Q1 2027 Ester Industries Ltd Earnings Call

August 18, 2026

Speaker #1: Ladies and gentlemen, you are connected for the Ester Industries Limited conference call. Please stay connected. The conference will begin shortly. Participants, you are connected for the Ester Industries Limited conference call.

Operator: Ladies and gentlemen, you are connected for the Ester Industries Limited conference call. Please stay connected. The conference will begin shortly. Participants, you are connected for the Ester Industries Limited conference call. Please stay connected. The conference will begin shortly. Thank you. Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings conference call of Ester Industries Limited. 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 the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sharma from Adfactors PR. Thank you, and over to you, sir.

Operator: Ladies and gentlemen, you are connected for the Ester Industries Limited conference call. Please stay connected. The conference will begin shortly. Participants, you are connected for the Ester Industries Limited conference call. Please stay connected. The conference will begin shortly. Thank you. Ladies and gentlemen, good day and welcome to the Q1 FY 2027 earnings conference call of Ester Industries Limited. 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 the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sharma from Adfactors PR. Thank you, and over to you, sir.

Speaker #1: Please stay connected. The conference will begin shortly. Thank you. Ladies and gentlemen, good day, and welcome to the Q1 FY27 earnings conference call of Ester Industries Limited.

Speaker #1: 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.

Speaker #1: Should you need assistance during the 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 Mr. Amit Sharma from Adfactors PR. Thank you, and over to you, sir.

Speaker #2: Thank you, Sagar. Good afternoon, everybody, and a very warm welcome to you all. Thank you, everyone, for participating in the earnings call of Ester Industries Limited for the first quarter ended 30th June 2026.

Amit Sharma: Thank you, Sagar. Good afternoon, everybody, and a very warm welcome to you all. Thank you everyone for participating in the earnings call of Ester Industries Limited for the first quarter ended 30 June 2026. On the call today, we have Mr. Vaibhav Jha, CEO; Mr. Pradeep Rustagi, Executive Director, Corporate Affairs; and Mr. Saurabh Agrawal, CFO of the company. The management will take us through the operational and financial performance for the quarter, following which we will open the forum for the question and answer session. Before we begin, please note that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. The statements are not a guarantee for future performance and involve risks and uncertainties that are difficult to predict.

Amit Sharma: Thank you, Sagar. Good afternoon, everybody, and a very warm welcome to you all. Thank you everyone for participating in the earnings call of Ester Industries Limited for the Q1 ended 30 June 2026. On the call today, we have Mr. Vaibhav Jha, CEO; Mr. Pradeep Rustagi, Executive Director, Corporate Affairs; and Mr. Saurabh Agrawal, CFO of the company. The management will take us through the operational and financial performance for the quarter, following which we will open the forum for the question and answer session. Before we begin, please note that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. The statements are not a guarantee for future performance and involve risks and uncertainties that are difficult to predict. I now request Mr. Vaibhav Jha to take us through the company's performance. Thank you, and over to you, sir.

Speaker #2: On the call today, we have Mr. Vaibhav Jha, CEO; Mr. Pradeep Rustagi, Executive Director, Corporate Affairs; and Mr. Saurav Agrawal, CFO of the company.

Speaker #2: The management will take us through the operational and financial performance for the quarter, following which we will open the forum for the question and answer session.

Speaker #2: Before we begin, please note that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call.

Speaker #2: The statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now request Mr. Vaibhav Jha to take us through the company's performance.

Amit Sharma: I now request Mr. Vaibhav Jha to take us through the company's performance. Thank you, and over to you, sir.

Speaker #2: Thank you, and over to you, sir.

Speaker #3: Thank you, Amit. Thank you, everyone, for joining us today. I will take you through the industry environment and key business developments during the quarter.

Vaibhav Jha: Thank you, Amit. Thank you everyone for joining us today. I will take you through the industry environment and key business developments during the quarter, following which Saurabh will walk you through the financial performance. I would first share with you a short perspective on the industry landscape before I move to company specific key updates. The operating environment for the BOPET film industry continued to improve during Q1 FY27. Global prices of BOPET have seen stability due to tighter trade flows, raw material shortage, as well as increase in raw material and freight costs. At the same time, the disruptions and uncertainties caused by imposition of reciprocal and punitive trade tariffs by USA during Q2 and Q3 of FY26 have largely moderated subsequent to rejection of such trade tariffs by the Supreme Court of the United States. India now enjoys a favorable import tariff scenario for imports into US.

Speaker #3: Following this, Saurav will walk you through the financial performance. I will first share with you a short perspective on the industry landscape before I move to company-specific key updates.

Speaker #3: The operating environment for the Bophet film industry continued to improve during Q1 FY27. Global prices of Bophet have seen stability due to tighter trade flows, raw material shortages, as well as an increase in raw material and freight costs.

Speaker #3: At the same time, the disruptions and uncertainties caused by the imposition of reciprocal and punitive trade tariffs by the USA during Q2 and Q3 of FY26 have largely moderated.

Speaker #3: Subsequent to the rejection of such trade tariffs by the Supreme Court of the USA, India now enjoys a favorable import tariff scenario for imports into the US.

Speaker #3: This has resulted in regaining lost market share in the US between Q2 and Q4 of FY26 in this quarter. We continue to see strong structural tailwinds emerging from the circular economy.

Vaibhav Jha: This has resulted in regaining of lost market share in US between Q2 and Q4 of FY26 in this quarter. We continue to see strong structural tailwinds emerging from the circular economy. The implementation of Plastic Waste Management Rules and the increasing requirement for the PET and BOPET films with stipulated post-consumer recycled content are creating additional demand opportunities for rPET and recycled content BOPET films. Amongst the various films and substrates used for the flexible packaging, BOPET film is the only food-grade approved substrate and the only substrate which can have sufficient post-consumer recycled content to help brands meet their sustainability targets. Further, new capacity additions are projected to be moderate and evenly phased out given the volatile scenario experienced by the industry players during last two to three years.

Speaker #3: The implementation of plastic waste management rules and the increasing requirement for PET and BOPET films, restipulated post-consumer recycled content, are creating additional demand opportunities for rPET and recycled-content BOPET films.

Speaker #3: Amongst the various films and substrates used for flexible packaging, BOPET film is the only food-grade approved substrate and the only substrate which can have sufficient post-consumer recycled content to help brands meet their sustainability targets.

Speaker #3: Further, new capacity additions are projected to be moderate and evenly phased out, given the volatile scenario experienced by the industry players during the last two to three years.

Speaker #3: Overall, while industry cycles will continue to influence the business, we believe the combination of improving industry discipline, currency in international prices, and growing demand for recycled content products provides a more favorable operating environment for the BOPET industry.

Vaibhav Jha: Overall, while industry cycles will continue to influence the business, we believe the combination of improving industry discipline, buoyancy in international prices, and growing demand for recycled content products provides a more favorable operating environment for the BOPET industry. Sustainable solutions are at the core of Ester's strategic growth platform. The regulatory environment is becoming increasingly supportive of recycled materials. In India, recycled content requirements under the Plastic Waste Management Rules framework are stipulated to increase progressively. For Ester, this creates an opportunity to participate across multiple points of the value chain. Ester has invested in creating recycled PET capacities of 30,000 tons per annum. This enables us to produce recycled PET for use as feedstock in the recycled content films. In addition, this gives us a platform to supply best-in-class bottle-grade recycled PET to prestigious brands, as well as textile-grade and film-grade recycled PET to various leading customers.

Speaker #3: Sustainable solutions are at the core of Ester's strategic growth platform. The regulatory environment is becoming increasingly supportive of recycled materials. In India, recycled content requirements under the plastic waste management framework are stipulated to increase progressively.

Speaker #3: For Ester, this creates an opportunity to participate across multiple points of the value chain. Ester has invested in creating recycled PET capacities of 30,000 tons per annum.

Speaker #3: This enables us to produce recycled PET for use as feedstock in recycled content films. In addition, this gives us a platform to supply best-in-class, bottle-grade recycled PET to prestigious brands.

Speaker #3: As well as textile-grade and film-grade recycled PET to various leading customers, we are also building capabilities to participate in higher-value circular applications over time through Elite.

Vaibhav Jha: We are also building capabilities to participate in higher value circular applications over time through ELITe. Against this backdrop, Ester continues to strategically transform itself into manufacturer of specialty BOPET films and polymers. The consistently increasing volume and proportion of value-added specialty products and strong business development pipeline of new products within specialty polymers showcase this key strategic focus. Exploring new customers in new market in various other geographies continues to be highest priority. We continue to invest rapidly in R&D to innovate at a rapid pace and fast-track our journey to specialty manufacturer. These strategies are aimed at improving realizations, enhancing the overall product mix, and importantly, reducing earning volatility arising from the inherent cyclicity in the commodity BOPET film products caused by the demand-supply imbalances from time to time. Now, moving on to the key business updates, starting with the polyester film segment.

Speaker #3: Against this backdrop, Ester continues to strategically transform itself into a manufacturer of specialty BOPET films and polymers. The consistently increasing volume and proportion of value-added specialty products, along with a strong business development pipeline of new products within specialty polymers, showcase this key strategic focus.

Speaker #3: Exploring new customers in new markets in various other geographies continues to be our highest priority. We continue to invest rapidly in R&D to innovate at a rapid pace and fast-track our journey to becoming a specialty manufacturer.

Speaker #3: These strategies are aimed at improving realizations, enhancing the overall product mix, and, importantly, reducing earnings volatility arising from the inherent cyclicity in the commodity BOPET film products caused by demand-supply imbalances from time to time.

Speaker #3: Now, moving on to the key business updates. Starting with the polyester film segment— in this segment, we delivered a healthy improvement in performance during the quarter.

Vaibhav Jha: In this segment, we delivered a healthy improvement in the performance during the quarter. Consolidated film volumes increased 2.7% year on year to 22,120 metric tons, while film segment revenue grew by approximately 38% to INR 399.5 crores. The significant difference between volume and revenue growth reflects the improvement in realization and margins, as well as the continued improvement in our product mix. Consolidated capacity utilization also improved to 84%, compared with 82% in Q1 FY26, supported by the better market scenario. A particularly encouraging development was the continued growth in our VAST Films portfolio. VAST volume increased 23% year on year to 6,368 metric tons in this quarter, and their contribution to total film volumes increased to approximately 29%, from 24% a year ago. We consider this shift in mix to be an important indicator of the progress we are making in the business.

Speaker #3: Consolidated film volumes increased 2.7% year-on-year to 22,120 metric tons, while film segment revenue grew by approximately 38% to ₹399.5 crores. The significant difference between volume and revenue growth reflects the improvement in realizations and margins, as well as the continued improvement in our product mix.

Speaker #3: Consolidated capacity utilization also improved to 84% compared with 82% in Q1 FY26, supported by the better market scenario. A particularly encouraging development was the continued growth in our WAF films portfolio. WAF volume increased 23% year-on-year to 6,368 metric tons in this quarter, and their contribution to total film volumes increased to approximately 29% from 24% a year ago.

