for full end-to-end film manufacturing, how long will that period be?

Speaker #3: So, we are starting with the coating and conversion activity as indicated in our presentation. How quickly we will go backward will be seen at the time; it depends on the business, how quickly we pick up, and what the scenario is like in terms of the India and global market, and the machinery. We can't comment on that right now.

Akshay Kanoria: We are starting with the coating and conversion activity as indicated in our presentation. How quickly we will go backward, that it will be seen at the time. It depends on the business, how quickly we pick up, what the scenario is like in terms of the India and global market, the machinery, and we cannot comment.

Speaker #6: And how fast the cell maker is able to scale up is the main thing. We have to have enough capacity in order to go backward.

Abhisar Jain: How fast the cell maker is able to scale up is the main thing.

Akshay Kanoria: Yeah.

Vidur Kanoria: Yeah. We have to have enough capacity in order to go backward. So, there has to be enough demand in India, is what I mean.

Abhisar Jain: We have to have enough capacity in order to go backward. So, there has to be enough demand in India, is what I mean.

Speaker #6: So, there has to be enough demand in India, is what I mean. Understood. And so, the matrix that you are indicating—either, I’m assuming, on asset terms, or on margins, or on ROCE—are independent of whether the phase two rectifies quickly or, depending on the market situation, slowly.

Abhisar Jain: Understood.

Vidur Kanoria: The metrics that you are indicating, I am assuming, either on asset turns or on margins or on ROCE, are independent of whether the phase 2 ratifies quickly or depending on the market situation slowly, right?

Abhisar Jain: The metrics that you are indicating, I am assuming, either on asset turns or on margins or on ROCE, are independent of whether the phase 2 ratifies quickly or depending on the market situation slowly, right?

Speaker #6: Right?

Speaker #3: Yeah. Yeah. But even the Phase One ROCE is okay.

Akshay Kanoria: Yeah. But even the phase 1 ROCE is okay.

Speaker #6: Okay. Sorry. Please, go ahead. Please, go ahead.

Abhisar Jain: Okay. Sorry. Please go ahead.

Speaker #3: Yeah, yeah. I'm saying, whether it's phase one or phase two, overall, we are investing in our business so that it can give returns. Obviously, the real returns will come when it's at a larger scale and doing millions and millions of square meters.

Akshay Kanoria: Yeah, I'm saying even whether phase 1 or phase 2, overall, we are investing for a business that can give returns. Obviously the real fun will come when it's a larger scale and doing millions and millions of square meters. But it has to be a sustainable business, generally speaking. That's why we are getting into it.

Speaker #3: But it has to be a sustainable business, generally speaking. That's why we are getting into it.

Speaker #6: Sure, sure, sure. And just one question also. Since you mentioned that the largest player here has increased in size over time very significantly, I'm assuming this is some core group from China.

Abhisar Jain: Sure. Just one question also, since you mentioned that the largest player here has increased in size over time, very significantly, I am assuming this is SEMCORP Group from China. Do you have an idea about what kind of capacity that they have? Or what are the top 2, 3 largest players have in terms of capacity?

Speaker #6: So, do you have an idea about what kind of capacity they have, or what the top two or three largest players have in terms of capacity?

Speaker #3: Yeah. So you're right about the company. But what capacity they have is tough for anyone to answer, but it's like way into the billions of square meters because in China, it's like I don't know, more than one terawatt of cell manufacturing capacity.

Akshay Kanoria: Yeah. You are right about the company. But what capacity they have is tough for anyone to answer, but it is way into the billions of square meters. Because in China, it is like, I do not know, more than 1 terawatt of cell manufacturing capacity. So you can calculate that the separator requirement is also enormous. So, it is a long way to look for us right now.

Speaker #3: So you can calculate that the separator requirement is also enormous. So, I mean, it's a long way to look for us right now.

Speaker #6: Understood, sir. Understood. Thank you so much, sir.

Abhisar Jain: Understood, sir. Thank you so much, sir.

Speaker #3: Thank you. Thank you.

Akshay Kanoria: Thank you.

Operator: Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference call over to the management for closing comments.

Speaker #5: Thank you. Ladies and gentlemen, if there are no further questions from the participants, I will now hand the conference call over to management for closing comments.

Speaker #3: Thank you. I hope we have been able to answer all your questions. Should you need any further clarification, or if you would like to know more about the company, please feel free to contact us or CDR India.

Akshay Kanoria: Thank you. I hope we have been able to answer all your questions. Should you need any further clarification or if you would like to know more about the company, please feel free to contact us or CDR India. Thank you again for taking the time to join us on this call. We look forward to interacting with you next quarter.

Speaker #3: Thank you again for taking the time to join us on this call. We look forward to interacting with you next quarter.

Speaker #5: Thank you, members of the management. On behalf of TCPL Packaging Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.

Operator: Thank you, members of the management. On behalf of TCPL Packaging Limited, that concludes this conference. Thank you everyone for joining us, and you may now disconnect your lines.

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Q1 2027 TCPL Packaging Ltd Earnings Call

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