Speaker #3: We consider this shift in mix to be an important indicator of the progress we are making in the business. As the volume and proportion of WAF products increases, our ability to compete is increasingly based on product performance, satisfying new application requirements, and customer qualifications.

Vaibhav Jha: As the volume and proportion of VAST products increases, our ability to compete is increasingly based on product performance, satisfying new application requirements and customer qualifications, rather than being driven purely by price. Encouraged by the recent performance and positive outcomes of our strategic focus, we are targeting proportion of VAST products at about 50% to 60% over next two to three years. We will therefore continue to invest in product development, customer approvals and capabilities to serve more specialized applications. Chip business revenue during the quarter was around INR 5 crores, driven by higher third party sales volume. In this quarter's performance, we saw a significant improvement in realizations, driven by growth in VAST sales as well as favorable industry dynamics.

Speaker #3: Rather than being driven purely by price, encouraged by the recent performance and positive outcomes of our strategic focus, we are targeting a proportion of WAF products at about 50 to 60 percent over the next two to three years.

Speaker #3: We will therefore continue to invest in product development, customer approvals, and capabilities to serve more specialized applications. Ship business revenue during the quarter was around ₹5 crore, driven by higher third-party sales volume.

Speaker #3: In this quarter's performance, we saw a significant improvement in realizations, driven by growth in WAF sales as well as favorably strong industry dynamics. Consolidated film revenue grew by approximately 38% year-on-year, while the segment delivered around 10% EBIT margins.

Vaibhav Jha: Consolidated film revenue grew by approximately 38% year-on-year, while the segment delivered around 10% EBIT margins, supported by better throughput and a higher contribution from VAST products. Going forward, our focus will remain on maintaining price discipline, improving utilization, and increasing the volume and proportion of VAST products. We believe this will help us improve the overall quality of earnings and build greater resilience in the film business through industry cycles. Now turning to specialty polymers. The segment reported consolidated sales volume of 725 metric tons during the quarter, compared with 954 metric tons in Q1 FY26. Consolidated revenue stood at INR 32.7 crores compared with INR 48.1 crores in the corresponding quarter last year. While the overall volumes and revenue were lower due to demand pressure in one of our high margin specialty products, the profitability of business improved meaningfully, with EBIT margin increasing from 31.7% to 45.3%.

Speaker #3: This was supported by better throughput and a higher contribution from WAF products. Going forward, our focus will remain on maintaining price discipline, improving utilization, and increasing the volume and proportion of WAF products.

Speaker #3: We believe this will help us improve the overall quality of earnings and build greater resilience in the film business through industry cycles. Now, turning to specialty polymers.

Speaker #3: The segment reported consolidated sales volume of 725 metric tons during the quarter, compared with 954 metric tons in Q1 FY26. Consolidated revenue stood at ₹32.7 crore, compared with ₹48.1 crore in the corresponding quarter last year. While the overall volumes and revenue were lower due to demand pressure in one of our high-margin specialty products, the profitability of the business improved meaningfully, with EBIT margin increasing from 31.7% to 45.3%.

Speaker #3: This was primarily driven by a better product mix during the quarter. We continue to focus on optimizing the product mix and expanding the portfolio, while maintaining the healthy margin profile of this business.

Vaibhav Jha: This was primarily driven by a better product mix during the quarter. We continue to focus on optimizing the product mix and expanding the portfolio while maintaining the healthy margin profile of this business. The growth in specialty polymers will be driven by increase in volume with a mix of high margin specialties as well as mid margin value added products or VAP. The focus on VAP will help us improve operating leverage and cash flows while also diversifying our business, while the growth in high margin specialties will provide the profitability buoyancy. However, given the strength of our business development pipeline, we expect to recover the revenue growth in this business by the end of this financial year. We are targeting growth at a CAGR of 20% over next three to five years in the specialty polymer segment.

Speaker #3: The growth in specialty polymers will be driven by an increase in volumes, with a mix of high-margin specialties as well as mid-margin value-added products, or WAF.

Speaker #3: The focus on WAF will help us improve operating leverage and cash flows, while also diversifying our business. Meanwhile, the growth in high-margin specialties will provide the profitability buoyancy.

Speaker #3: However, given the strength of our business development pipeline, we expect to recover this revenue growth in this business by the end of this financial year.

Speaker #3: We are targeting growth at a CAGR of 20% over the next three to five years in the specialty polymer segment. Coming to the RFET business, consolidated volumes increased 19% year-on-year to 1,394 metric tons, while revenue grew 24% to ₹17.5 crores during the quarter.

Vaibhav Jha: Coming to the rPET business, consolidated volumes increased 19% year-on-year to 1,394 metric tons, while revenue grew 24% to INR 17.5 crore during the quarter. We continue to see rPET as an important part of our broader film strategy, as well as an important sustainable solution that we offer to our customers at large. Coming to Ester Filmtech, we saw meaningful improvement in the business during the quarter. Capacity utilization reached approximately 83%, the highest level achieved so far, while sales volume increased 22.7% year-on-year to 9,807 metric tons. More importantly, the business is now beginning to demonstrate the better operating leverage that comes with higher capacity utilization. The improvement is being supported not only by higher throughput, but also by better production efficiency and a healthier product mix.

Speaker #3: We continue to see RFET as an important part of our broader film strategy, as well as an important sustainable solution that we offer to our customers at large.

Speaker #3: Coming to Ester Film Tech, we saw meaningful improvement in the business during the quarter. Capacity utilization reached approximately 83%, the highest level achieved so far, while sales volume increased 22.7% year-on-year to 99,807 metric tons.

Speaker #3: More importantly, the business is now beginning to demonstrate improved operating leverage that comes with higher capacity utilization. The improvement is being supported not only by higher throughput but also by better production efficiency and a healthier product mix.

Speaker #3: As we continue to ramp up utilization and increase the contribution from WAF and recycled content products, we see Ester Film Tech becoming an increasingly relevant part of the consolidated business.

Vaibhav Jha: As we continue to ramp up utilization and increase the contribution from VAST and recycled content products, we see Ester Filmtech becoming an increasingly relevant part of the consolidated business. Our focus will remain on continuing this ramp up, improving the mix, and translating the improvement in operating performance into consistent cash generation. I would now like to touch upon ELITe, our 50/50 joint venture with Loop Industries. We see ELITe as strategically different from our existing recycling activities, as the objective is to establish a chemical recycling platform for polyester textile waste and enable textile to textile recycling. The project is progressing through the engineering phase. The FEED study has been completed by Tata Consulting Engineers, and Toyo Engineering India has been appointed for detailed engineering. Land acquisition is also progressing and is expected to conclude within the next two months.

Speaker #3: Our focus will remain on continuing this ramp-up, improving the mix, and translating the improvement in operating performance into consistent cash generation. I would now like to touch upon Elite.

Speaker #3: Our 50/50 joint venture with Loop Industries—we see Elite as strategically different from our existing recycling activities, as the objective is to establish a chemical recycling platform for polyester textile waste and enable textile-to-textile recycling.

Speaker #3: The project is progressing through the engineering phase. The field study has been completed by Tata Consulting Engineers, and Toyo Engineering India has been appointed for detailed engineering.

Speaker #3: Land acquisition is also progressing and is expected to conclude within the next two months. The facility is targeted to become operational in calendar year 2028 and will use Loop's proprietary depolymerization technology to convert 100% textile waste streams into virgin-quality monomers.

Vaibhav Jha: The facility is targeted to become operational in CY 2028 and will use Loop's proprietary depolymerization technology to convert 100% textile waste streams into virgin quality monomers, which will then be polymerized into virgin quality polyester resin. An encouraging development for ELITe has been early and regular customer validation. Following Nike's earlier commitment as an anchor customer, our JV partner, Loop Industries, has now secured a letter of intent from a leading global sports and athletic brand for the potential offtake of up to 15,000 metric ton per year of Loop PET fiber grade resin annually under a multi-year commercial framework. The resin will be supplied from the upcoming manufacturing facility in Gujarat to be operated by ELITe, the 50/50 joint venture between Ester Industries and Loop Industries.

Speaker #3: Which will then be polymerized into virgin-quality polyester resin. An encouraging development for Elite has been early and regular customer validations. Following Nike's earlier commitment as an anchor customer, our JV partner, Loop Industries, has now secured a letter of intent from a leading global sports and athletic brand for the potential of take off of up to 15,000 metric tons per year of Loop PET fiber-grade resin, annually under a multi-year commercial framework.

Speaker #3: The resin will be supplied from the upcoming manufacturing facility in Gujarat, to be operated by ELITE, the 50/50 joint venture between Ester Industries and Loop Industries.

Speaker #3: With commitments from these marquee global brands, a substantial portion of the planned capacity is now covered with contracts and LOIs, well ahead of the commercial startup.

Vaibhav Jha: With commitment from these marquee global brands, a substantial portion of the planned capacity is now covered with contracts and LOIs well ahead of commercial startup. We view this as an important validation of both the technology and the market opportunity, and it reinforces the growing interest from global brands in circular textile to textile recycled polyester. We will continue to progress the project through the remaining qualification, permits, approvals, and execution stages in a disciplined manner. Looking ahead, our priorities remain clear. We will continue to focus on sustaining the improvement in film realizations and capacity utilization, increasing the volume and proportion of VAST products, and expanding the specialty polymers through new products, customers, and geographies.

Speaker #3: We view this as an important validation of both the technology and the market opportunity, and it reinforces the growing interest from global brands in circular, textile-to-textile recycled polyester.

Speaker #3: We will continue to progress the project through the remaining qualification, permits, approvals, and execution stages in a disciplined manner. Looking ahead, our priorities remain clear.

Speaker #3: We will continue to focus on sustaining the improvement in film realizations and capacity utilization, increasing the volume and proportion of WAF products, and expanding specialty polymers through new products, customers, and geographies.

Speaker #3: At the same time, we will continue to scale our RFET capabilities and integrate them more closely with the BOPET Film Business, while progressing Elite in a disciplined manner towards its targeted commissioning in calendar year 2028.

Vaibhav Jha: At the same time, we will continue to scale our rPET capabilities and integrate them more closely with BOPET film business while progressing ELITe in a disciplined manner towards its targeted commissioning in calendar year 2028. With that, I hand over to Saurabh to take you through the financial performance. Over to you, Saurabh.

Speaker #3: With that, I hand over to Saurav to take you through the financial performance. Over to you, Saurav.

Speaker #1: Thank you, Weber, and good afternoon, everyone. Let me take you through the financial performance for the quarter, after which we will open the floor for questions.

Sourabh Agarwal: Thank you, Veba, and good afternoon, everyone. Let me take you through the financial performance for the quarter, after which we will open the floor for questions. I will begin with the standalone performance of Ester Industries. Standalone total income for Q1 FY27 increased 22% on year-on-year basis to INR 347.7 crores, compared with INR 284.9 crores in Q1 FY26. The improvement was primarily driven by the film segment, where higher realizations, better capacity utilization, and an improved product mix supported the revenue growth. Standalone EBITDA increased 25.2% on a year-on-year basis to INR 40 crores, with the EBITDA margin improving to 11.5% from 11.2% in the corresponding quarter. Profit after tax increased 50.5% to INR 14.5 crores compared to INR 9.6 crores in Q1 FY26, resulting in an improvement in PAT margin from 3.4% to 4.2%.

Sourabh Agarwal: Thank you, Vaibhav, and good afternoon, everyone. Let me take you through the financial performance for the quarter, after which we will open the floor for questions. I will begin with the standalone performance of Ester Industries. Standalone total income for Q1 FY27 increased 22% on year-on-year basis to INR 347.7 crores, compared with INR 284.9 crores in Q1 FY26. The improvement was primarily driven by the film segment, where higher realizations, better capacity utilization, and an improved product mix supported the revenue growth. Standalone EBITDA increased 25.2% on a year-on-year basis to INR 40 crores, with the EBITDA margin improving to 11.5% from 11.2% in the corresponding quarter. Profit after tax increased 50.5% to INR 14.5 crores compared to INR 9.6 crores in Q1 FY26, resulting in an improvement in PAT margin from 3.4% to 4.2%.

Speaker #1: I will begin with the standalone performance of Ester Industries. Standalone total income for Q1 FY27 increased 22% on a year-on-year basis, to ₹347.7 crores, compared with ₹284.9 crores in Q1 FY26.

Speaker #1: The improvement was primarily driven by the film segment, where higher realizations, better capacity utilization, and an improved product mix supported the revenue growth. Standalone EBITDA increased 25.2% on a year-on-year basis to ₹40 crores, with the EBITDA margin improving to 11.5% from 11.2% in the corresponding quarter.

Speaker #1: Profit after tax increased 50.5% to ₹14.4 crore, compared to ₹9.6 crore in Q1 FY26, resulting in an improvement in PAT margin from 3.4% to 4.2%.

Speaker #1: Overall, the standalone business delivered improved performance across revenue, operating profitability, and the bottom line. Coming to Ester Film Tech, our 100% subsidiary, the quarter marked a significant improvement in the financial performance of the business.

Sourabh Agarwal: Overall, the standalone business delivered improvement across revenue, operating profitability, and the bottom line. Coming to Ester Filmtech, our 100% subsidiary, the quarter marked a significant improvement in the financial performance of the business. Sales volume increased 22.7% year-on-year to 9,807 metric tons, while the total income increased 62.7% to INR 159.6 crores. EBITDA improved to INR 19.5 crores compared with a loss of INR 2.7 crores in Q1 FY26, resulting in an EBITDA margin of 12.2%. PAT also turned positive at INR 4.7 crores compared with a loss of INR 16.5 crores in the corresponding quarter last year. As Veba mentioned earlier, capacity utilization in BOPET film in Ester Industries stood at 85%. Capacity utilization in Ester Filmtech reached approximately 83%, which is the highest level so far. This resulted in a consolidated capacity utilization standing at 84%. Coming to the consolidated performance of the company.

Speaker #1: Sales volume increased 22.7% year-on-year to 9,807 metric tons, while total income increased 62.7% to ₹159.6 crore. EBITDA improved to ₹19.5 crore, compared with a loss of ₹2.7 crore in Q1 FY26, resulting in an EBITDA margin of 12.2%.

Speaker #1: PAT also turned positive at ₹4.7 crore, compared with a loss of ₹16.5 crore in the corresponding quarter last year. As Weber mentioned earlier, capacity utilization in BOPET film in Ester Industries stood at 85%.

Speaker #1: Capacity utilization in Ester Film Tech reached approximately 83%, which is the highest level so far. This resulted in consolidated capacity utilization standing at 84%.

Speaker #1: Coming to the consolidated performance of the company, consolidated total income increased 27.4% year-on-year to ₹441.9 crores, compared with ₹346.9 crores in Q1 FY26. Consolidated EBITDA increased 103.4% to ₹58.9 crores, with the EBITDA margin expanding to 13.3% from 8.3% in the corresponding quarter.

Sourabh Agarwal: Consolidated total income increased 27.4% year-on-year to INR 441.9 crores compared with INR 346.9 crores in Q1 FY26. Consolidated EBITDA increased 103.4% to INR 58.9 crores, with the EBITDA margin expanding to 13.3% from 88.3% in the corresponding quarter. Profit after tax turned positive at INR 18.6 crores compared with a loss of INR 7.2 crores in Q1 FY26. PAT margin stood at 4.2%. The improvement in consolidated profitability was broad-based with all businesses, including polyester chips, polyester film, specialty polymer rPET, contributing meaningfully to the operating profit, though polyester film segment remained the principal contributor. Within the film segment, consolidated revenue increased approximately 38% year-on-year to INR 399.4 crores, while segment EBIT increased significantly to INR 39.1 crore from INR 6.9 crores in Q1 FY26. Consequently, EBIT margin improved to 9.8% from 2.4%.

Speaker #1: Profit after tax turned positive at $18.6 crore, compared with a loss of $7.2 crore in Q1 FY26. PAT margin stood at 4.2%. The improvement in consolidated profitability was broad-based, with all businesses—including polyester chips, polyester film, specialty polymer, and RPET—contributing meaningfully to the operating profit, though the polyester film segment remained the principal contributor.

Speaker #1: Within the film segment, consolidated revenue increased approximately 38% year-on-year to ₹399.4 crore, while segment EBIT increased significantly to ₹39.1 crore from ₹6.9 crore in Q1 FY26.

Speaker #1: Consequently, EBITDA margin improved to 9.8% from 2.4%. Film volumes increased 2.7% year-on-year to 22,120 metric tons, while RPET volumes increased 19% to 1,394 metric tons.

Sourabh Agarwal: Film volumes increased 2.7% year-on-year to 22,120 metric tons while rPET volumes increased 19% to 1,394 metric tons. Specialty polymer SBU also continued to demonstrate the strength of its business model. While volumes and revenue were lower year-on-year, segment EBIT stood at INR 14.8 crores with EBIT margin improving significantly to 45.3% from 31.7%. This reflects the continued strength of specialty polymer business and its contribution to the overall quality of earnings. As on 30 June 2026, the gross total debt of the company was INR 722 crores and liquidity of INR 236 crores. The company aims to gradually deleverage in the coming years by paring its debt on an overall basis. Overall, the company has demonstrated resilient operational progress with enhanced margin and profitability during the quarter and setting the stage for improved profitability in the coming quarters. This concludes our opening remarks.

Speaker #1: The Specialty Polymer SBU also continued to demonstrate the strength of its business model. While volumes and revenue were lower year-on-year, segment EBIT stood at ₹14.8 crore, with EBITDA margin improving significantly to 45.3% from 31.7%.

Speaker #1: This reflects the country's strength in the specialty polymer business and its contribution to the overall quality of earnings. As of 30 June 2026, the gross total debt of the company was ₹722 crore, and liquidity stood at ₹236 crore.

Speaker #1: The company aims to gradually deleverage in the coming years by paring its debts on an overall basis. Overall, the company has demonstrated resilient operational progress with enhanced margin and profitability during the quarter, setting the stage for improved profitability in the coming quarters.

Speaker #1: This concludes our opening remarks. We can now commence the question and answer session. Thank you.

Sourabh Agarwal: We can now commence the question and answer session. Thank you.

Speaker #2: Thank you very much. We will now begin with a 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, you may press Star and then One now. Your first question comes from the line of Shlok Patel with ZenFlow Finance. Please go ahead.

Speaker #2: 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 #2: Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, you may press star, then one now.

Operator: Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, you may press Star and then One now. Your first question comes from the line of Shlok Patel with Windflow Finance. Please go ahead.

Speaker #2: Your first question comes from the line of Shlok Patil with Zenflow Finance. Please go ahead.

Shlok Patel: Hi. Can I audibly?

Speaker #3: Hi. Am I audited?

Speaker #4: Yes.

Vaibhav Jha: Yes.

Speaker #3: Yeah. Firstly, congratulations on good setup results. I just wanted to note, can we maintain a similar run rate for the rest of the three quarters? And were there any one-off gains in this quarter?

Shlok Patel: Yeah. Firstly, congratulations on good set of results. I just wanted to know that can we maintain similar run rate for the rest of three quarters? Were there any one-off gains in this quarter?

Speaker #4: Yeah, thanks for that question, Shlok. So yes, as you must have seen in the financial statements, there is an 'Other Income' component. Other than that, I think the industry structure is quite favorable to us on the BOPET film industry side.

Vaibhav Jha: Yeah. Thanks for that question, Shalok. Yes, as you must have seen in the financial statements, there is another income component. Other than that, I think the industry structure is quite favorable to us, on the BOPET film industry side. We are seeing very stable and reasonably priced global markets. We are seeing that there are enough opportunities to place volume profitably in India as well as across the world. We are also seeing opportunities to be at a sustained higher volumes compared to our past quarters because of the current supply-demand balance in the industry. All these give us confidence that we should have sustainable good earnings going forward, not only for the next three quarters, but I would go on to say for next six to eight quarters.

Vaibhav Jha: Yeah. Thanks for that question, Shlok. Yes, as you must have seen in the financial statements, there is another income component. Other than that, I think the industry structure is quite favorable to us, on the BOPET film industry side. We are seeing very stable and reasonably priced global markets. We are seeing that there are enough opportunities to place volume profitably in India as well as across the world. We are also seeing opportunities to be at a sustained higher volumes compared to our past quarters because of the current supply-demand balance in the industry. All these give us confidence that we should have sustainable good earnings going forward, not only for the next three quarters, but I would go on to say for next six to eight quarters.

Speaker #4: We are seeing very stable and reasonably priced global markets. We are seeing that there are enough opportunities to place volume profitably in India as well as across the world.

Speaker #4: And we are also seeing opportunities to maintain a sustained higher volume compared to our past quarters because of the current supply-demand balance in the industry.

Speaker #4: So, all these give us confidence that we should have sustainable, good earnings going forward—not only for the next three quarters, but I would go on to say for the next six to eight quarters.

Speaker #3: Okay, thanks. That helps. Another question: I just wanted to know about our goal for the next two to three years. As you said, the cyclicality has moved away and the industry is improving now.

Shlok Patel: Okay, thanks. That helps. Another question, just wanted to know about our goal for next two to three years. As you said that now the cyclicality has moved away and the industry is improving now. Once you mentioned that with our existing facilities, we can generate some INR 2,000 to INR 2,200 crores of revenue with our business segments. Just want to understand that which segments will drive these revenues, and how will margins come up in next two to three years as our product mix from value-added products will increase a lot, and also our existing capacities will get utilized more.

Speaker #3: And once you mentioned that with our existing facilities, we can generate about ₹2,000 to ₹2,200 crore of revenue with our business segments. I just want to understand which segments will drive this revenue, and how margins are expected to shape up over the next two to three years.

Speaker #3: As our product mix from value-added products increases significantly, our existing capacities will also be utilized more.

Speaker #4: Yeah. So you have answered the question in your question itself. So this increase in the revenue will be driven by multiple factors. So one is the price itself, like I said, that we are expecting that the global prices to hold at a higher level than what we have seen in the last two, three years.

Vaibhav Jha: Yeah. So you have answered the question in your question itself. This increase in the revenue will be driven by multiple factors. One is the price itself. Like I said that we are expecting that the global prices to hold at a higher level than what we have seen in the last two, three years. That itself is going to lead to improvement in revenue. Other than that, capacity utilization is going to improve, not only in films, but also in specialty polymers, going forward, as well as rPET. Third, as the share of specialty products increase in our product mix, these specialty products are usually much higher priced than the commodity products. As the proportion increases, it will automatically lead to increase in the revenue, because of the increase in the high price sales that we would be doing.

Speaker #4: So, that itself is going to lead to improvement in revenue. Other than that, capacity utilization is going to improve not only in films, but also in specialty polymers.

Speaker #4: Going forward, as well as rPET. Third, as the share of specialty products increases in our product mix, these specialty products are usually much higher priced than the commodity products.

Speaker #4: So, as the proportion increases, it will automatically lead to an increase in revenue because of the increase in the high-price sales that we would be doing.

Speaker #4: The fourth factor which is playing out is that as we march towards operational excellence, we are able to run the plants more efficiently and are able to derive more tonnage out of the same asset class that we have.

Vaibhav Jha: The fourth factor which is playing out is that, as we march towards operational excellence, we are able to run the plants more efficiently and are able to derive more tonnage out of the same asset class that we have. Even that is going to lead to better production and better sales volume. All of these put together are going to result in increasingly improved top line.

Speaker #4: So even that is going to lead to better production and better sales volume, and all of these put together are going to result in an increasingly improved top line.

Speaker #3: Okay. So is it fair to assume that in the next two to three years, we can achieve that target of ₹2,000 to ₹2,200 crore?

Shlok Patel: Okay. Is it fair to assume that in next two to three years we can achieve that target of INR 2,000 to 2,200 crores?

Speaker #4: Yeah, I think we are steadily marching towards that, and we should definitely be hitting there in the next two to three years.

Vaibhav Jha: Yeah, I think we are steadily marching towards that, and we should definitely be hitting there in next two to three years.

Speaker #3: Okay, thanks. I'll get back to the queue.

Shlok Patel: Okay, thanks. I will get back to the queue.

Speaker #2: Thank you. Participants, to ask a question, you may press star one now. Your next question comes from the line of Saransh Gupta.

Operator: Thank you. Participants, to ask a question, you may press star and one now. The next question comes from the line of Saransh Gupta with Swan Investments. Please go ahead.

Operator: Thank you. Participants, to ask a question, you may press star and one now. The next question comes from the line of Saransh Gupta with SVAN Investments. Please go ahead.

Speaker #2: Investments. Please go ahead.

Saransh Gupta: Thank you for the opportunity, sir. I hope I am audible.

Speaker #3: Thank you for the opportunity, sir. I hope I am audible.

Speaker #5: Yes, Saransh.

Vaibhav Jha: Yeah, Saransh.

Speaker #3: Yeah. Congratulations on a decent setup quarter, sir. Sir, I have a few questions. First of all, I just wanted a ground reality on the China anti-invasion policy that they have implemented. Have the imports declined?

Saransh Gupta: Yeah. Congratulations on a decent set of quarters, sir. I have few questions. First of all, I just wanted a ground reality on the China anti-involution policy that they have implemented. Have the imports declined and is that benefiting your sales price points?

Speaker #3: And is that leading— is that benefiting us in price goals?

Speaker #4: Okay, so let me address this question. See, in general, what has happened is that the global price situation has improved, simply because the trade flows are restricted right now, right?

Vaibhav Jha: Okay. Let me address this question. Okay, in general, what has happened is that the global price situation has improved simply because the trade flows are restricted right now. What we are seeing is that this set of factors which are playing are going to sustain. Multiple factors are leading to stability in the prices that we are seeing right now globally and also in India. In India specifically, if you see, there has been hardly any capacity addition in last couple of years. The capacity addition, I would say, has lagged the demand growth. We see this trend lasting for next two to three years. Especially in the local market, we see the demand-supply balance being strong, and similarly in global market, we see enough opportunity for Indian manufacturers to place their volumes profitably.

Speaker #4: And what we are seeing is that this set of factors which are playing are going to sustain. So multiple factors are leading to stability in the prices that we are seeing right now globally and also in India.

Speaker #4: In India, specifically, if you see, there has been hardly any capacity addition in the last couple of years. The capacity addition, I would say, has lagged behind the demand growth.

Speaker #4: And we see this trend lasting for the next two to three years. Especially in the local market, we see the demand-supply balance being strong, and similarly in the global market, we see enough opportunity for Indian manufacturers to place their volumes profitably.

Speaker #3: Understood, sir. Sir, what were the spreads last quarter?

Saransh Gupta: Understood, sir. Sir, what were the spreads last quarter?

Speaker #4: So, spreads last quarter were in the range of 28 to 30. And when I say spread, I mean VA—value-add over raw material for 12-micron film.

Vaibhav Jha: Spreads last quarter were in the range of INR 28 to 30. When I say spread, I mean VA, value add over raw material for 12-micron film.

Speaker #3: Understood. So, for the base BOPET film for 12 microns, the spreads would be around 7 to 8 rupees for the last quarter.

Saransh Gupta: Understood. For the base BOPET film for 12 micron, the spread would be around INR 7 to INR 8 for last quarter.

Speaker #4: So I said 28 to 30 rupees for 12-micron corona commodity film.

Vaibhav Jha: No, I said INR 28 to INR 30 for 12 micron corona commodity film.

Speaker #3: And sir, we have charged a higher premium of around 20 to 25 rupees on the value-added, right?

Saransh Gupta: And sir, we charge a higher premium of around INR 20 to INR 25 on the value-added, right?

Speaker #4: Yeah. So value-add products range from ₹25 to much, much higher levels, because it's a mix. The more specialized the product, the more value-add we are able to get out of it.

Vaibhav Jha: Yeah. So value-add products range from INR 25 to much, much higher levels because it's a mix. The more specialized the product, the more value add we are able to get out of it. There are offline coated products which command higher premium, much higher than the normal value-added products.

Speaker #4: There are offline quoted products which command a higher premium, much higher than the normal value-added products.

Speaker #3: Understood, sir. So, sir, with this China anti-invasion policy, will it be fair to assume that these spreads can sustain through year-end?

Saransh Gupta: Understood, sir. So sir, with this China anti-involution policy, will it be fair to assume that these spreads can sustain for the year-end?

Speaker #4: See, like I told you, we are very positive that for the next six to eight quarters, the global and domestic supply-demand balance is going to hold.

Vaibhav Jha: See, like I told you that we are very positive that for next six to eight quarters, the global and domestic supply-demand balance is going to hold. I think that is going to give us some respite, and is going to keep the margin steady.

Speaker #4: And I think that is going to give us some respite and is going to keep the margins steady.

Speaker #3: Understood, sir. So, sir, I just wanted to understand: currently, our value-added contribution in this quarter was 29%, which has been the highest since the implementation.

Saransh Gupta: Understood, sir. I just wanted to understand, like currently our value-added contribution in this quarter was 29%, which has been higher since the implementation. So what can the contribution be by the year-end? Is it going to be in the similar levels? We are aiming for 50% to 60% the next two, three years. But I just wanted to understand, like with exports being opened up for USA as well, so what can be the contribution by the year-end?

Speaker #3: So, what can the contribution be by the year-end? Is it going to be at similar levels? Like, we are aiming for 50 to 60 in the next two to three years.

Speaker #3: So, I just wanted to understand, with exports being opened up for the US as well, what can be the contribution by year-end?

Speaker #4: See, we are seeing up to 35% contribution of VAST products out of our own to the overall portfolio by the quarter end. I mean, in the exit quarter.

Vaibhav Jha: See, we are seeing up to 35% contribution of VAST products out of our own, up to the overall portfolio by the quarter end, I mean, in the exit quarter.

Speaker #3: Understood, sir. Sir, just one more question. In this quarter, have RPET volumes declined sequentially? I just wanted to understand what led to that decline.

Saransh Gupta: Understood, sir. Just one more question. Like in this quarter, our rPET volumes declined sequentially. So I just wanted to understand like what led to that decline?

Speaker #4: See, this is a temporary, I would say, slowdown because what you are seeing is external sales. And the external sales had to take a hit because the internal demand for RPET in our packaging films increased.

Vaibhav Jha: See, this is a temporary, I would say, slowdown because what you are seeing is external sales. The external sales had to take a hit because the internal demand for rPET in our packaging films increased. But we see that this situation should change in this quarter towards in September of this quarter, and this trend will be more visible in the quarter of October to December, wherein you will see a much larger rPET volume being sold externally.

Speaker #4: But we see that this situation should change. In the in this quarter towards in September of this quarter and this trend quarter of October to December wherein you will see much larger RPET volumes being sold externally.

Speaker #3: Understood. Sir, just one last question, then I'll come back in the queue. Sir, with our Elite Project being operational in calendar year '28, and in the next two months, we'll have the land back with us.

Saransh Gupta: Understood. Sir, just one last question then I will come back in the queue. Sir, with our ELITe project being operational in CY 2028, and in the next 2 months, we will have the land with us. I just wanted to understand that there are other competitors as well who are getting into the same segment of textile and textile recycling, and they have already set up the capacity. Will we be a bit late or will there be a competition by the time we are ready with the facility?

Speaker #3: So I just wanted to understand, there are other competitors as well who are getting into the same segment of textile-to-textile recycling, and they have already set up the capacity.

Speaker #3: So, will we be a bit late, or will there be competition by the time we are ready with the facility?

Speaker #4: See, first of all, the market for this type of product is very large, and the demand is very high. So, the space is there for many, many players.

Vaibhav Jha: See, first of all, the market for this type of product is very large and the demand is very high, so the space is there for many, many players. Number 2, the technology is fundamentally different and what we will be able to do is we will be able to process low-cost feedstock, which cannot be processed by our competitor technologies. That is the differentiator for us, and which is going to bring in the required economies and is going to create a much larger appeal for our customers. Just to expand on this factor a little bit more, the competitor technologies usually look for textile waste which are close to 100% polyester. There is a difficulty in processing when there is a blend along with polyester. If you look at any practical textile waste, it is always a blend of polyester.

Speaker #4: Number two, the technology is fundamentally different. And what we will be able to do is we will be able to process low-cost feedstock which cannot be processed by our competitor technologies.

Speaker #4: And that is the differentiator for us, which is going to bring in the required economies and is going to create a much larger appeal for our customers.

Speaker #4: So just to expand on this factor a little bit more, the competitor technologies usually look for textile waste which is close to 100% polyester.

Speaker #4: And there is a difficulty in processing when there is a blend along with polyester. And if you look at any practical textile waste, it is always a blend with polyester.

Speaker #4: Whereas our technology can manage any kind of blend with any kind of color, pigment, or dyes and give out virgin-like quality. Also, the maturity of this technology is far, far higher than our competing technologies in most cases.

Vaibhav Jha: Whereas our technology can manage any kind of blend with any kind of color, pigment, dyes and give out virgin-like quality. Also, the maturity of this technology is far, far higher than our competing technologies in most cases. Loop has been working on this technology for a long period of time, for more than 10 years. They have scaled up to a small scale plant in Canada where all the practical textile waste has been processed, all possible combination has been checked, and not only by us as a joint venture partner, but also by these customers who are going ahead and giving large volume contracts to us 1 and a half years ahead of the plant commissioning.

Speaker #4: Loop has been working on this technology for a long period of time, for more than 10 years. They have scaled up to a small-scale plant in Canada.

Speaker #4: All the practical textile waste has been processed, all possible combinations have been checked, and not only by us as a joint venture partner, but also by these customers who are moving ahead and giving large volume contracts to us one and a half years ahead of the plant commissioning.

Speaker #4: So, the maturity definitely is at a different scale. And therefore, I would say the production confidence, in terms of being able to process the waste and hit the rated capacity, is much higher in our case, and the economics are much more—I would say we are more confident about the economics in our case than the competing technologies.

Vaibhav Jha: The maturity definitely is at a different scale and, therefore, I would say the production confidence in terms of being able to process the waste and hitting the rated capacity is much higher in our case. I would say, we are more confident about economics in our case than the competing technologies.

Speaker #3: And there is another point. We are targeting to park all our volumes coming out from the Elite Project outside of India. We are not sure, or we are not aware, of the marketing strategy of the competitor.

Sourabh Agarwal: And there is another point. We are targeting to park all our volumes coming out from the ELITe project outside of India. We are not sure, or we are not aware of the marketing strategy of the competitor. But for us, the entire production is going to be exported.

Speaker #3: But for us, the entire production is going to be exported. Understood, sir. So, just to close it up, sir, it would be a good assumption that we'll also have a better premium to the market at that moment when we are available with the facility.

Saransh Gupta: Understood, sir. So just to close it up, it will be a good assumption that we will also have a better premium to the market at that moment when we are available with the rest of it.

Speaker #4: Absolutely.

Vaibhav Jha: Absolutely.

Speaker #3: Thank you, sir. I'll join back the queue and all the rest.

Saransh Gupta: Thank you, sir. I will join back with you. And all the best.

Speaker #1: Thank you. The next question comes from the line of Raj Shah with Vedant AMC. Please go ahead.

Operator: Thank you. The next question comes from the line of Raj Shah with Edent AMC. Please go ahead.

Operator: Thank you. The next question comes from the line of Raj Shah with ENAM AMC. Please go ahead.

Speaker #5: All right, thank you for the opportunity. So I wanted to understand from a two- to three-year view, how do you see the RPET volumes? Now that we have a 28,000 capacity, over the next two to three years...

Raj Shah: Hi. Thank you for the opportunity. I wanted to understand from a two to three-year view, how do you see the rPET volumes? Now we have a 28,000 ton capacity. Over the next two to three years, do we plan to reach optimal utilization of, and revenues of close to INR 400 crores? What can be the margins of those revenues?

Speaker #5: Do we plan to reach optimum utilization and revenues of close to ₹400 crores? And what can be the margins at this point?

Speaker #4: See, I think let me clarify about RPET. So the major logic of investing in RPET for us was in-house consumption. However, we saw a demand for high-quality RPET in the market which was very which was not being fulfilled by many of the existing players.

Vaibhav Jha: See, let me clarify about rPET. The major logic of investing in rPET for us was in-house consumption.

Raj Shah: Uh-hmm.

Vaibhav Jha: However, we saw a demand for high-quality rPET in the market, which was not being fulfilled by many of the existing players. Therefore, we thought of utilizing that opportunity to make bottle-grade rPET and other filament textile-grade rPET. That is, to be honest, more of a secondary objective for us. Our objective is to derive value with our in-house consumption. Having said that, I think the right measure of knowing how we are doing with respect to rPET would be the value generated by rPET through external sales as well as internal utilization. Let me tell you that, giving you approximate numbers right now, we are producing much larger volumes than what we were producing last year. We are extremely confident that we will hit more than 100% of the rated capacity by the exit quarter of this financial year.

Speaker #4: And therefore, we thought of utilizing that opportunity to make bottle-grade rPET and other filament textile-grade rPET. But that is, to be honest, more of a secondary objective for us.

Speaker #4: Our objective is to derive value with our in-house consumption. Having said that, I think the right measure of knowing how we are doing with respect to RPET would be the value generated by RPET.

Speaker #4: Through external as well as internal utilization—external sales as well as internal utilization. So let me tell you, just giving you approximate numbers right now, we are producing much larger volumes than what we were producing last year.

Speaker #4: And we are extremely confident that we will hit more than 100% of the rated capacity by the exit quarter of this financial year. So a lot of it won't be visible in the financial statements, because it will be used internally.

Vaibhav Jha: A lot of it won't be visible in the financial statements because it would be used internally, but a large part will be observed in the external sales. Like I said, the logic for us is the internal consumption as much as the external sales.

Speaker #4: But a large part will be observed in the external sales. But like I said, the logic for us is the internal consumption as much as the external sales.

Speaker #5: Understood. I'm in specialty polymers. We saw margins up close to 12–13% on a year-on-year basis. So, I mean, these margins are sustainable at these levels because the value-added share is increasing.

Raj Shah: Understood. On specialty polymers, we saw margins up close to 12%, 13% on a year-on-year basis. So these margins are sustainable at these levels because the value-added share is increasing? What could be the full year kind of margin for Ester 2027, assuming the prices remain the same?

Speaker #5: Or what could be the full-year kind of margins for FY27? Assuming, I mean, the prices stay at these levels.

Speaker #4: Yeah. See, right now, the share of WAP is at a much smaller scale because we have built a pipeline, and this pipeline takes some time to mature.

Vaibhav Jha: Yeah. See, right now the share of VAP is at a much smaller scale because we have built a pipeline and this pipeline takes some time to mature. Therefore, the influence of mid-margin VAP is not too apparent. But you are right. As we go forward, we are going to see some moderation of the percentage margins, right? Because the mid-margin is going to pull down the high specialty margins a little bit in percentage terms. But because of the improving operating leverage, we are going to see better financials in terms of EBITDA or EBIT because we are essentially just improving the capacity utilization and improving the operating leverage. But I think we should focus more on the absolute top-line growth as well as absolute EBITDA growth and EBIT growth.

Speaker #4: And therefore, the influence of mid-margin WAP is not too apparent. But you are right. As we go forward, we are going to see some moderation of the percentage margins, right?

Speaker #4: Because the mid-margin is going to pull down the high specialty margins a little bit in percentage terms. But because of the improving operating leverage, we are going to see better financials in terms of EBITDA or EBIT, because we are essentially just improving the capacity utilization.

Speaker #4: And improving the operating leverage. But I think we should focus more on the absolute top-line growth, as well as absolute EBITDA growth and EBIT growth.

Speaker #5: Understood. And last, lastly, in terms of debt repayment, what is the targeted debt repayment for this year? And for the Elite also, would we require any additional debt?

Raj Shah: Understood. Lastly, in terms of debt repayments, what is the targeted debt repayments for this year? For the ELITe also, would we require any additional debt?

Speaker #3: So this year, the debt repayment target is around ₹100 crore. And as far as Elite is concerned, as you are aware, it's a separate project other than Ester.

Sourabh Agarwal: So this year, the debt repayment target is around INR 100 crores. As far as ELITe is concerned, as you are aware that it's a separate project other than Ester. It's a joint venture between Loop Industries Canada and Ester. So there is going to be additional debt which will be raised in the JV company, not in Ester balance sheet.

Speaker #3: It's a joint venture between Loop Industries, Canada, and Ester. So, there is going to be additional debt. We should be raising it in the JV company.

Speaker #3: Not in Esther balance sheet.

Speaker #4: And it will not be consolidated with Ester because it's a 50:50 JV.

Vaibhav Jha: It will not be consolidated with Ester because it is a 50/50 JV.

Speaker #5: Correct. Correct. Understood. Understood. And X-Software JV, there is no major capex for extra 27.

Raj Shah: Correct. Understood. Ex of the JV, there is no major CapEx for Ester 2027.

Speaker #3: Sorry, can you repeat the question?

Sourabh Agarwal: Sorry, can you repeat the question?

Speaker #5: X-Software JV, there is no major capex for the extra 27 in the standalone and polymer.

Raj Shah: Ex of the JV, there is no major CapEx for Ester 2027 in the standalone and polymers.

Speaker #3: No, no. So apart from sustenance and maintenance capex, we are not planning any major capex.

Sourabh Agarwal: No. Apart from our sustenance and maintenance CapEx, we are not planning any major CapEx.

Speaker #5: Understood. Okay, thank you so much.

Raj Shah: Understood. Okay. Thank you so much.

Speaker #1: Thank you. The next question comes from the line of Churchill Malu with Genuity Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Harshit Maloo with Genuity Capital. Please go ahead.

Speaker #5: Hi sir, thanks a lot for the opportunity. Sir, can you give me the slip of other income, like the ₹10 crore per slip?

Harshit Maloo: Hi, sir. Thank you a lot for the opportunity. Sir, can you give me the split of other income, like the INR 10 crores split?

Charchit Maloo: Hi, sir. Thank you a lot for the opportunity. Sir, can you give me the split of other income, like the INR 10 crores split?

Speaker #3: So the other income basically comprises of our income from our investments and as you know that we have got a total cash available with us in plus of 200 crores.

Sourabh Agarwal: The other income basically comprises of our income from our investments, and as you know that we have got a total cash available with us in plus of INR 200 crores. That is number one. Second, the other income also comprises of the favorable gains on the foreign exchange, which we have got, which was a negative in the last quarter.

Speaker #3: That is number one. Second, the other income also comprises the favorable gains on the foreign exchange, which we have got, whereas it was a negative in the last quarter.

Speaker #5: Okay, like, I'm just—if you can give the guidance for FY27 and FY28, that is, the revenue with the MPAC.

Harshit Maloo: Okay. If you can give the guidance for FY27 and FY28, that is revenue, EBITDA, and PAT.

Charchit Maloo: Okay. If you can give the guidance for FY27 and FY28, that is revenue, EBITDA, and PAT.

Speaker #3: Can you repeat the question? I'm sorry, the line is a little disturbed.

Sourabh Agarwal: Can you repeat the question? I am sorry. The line is a little disturbed.

Speaker #5: Can you give the guidance for FY27 and FY28 revenue evidence of that?

Harshit Maloo: Can you give the guidance for FY27 and FY28 of revenue, EBITDA, and PAT?

Charchit Maloo: Can you give the guidance for FY27 and FY28 of revenue, EBITDA, and PAT?

Speaker #4: So, I think what we can say is that we are looking at sustainable growth in revenues and our profitability. But at this point in time, we would just hold back from giving very firm guidance on the specific revenue and EBITDA numbers.

Vaibhav Jha: I think what we can say is that, we are looking at sustainable growth in revenues and our profitability. But at this point in time, we would just hold back from giving very firm guidance on the specific revenue and EBITDA numbers.

Speaker #5: Okay. Thank you.

Harshit Maloo: Okay. Thank you.

Charchit Maloo: Okay. Thank you.

Vaibhav Jha: That's it. Does that answer all your questions?

Speaker #1: Churchill, does that answer all your questions?

Vaibhav Jha: That's it. Does that answer all your questions?

Speaker #5: Yeah, yeah, that's it. Thank you.

Harshit Maloo: Yeah. That's it. Thank you.

Charchit Maloo: Yeah. That's it. Thank you.

Speaker #1: Thank you. Thank you. We remind all the participants, if you wish to register for a question, you may press star, then one. Your next question comes from the line of Saqib Kapoor with Kapoor Company.

Operator: Thank you. We remind all the participants if you wish to register for a question, you may press star and then one. The next question comes from the line of Saket Kapoor with Kapoor and Company. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Yeah. Namaskar, sir.

Saket Kapoor: Yeah. Namaskar, sir. I hope I am audible.

Speaker #4: Yeah, yeah.

Vaibhav Jha: Yeah.

Saket Kapoor: Yes, sir. Yeah. Sir, firstly, coming to the other income part. Saurabh, you mentioned this is out of the treasury operation, so can you elaborate more since we are also on a net off, how do these income got generated and what is the forex exchange benefit included into it?

Speaker #2: Yeah. Sir, firstly, coming to the other income part, Saurabhji, you mentioned this is out of the treasury operation. So, can you elaborate more, since we are also net off? How did this income get generated, and what is the forex exchange benefit included in it?

Speaker #3: Yeah. So, the other income, Saqibji, if you remember, in the last quarter there was pressure on the other income in terms of negative foreign exchange loss.

Sourabh Agarwal: Yeah. So the other income, Saket, if you remember in the last quarter, there was a pressure on the other income in terms of negative foreign exchange loss, as well as we also had some negative return on our mutual fund investments in the last quarter. In this quarter, we have a positive return on the investment as well as a favorable gain on a foreign exchange, because of which the other income is looking on a higher side. But again, this is a one-time gain. On a sustainable basis, you are not going to see this high number on a quarter-on-quarter basis.

Speaker #3: We also had some negative return on our mutual fund investments in the last quarter. In this quarter, we have a positive return on the investments as well as a favorable gain on our foreign exchange.

Speaker #3: Because of this, the other income appears to be on the higher side. But again, this is a one-time gain; on a sustainable basis, you're not going to see this high number on a quarter-on-quarter basis.

Saket Kapoor: Okay. Can you give the split of the same? How much was the foreign exchange contribution and the treasury? And sir, since we are having debt, what is our book size currently for mutual funds we have invested into?

Speaker #2: Can you give the split of the same? How much was the foreign exchange contribution and the treasury? And, sir, since we are having debt, what is our book size currently for mutual funds?

Speaker #2: We have invested into.

Speaker #3: The total book size for our mutual funds is around ₹60 crore, and the total FD that we have right now is more than ₹160 crore.

Sourabh Agarwal: The total book size for mutual funds is around INR 60 crores and the total FD that we have right now is more than INR 160 crores.

Saket Kapoor: Okay. What is the gross-

Speaker #3: So, if you remember, Saqibji—yeah, I will explain. If you remember, Saqibji, we have already raised money for the purpose of equity contribution in our joint venture, right?

Sourabh Agarwal: Yeah, I will explain this. Remember, Saket, we have already raised money for the purpose of equity contribution in our joint venture. Right? So there was share warrant which the company has raised, and we have already got the money in our bank account. The primary driver for our other income is mainly because of the interest on that piece.

Speaker #3: So there was a share warrant which the company has raised, and we have already got the money in our bank account. So, the primary driver for our other income is mainly because of the interest on that piece.

Speaker #2: Okay, okay. Do you have the split set? How much was from the treasury and the FD interest? I mean, I just wanted the 9.8 split between forex, treasury, and the treasury part.

Saket Kapoor: Okay. Do you have the split, sir, how much was from the treasury and the FD interest? I just wanted 9.8 split between forex, treasury, and forex in the current market.

Speaker #3: Yeah, yeah. So if you want, I can give you an overall split on treasury. It was around ₹3 crore, and interest on FD and other investments is around ₹3.5 crore.

Sourabh Agarwal: Yeah. If you want, I can give you an overall split. On treasury it was around 3 crores, and interest on FD and other investments is around 3.5 crores. Then there is certain other income. The foreign exchange gain is around 1 CR, and then there are balance other income.

Speaker #3: And then there's certain other income. The foreign exchange gain is around ₹1 crore, and then there is balance other income.

Saket Kapoor: Okay. And sir, we are seeing that we have INR 100 crore repayment for this year. What is the current net debt number and what will be the closing balance for the year, expected closing balance?

Speaker #2: Okay. And sir, we are seeing that we have a ₹100 crore repayment for this year. So, what is the current net debt number and what would be the closing balance for the year?

Speaker #2: Expected closing balance?

Speaker #3: Yes. So our gross debt is ₹720 crores, which is going to come down by ₹100 crores by the end of the year. We will have a gross debt of ₹620 crores.

Sourabh Agarwal: Yes. Our gross debt is INR 720 crores, which is going to come down by INR 100 crores. By the end of the year, we will have a gross debt of INR 620 crores. The current cash and cash balance, which we have right now, is INR 235 crores.

Speaker #3: And the current cash and cash balance, which we have right now, is ₹235 crore.

Speaker #2: Okay. So, the net debt number—can we keep this 230 will be remaining, or?

Saket Kapoor: Okay. So net debt number, we can keep this INR 230 will be remaining for

Speaker #3: No. So, a part of this—so as I told you, ₹140 crores out of this will be for the GV. So, as and when we invest in the GV, this liquidity will go away.

Sourabh Agarwal: No. So a part of this, as I told you, INR 140 crore part of this

Saket Kapoor: Yeah, JV

Sourabh Agarwal: for the JV. So as and when we invest in the JV, this liquidity will go away. So around INR 100 crores is what is the sustainable liquidity that we will have.

Speaker #3: So, around 100 crores is what we expect to have as sustainable liquidity.

Speaker #2: Okay, correct. And sir, as you were mentioning that further capacity addition may need the BOPET, I think so. Lastly, one of your competitors in the DOPP segment added BOPET slim capacity last year, or I think for this year itself.

Saket Kapoor: Okay. Correct. And sir, Saurabh, you were mentioning that further capacity addition isn't there yet in BOPET. I think so. Lastly, one of your competitors in the BOPET segment added BOPET film capacity last year or I think for this year itself. So taking into account the current dynamics, there is no further lines that are coming up for the current financial year. That is what we understanding, Saurabh?

Speaker #2: So, taking into account the current dynamics, there are no further lines that are coming up for the current financial year. That is what the understanding should be.

Speaker #4: Yeah. So, Saqibji, what I had said was that there have been very few capacity additions, and the capacity additions have lagged the demand growth.

Vaibhav Jha: Yeah. Saket, what I had said was that, there has been very few capacity additions and the capacity additions have lagged the demand growth. What I mean is demand growth has been more than the capacity addition. So two lines have come up in last one and a half years, but the growth has been far more than the capacity that they brought on stream. We are expecting another two to three lines coming up in next one and a half, two years. But again, if you look net-net, the supply-demand balance is going to only tighten. Because there is a very strong BOPET demand growth happening in India. And we are seeing some green shoots in Europe also. Mainly because of the Plastic Waste Management Rules in India, which is leading to the brand switching over from other substrate to BOPET to meet their sustainability targets.

Speaker #4: So, what I mean is demand growth has been more than the capacity addition. Two lines have come up in the last one and a half years.

Speaker #4: But the growth has been far more than the capacity that they brought on stream. We are expecting another two to three lines coming up in the next one and a half to two years.

Speaker #4: But again, if you look net-net, the supply-demand balance is only going to tighten because there is very strong BOPET demand growth happening in India.

Speaker #4: And we are seeing some green shoots in Europe also, mainly because of the plastic waste management rules in India, which are leading to brands switching over from other substrates to BOPEC.

Speaker #4: To meet their sustainability targets. And a similar trend—it's very early to say—but we are seeing some green shoots of something similar happening in Europe as well.

Vaibhav Jha: And a similar trend has. It's very early to say, but we are seeing some green shoots of something similar happening in Europe as well. So, that is why the demand growth in India at least is at a much higher level than the capacity addition.

Speaker #4: So, that is why the demand growth in India, at least, is at a much higher level than the capacity addition.

Speaker #2: Okay. So sir, do you have the numbers for the entire industry domestically? What is the installed capacity for BOPEC and the current utilization level for the industry?

Saket Kapoor: Okay. So sir, do you have the number of, for the entire industry, for domestically, what is the installed capacity for BOPET and the current utilization level for the industry?

Vaibhav Jha: The total capacity should be around 1.35 million tonnes. The operating rate is well in around, let's say 85% or so, because a lot of it is also exported out of India. Right now, the way trade flows are lined up, Indian manufacturers are going to see enough opportunity to keep sustained levels of profitable exports.

Speaker #4: Maybe total capacity should be around 1.35 million tons, and the operating rate is well in around, let's say, 85% or so because a lot of it is also exported out of India. Right now, the way trade flows are lined up, Indian manufacturers are going to see enough opportunity to keep sustained levels of profitable exports.

Speaker #2: Okay. Now, sir, coming to the security polymer part, correct me here. So, you mentioned that our revenue guidance is 20% to 25% for this year, or are you committing on the margin part?

Saket Kapoor: Okay. Now sir, coming to the specialty polymer part. Correct me here, sir, you mentioned that our revenue guidance is 20% to 25% for this year or you are committing on the margin part? I missed your comment.

Speaker #2: I missed your comment.

Speaker #4: No, so 20%. Sorry, sorry. Go ahead, Saqibji.

Vaibhav Jha: No. So the 20%

Vaibhav Jha: No. So the 20%. Sorry. Go ahead, Saket.

Saket Kapoor: Sorry. Go ahead, Saket.

Vaibhav Jha: Yeah. Saketji, what we were saying was that we are seeing a 20% CAGR over next 3 to 5 years. We are not saying it for this year, mainly because we are seeing some demand pressures on one of our high specialty products. Having looked at the other pipeline products that we have and the way market is set up, we are extremely confident that we should be gaining the lost demand in terms of sales of other products by the exit quarter of this year. Going forward, we should be hitting 20% plus CAGR.

Saket Kapoor: Yeah. Later I'll continue.

Speaker #2: Yeah. No, sir. Go ahead, sir. I will listen.

Speaker #4: Yeah. So, Saqibji, what we were saying is that we are seeing a 20% CAGR over the next three to five years. We are not saying it for this year.

Vaibhav Jha: Saketji, what we were saying was that we are seeing a 20% CAGR over next 3 to 5 years. We are not saying it for this year, mainly because we are seeing some demand pressures on one of our high specialty products. Having looked at the other pipeline products that we have and the way market is set up, we are extremely confident that we should be gaining the lost demand in terms of sales of other products by the exit quarter of this year. Going forward, we should be hitting 20% plus CAGR.

Speaker #4: Mainly because we are seeing some demand pressure on one of our high specialty products. But having looked at the other pipeline products that we have and the way the market is set up, we are extremely confident that we should be gaining a lot of demand in terms of sales of other products.

Speaker #4: By the exit quarter of this year, and then going forward, we should be hitting 20% plus CAGR.

Speaker #2: So sir, just to understand further, on a top line of Rs. 180 crore for the last financial year, we did Rs. 32–33 crore for the first quarter.

Saket Kapoor: Sir, just to understand further, on a top line of INR 180 crore for the last financial year, we did INR 32, INR 33 crore for the first quarter. Then you are saying that there is some demand issue going ahead. What is in the likelihood, this is going to be a flat year then for the specialty polymers with normalized margins going ahead? Or because these margins are also, I think so because of some product mix advantage that we got these extra nominal margins of 40% and above. If you would just explain to us where are we heading?

Speaker #2: And then you were saying that there is some demand issue going ahead. So what is the likelihood—is this going to be a flat year, then, for the specialty polymers, with normalized margins going ahead?

Speaker #2: Or, because these margins are also, I think so, because of some product mix advantage, that we got these extra nominal margins of 40% and above.

Speaker #2: If you would just explain to us, where are we heading?

Speaker #4: Yeah. So, right, right. Sure. So, see, what we are seeing is that we are going to be at least flat or get a single-digit growth in this financial year.

Vaibhav Jha: Right. Sure. See, what we are seeing is that we are going to be at least at a flat or get a single-digit growth in this financial year. Because lot of our pipeline is going to mature in the second half of the year, especially towards the last quarter. We will see improvement in top line as we go through the year, especially as we go deep into the second half of the year. Going into the next financial year, we are going to see good CAGR revenue growth and profitability growth. Like I mentioned that our focus is on improving the operating leverage here. While you might see some normalization in EBIT percentage, EBITDA percentage, absolute number of EBITDA and EBIT should start growing significantly, starting from next financial year.

Speaker #4: Because a lot of our pipeline is going to mature in the second half of the year, especially towards the last quarter, we will see improvement in top line as we go through the year, particularly as we go deeper into the second half of the year.

Speaker #4: But going into the next financial year, we are going to see good CAGR revenue growth and profitability growth. Like I mentioned, our focus is on improving the operating leverage here.

Speaker #4: So, while you might see some normalization in EBIT percentage and EBITDA percentage, the absolute numbers for EBITDA and EBIT should start growing significantly starting from the next financial year.

Speaker #2: Okay. So sir, just to model it, last year's margins in specialty polymers—will we be able to match those numbers, or can we expect some growth there?

Saket Kapoor: Okay. Sir, just to model it, last year margins, specialty polymers case, we will be able to match those number or we can expect some growth there? I think

Speaker #2: I think last year was.

Vaibhav Jha: Yeah.

Saket Kapoor: Last year was also

Speaker #4: Yeah, yeah. So, it would be either—we will be, yeah. So, what we are seeing is that we should be able to match and probably clock some single-digit growth by the time we finish the year.

Vaibhav Jha: Yeah. So what we are seeing is that we should be able to match and probably clock some single-digit growth by the time we finish the year.

Speaker #2: In margins also?

Saket Kapoor: In margins also?

Speaker #4: Yes, because WAP products have larger volume, though the margin might be lower. But volumes are larger.

Vaibhav Jha: Yes. Because VAP products have larger volume. Though the margin might be lower, but volumes are larger.

Speaker #2: Got it. Right, sir. Sir, and...

Saket Kapoor: Correct. Right, sir. Sir, and

Speaker #3: Sorry to interrupt, Saqibji sir. We request you to—

Operator: Sorry to interrupt there, Saket sir. We request you to conclude.

Speaker #2: Yes, sir. Yeah, yeah, yeah. Yes, sir. I would.

Saket Kapoor: Yeah. Yes, sir, I will.

Speaker #3: Thank you. Your next question comes from the line of Amit Kumar with Determined Investment. Please go ahead.

Operator: Thank you. Your next question comes from the line of Amit Kumar with Uttam India Investments. Please go ahead.

Speaker #2: Yeah. Thank you so much, sir. Can you hear me?

Amit Kumar: Yeah. Thank you so much, sir. Can you hear me?

Speaker #4: Yes.

Vaibhav Jha: Yes.

Speaker #2: Yeah, okay. Amit sir, my first question is with respect to your raw material sourcing. So, two parts to it. One is, how are you looking at the availability scenario right now?

Amit Kumar: Yeah. Okay. Amit, my first question is with respect to your raw material sourcing. Two parts to it. One is that, how are you looking at the availability scenario right now? Second sort of related question is that, few projects on PTA, MEG sort of coming in India as well, GAIL, Indian Oil Corporation, Reliance Industries Limited, few projects in the pipeline. Slightly delayed, what I made to understand, but something is coming, some capacity is coming in India itself this year. Have you tied up with any of these players, any of these capacities, just to sort of localize your raw material in future and maybe

Speaker #2: And second, a sort of related question is that if you see projects on PTA, MEG—any of these—coming up in India as well? Yara, IOC, RIL, a few projects in the pipeline?

Speaker #2: It was slightly delayed, from what I understand, but something is coming—some capacity is coming in India itself this year. So, have you tied up with any of these players, any of this capacity, just to sort of localize your raw material in the future, and maybe get a little bit of protection from the kind of volatility that we have seen in the past?

Vaibhav Jha: So-

Amit Kumar: little bit protection from the kind of volatility that we have seen in the past?

Speaker #4: So, we have long-term contracts and we are sourcing all our requirements of PTA and MEG locally. So, we have long-term contracts with the suppliers of PTA and MEG, which ensures that we generally don't run short of the requirements that we have.

Vaibhav Jha: We have long-term contracts, and we are sourcing all our requirement of PTA and MEG locally.

Amit Kumar: Okay.

Vaibhav Jha: We have long-term contract with the suppliers of PTA and MEG, which ensures that we generally don't run short of the requirement that we have. As far as the new capacities are concerned, nothing is going to be up and running before December of this year. The annual contracts that we have, they are January to December. As and when the new-

Speaker #4: As far as the new capacities are concerned, nothing is going to be up and running before December of this year. And the annual contracts that we have—they are January to December.

Speaker #4: So, as and when the new—yeah, yeah, this is what I'm coming to. So, we are already in discussion with Yale, which is likely to start by the end of this calendar year.

Amit Kumar: For the next year you can maybe tell us.

Vaibhav Jha: Yeah. This is what I am coming to. We are already in discussion with GAIL (India) Limited, which is likely to start by end of this calendar. Indian Oil Corporation will take some more time to start. Reliance Industries Limited is still some time away. On the MEG, there is no new capacity coming up, but all our requirement is getting met from the existing suppliers because polyester film is not a large consumer of PET and MEG, unlike the PET resin or yarn. We have our raw material tied up, which is getting reflected in the operations of the first quarter, where we did not lose any production because of the availability issues.

Speaker #4: And the Indian Oil will take some more time to start. Reliance is still some time away. On the MEG, there is no new capacity coming up.

Speaker #4: But all our requirements are being met by the existing suppliers because polyester film is not a large consumer of PTA and MEG, unlike PET resin or yarn.

Speaker #4: So, we have our raw material tied up, which is being reflected in the operations of the first quarter, where we did not lose any production.

Speaker #4: Because of the availability issues.

Speaker #2: All right. Understood, sir. Sir, my second question is whether you can give us an update on the PWM waste management rules.

Amit Kumar: All right. Understood. Sir, my second question is just if you can sort of give us an update on the Plastic Waste Management Rules, what is the current sort of situation? Our sort of understanding is that although the government has sort of implemented those rules, but it's not clear whether there is complete acceptability of those rules at the industry level. I mean, there is a little bit of flexibility which is available on how much of rPET you need to sort of use now and how much you can sort of do and you can sort of catch up later or stuff like that. Can you just sort of explain what is the current sort of status of the implementation of the rules really in terms of what is there on paper and what is the situation on the ground, please?

Speaker #2: What is the current sort of situation? And so I sort of understanding is that although the government has sort of implemented those rules, but it's not clear whether there is complete acceptability of those rules at the industry level.

Speaker #2: I mean, there is a little bit of flexibility which is available on how much of ARPEC you need to sort of use now and how much you can sort of do.

Speaker #2: And you can sort of catch up later or stuff like that. So, can you just sort of explain what is the current sort of status of the implementation of the rules, in terms of what is there on paper and what is the situation on the ground, please?

Speaker #4: Yeah, sure. See, we need to differentiate on two aspects of the question that you are asking. One is the usage of ARPEC in the laminates, due to PWMR.

Vaibhav Jha: Yeah, sure. See, we need to differentiate on two aspects of the question that you are asking. One is the usage of rPET in the laminates due to Plastic Waste Management Rules, and second is what the brands are doing to be better prepared for stricter enforcement of this Plastic Waste Management Rules. The recycled content in the films, you are right that the enforcement is yet to be done. But we work with leading brands who are not going to be non-compliant with these rules, whether the government is strict with the enforcement or not. This is where the major pull for the recycled PET-based film is coming from. Also, all brands, big and small, are gradually switching, not gradually, but rather rapidly switching from other substrate to polyester film substrate so that they can keep the laminates ready.

Speaker #4: And second is what the brands are doing to be better prepared for stricter enforcement of this PWMR. So, the recycled content in the films, you are right that the enforcement is yet to be done.

Speaker #4: But we work with leading brands who are not going to be non-compliant with these rules, whether the government is strict with enforcement or not.

Speaker #4: And this is where the major pull for the recycled PET-based film is coming from. Also, all brands, big and small, are rapidly switching from other substrates to polyester film substrate—not gradually, but rather rapidly.

Speaker #4: So that they can keep the laminates ready, and in case there is tighter scrutiny from the government and the compliance is enforced even more strictly, they can rapidly switch to ARPEC content-based films, right?

Vaibhav Jha: In case there is a tighter scrutiny from the government and the compliance is enforced even more strictly, they can rapidly switch to rPET content-based films. Right? This is leading to increase in BOPET film demand much beyond what the usual growth that we used to see. I hope I was able to give you a perspective on the question that you asked.

Speaker #4: So, this is leading to an increase in BOPET film demand, much beyond the usual growth that we used to see. I hope I was able to give you a perspective on the question that you asked.

Speaker #2: Yes, yes, very much so. Thank you so much.

Amit Kumar: Yes. Very helpful. Thank you so much.

Speaker #4: Yeah. All right. Thanks.

Vaibhav Jha: All right, thanks.

Speaker #3: Thank you. Your next question comes from the line of B. Surendra, an individual investor. Please go ahead.

Operator: Thank you. The next question comes from the line of B Surender, an individual investor. Please go ahead.

Speaker #2: Hello. Good evening. Thank you for taking my question. My question is on ARPEC capacity. What is our rated capacity?

B Surender: Hello, good evening.

Vaibhav Jha: Good evening.

B Surender: Thank you for taking my question. My question is on rPET capacity. What is your rated capacity?

Speaker #4: Our rated capacity should be somewhere in the range of 28,000 tons.

Vaibhav Jha: Our rated capacity should be somewhere in the range of 28,000 tons.

Speaker #2: So, sir, the question is: What is the timeline to achieve that?

B Surender: Sir, what is the timeline to achieve that?

Speaker #4: So, as I explained, we are already running at a very high throughput. It is not very apparent in the financial reports because a lot of it is being used internally.

Vaibhav Jha: See, like I explained that we are already running at a very high throughput. It is not very apparent in the financial reports because a lot of it is being used internally as a raw material for our films, right? But we should be going beyond the capacity utilization by the exit quarter of this financial year. So we should be producing more than the rated capacity. That's what we are seeing.

Speaker #4: As part of—as a raw material for our films, right? But we should be going beyond the capacity utilization by the exit quarter of this financial year.

Speaker #4: So, we should be producing more than the rated capacity. That's what we are seeing.

Speaker #2: Sir, one more question: is there any backward integration for our Telangana plants?

B Surender: Sir, one more question is that, is there any backward integration for our Telangana plant?

Speaker #4: So right now, you can call the recycled PET extruder, which we have put there, as a backward integration. But if you mean, do we have an EP unit, then we don't have anything localized there.

Vaibhav Jha: Right now, you can call the recycled PET extruder, which we have put there as a backward integration. But if you mean if we have a CP unit, then we do not have anything localized there. But we are feeding Hyderabad from our in-house capacity of raw materials in Khatima. That way, to that extent, majority of Hyderabad's raw material requirements are catered in-house.

Speaker #4: But we are feeding Hyderabad from our in-house capacities of raw materials in Khatima. So, in that way, to that extent, the majority of Hyderabad's raw material requirements are catered to in-house.

Speaker #2: Okay, sir. One more question is on our specialized polymer. Sir, are there any new inventions?

B Surender: Okay. Sir, one more question on our specialized polymer. Sir, any new inventions there?

Speaker #4: So yes, I think this year also we filed a few patents on new products. So, invention is a way of life for us in the specialty polymers segment.

Vaibhav Jha: Yes. I think this year also we filed a few patents on new products. So invention is a way of life for us in the specialty polymer. The challenge is on the gestation period, which is very, very high for such novel inventions. But we continue to invest very heavily in R&D, and we continue to see a lot of patent-worthy invention and many trade secrets which we do not patent because we do not want the competitors to know about those inventions. But innovation is quite evident in this business.

Speaker #4: The challenge is on the gestation period, which is very, very high for such novel inventions. But we continue to invest very heavily in R&D, and we continue to see a lot of patent-worthy inventions.

Speaker #4: And many trade secrets, which we don't patent because we don't want competitors to know about those inventions. But innovation is quite evident in this business.

Speaker #2: Sir, one last question. Even sun control films and paint protection films are now very much coming into the market. So, is there any plan to manufacture something like that?

B Surender: Sir, one last question. Sir, regarding sun control films and paint protection films, this is now very common in the market. Is UJA all trying to manufacture or something like that?

Speaker #4: So, we are looking at various products, and from time to time, we make those decisions. Right now, we don't have any news on this front for you.

Vaibhav Jha: So we are looking at various products, and from time to time we take those decisions. Right now we don't have any news on this front for you.

Speaker #2: Okay, thank you very much, sir.

B Surender: Okay. Thank you very much, sir.

Speaker #3: Thank you. Your next question comes from the line of Sakit Kapoor. Please go ahead.

Operator: Thank you. The next question comes from the line of Saket Kapoor. Please go ahead.

Speaker #2: Yeah. Yeah. Thank you. Thank you, sir, for the opportunity. Again, sir, as you were mentioning, the majority of the ARPEC is being consumed internally, that is, for captive use.

Saket Kapoor: Yeah, thank you. Thank you, sir, for the opportunity. I guess, as you were mentioning that major of the rPET is being consumed internally, that is the captive use. Sir, how are these being accretive to our margins? If you can give some color of how this consumption leads to, easily recyclable bit of story is there, but margin contribution from raw material rPET use?

Speaker #2: So, sir, how are these being attractive to our margins? If you can give some color on how this consumption leads to—first.

Speaker #2: Is the recyclable bit of the story there? But margin में कितना contribution आता है from raw material बाहर से नहीं लेके ARPEC use करने से?

Speaker #4: See, because we are making it in-house, we are able to capture the margins which we would have typically paid to an external supplier, right? So to that extent, the margin is credited internally.

Vaibhav Jha: See, because we are making in-house, we are able to capture the margins which we would have typically paid to an external supplier. To that extent, the margin is credited internally. It is also most of the times and majority of the times cheaper than the virgin raw material. That also gets approved.

Speaker #4: It is also, most of the time and majority of the time, cheaper than the virgin raw material. So that also gets approved.

Speaker #2: Okay, sir. What would be the arbitrage from purchasing your raw material or chips from outside and using the ARPEC internally?

Saket Kapoor: Sir, what is the arbitrage from purchasing your raw materials or chips from outside and using the rPET internally?

Speaker #4: Sir, we would like to avoid answering specific numbers.

Vaibhav Jha: Sir, we would like to avoid answering specific numbers.

Speaker #2: No issue, sir. Correct, sir. I got your point. Competition cannot be cheap. Sir, for this, sir—sir, for spreads, you mentioned that for our commodity film, we made 28 to 30 rupees for quarter one.

Saket Kapoor: No issue, sir. Correct, sir. I got your point. Competition. Sir, for-

Vaibhav Jha: Yes.

Saket Kapoor: Yes, sir. Sir, for spread, you mentioned that our commodity spread, we made INR 28 to INR 30 for Q1. So currently, what is the outlook on the spread, sir? Any color you can share?

Speaker #2: So, since currently—how are, what is the outlook on the spreads, sir? Any color you can share?

Speaker #4: Sir, so it is similar. It is holding and we are seeing resilience in this kind of VS in our commodity films.

Vaibhav Jha: Sir, so it is similar. It is holding and we are seeing resilience in this kind of VAs in our commodity spreads.

Speaker #2: Okay. And the utilization, I'll just add, okay? You allow me then again only for two—yeah, yeah—two more questions are there for us.

Saket Kapoor: Okay. And the utilization for-

Operator: Sorry to interrupt, Saket sir.

Saket Kapoor: May I just add. Okay. You allow me then again only for two.

Saket Kapoor: May I just add. Okay. You allow me then again only for two. Yeah. Two more questions are there.

Operator: Yeah.

Saket Kapoor: Two more questions are there.

Operator: I really apologize, Saket sir, but we would be able to take this.

Speaker #3: I really apologize, Sakit sir, but we won't be able to take this question due to time. That's correct.

Saket Kapoor: We are closing the call?

Operator: due to time constraint. That's correct.

Speaker #2: Sir, 8.

Saket Kapoor: Sir, one point.

Vaibhav Jha: Sir, let Saket ask.

Speaker #4: Sir, एक पूछ लेने दीजिए। पूछ लेने दीजिए, Sakit जी को। सर, दो पॉइंट देखने का था। एक था, आपका रेटिंग अपडेट कब अपडेट है?

Saket Kapoor: Yes, sir. Sir, two points to see. One was when your rating update is coming, what is the schedule? Singhania is doing some work on succession planning. It was seen that some transfer of shares had happened. So sir is not here, so any comment or you can take the feedback from him. What I was asking earlier was interrupted, that the current utilization levels which were of our last quarter, are we seeing some improvement in that in Q2? That was my question, which I was asking at that time.

Speaker #4: कब आ रहा है शेड्यूल है? और सक्सेशन प्लानिंग पर कुछ वर्क कर रहे हैं सिंगानिया जी? ऐसा दिखा था कुछ ट्रांसफर ऑफ शेयर्स हुए थे।

Speaker #4: तो सर, वह नहीं हैं यहां पर। तो कोई कमेंट्स हैं, और आप उनसे फीडबैक ले सकते हैं। और जो मैं पहले पूछ रहा था, वो इंटरप्ट हो गया था कि अभी यूटिलाइजेशन लेवल जो हमारे पिछले क्वार्टर के थे, उनसे क्वार्टर टू में कोई इंप्रूवमेंट हम देख रहे हैं या नहीं?

Speaker #4: That was my question, which I was asking at that time. Yes, sir. Quarter two, from a capacity utilization, is looking better than the previous quarter.

Vaibhav Jha: Yeah. Quarter 2 from a capacity utilization is looking better than the previous quarter.

Speaker #4: And yeah, from Q1. And you want to answer the second?

Saket Kapoor: From Q1.

Vaibhav Jha: Yeah, from Q1. You want to answer the

Speaker #2: Yes, Sakit ji. So, in terms of rating, the review is already in progress, and we expect that the rating review will be completed by the end of this month.

Sourabh Agarwal: Yeah. Saket, so in terms of rating, the review is already in progress, and we expect that the rating review will be completed by the end of this month.

Speaker #4: And coming to the succession and ownership, both are two different things. Both are different. We already manage professionally. And what he has transferred to his son is their internal family matter.

Vaibhav Jha: And coming to the succession and ownership, both are two different things. Both are two different things. We already managed professionally and what he has transferred to his son is their internal family matter.

Saket Kapoor: Okay. All right, sir. Thank you very much to all of you for answering all the questions. Thank you and all the best to the team, sir.

Speaker #3: अच्छा.

Speaker #2: ठीक है, सर। बहुत धन्यवाद आप सभी का, सर, सभी प्रश्नों के उत्तर के लिए। Thank you and all the best to the team, sir.

Speaker #4: थैंक यू.

Speaker #3: थैंक यू.

Operator: Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Vaibhav Jha for closing comments. Over to you, sir.

Speaker #1: Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Vaibhav Jha for closing comments.

Speaker #1: ओवर टू यू, सर.

Vaibhav Jha: I would like to thank all our stakeholders, partners, and team members for their continued support, and thank you all for participating in this call. We are pleased with the strong start to FY27, and we are quite optimistic that we will do well during the year and see even better performance during succeeding quarters. For further queries, please reach out to our IR partners at Adfactors. Thank you.

Speaker #4: I would like to thank all our stakeholders, partners, and team members for their continued support. And thank you all for participating in this call.

Speaker #4: We are pleased with the strong start to FY27, and we are quite optimistic that we will do well during the year and see even better performance during succeeding quarters. For further queries...

Speaker #4: Please reach out to our IR or partners at FACTOR. Thank you.

Speaker #2: थैंक यू. थैंक यू.

Saket Kapoor: Thank you.

Sourabh Agarwal: Thank you.

Speaker #3: थैंक यू ऑल द मेंबर्स ऑफ द मैनेजमेंट. ऑन बिहाफ ऑफ एस्टर इंडस्ट्रीज, दैट कंक्लूड्स दिस कॉन्फ्रेंस. थैंक यू एवरीवन फॉर जॉइनिंग अस एंड इवन आवर डिस्कनेक्टेड लाइन्स.

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

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Q1 2027 Ester Industries Ltd Earnings Call

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