💰 Financial Performance

Revenue Growth by Segment

The company operates in a single business segment: Plastic Films. Total operating income grew by 11.4% YoY, reaching INR 126.58 Cr in FY 2025 compared to INR 113.63 Cr in FY 2024. This growth was driven by a 7% CAGR over the last three fiscals, supported by steady order flows and volume growth.

Geographic Revenue Split

The company services both domestic and export markets from India. While specific regional percentages are not disclosed, the company exports to both developing and developed countries, though exports are significantly lower than its imports.

Profitability Margins

Net Profit Margin declined from 8.07% in FY 2024 to 6.53% in FY 2025. Operating margins have historically been volatile, ranging from 1.3% to 11.9% over the last three fiscals due to raw material price fluctuations, settling at approximately 9.8% in FY 2025.

EBITDA Margin

Operating Profit Margin was reported at 9.8% in FY 2025. Core profitability was impacted by a 21% decline in the operating profit margin ratio (from 0.09 to 0.07 according to MDA indicators) due to the lag in passing on raw material cost increases.

Capital Expenditure

The company undertook a major expansion in FY 2025, increasing blown film capacity by 37% (from 4200 MT to 5760 MT) and coating facility capacity by 70% (from 2400 MT to 4080 MT). The expansion was completed in Q3 FY 2025.

Credit Rating & Borrowing

Long-term rating is Crisil BBB-/Watch Developing and short-term rating is Crisil A3/Watch Developing. Borrowing costs are low as the company has a debt-equity ratio of 0.00 following full repayment of loans in FY 2025. Interest coverage remains robust at 36.97 times.

⚙️ Operational Drivers

Raw Materials

Polymer resin (a crude oil derivative) is the primary raw material, representing the bulk of the cost of goods sold. Specific cost percentages per resin type are not disclosed.

Import Sources

Raw materials are primarily imported from the United States, the Middle East, and Europe.

Capacity Expansion

Current installed capacity as of late FY 2025 is 5,760 MT for Blown Film (up from 4,200 MT) and 4,080 MT for Coating (up from 2,400 MT). Benefits from this expansion are expected to materialize in FY 2026.

Raw Material Costs

Raw material costs are highly volatile as they are linked to crude oil prices. The company manages this through a procurement strategy involving widened sourcing bases and well-planned inventory, though price increases are passed to customers with a lag.

Manufacturing Efficiency

The company utilizes state-of-the-art integrated manufacturing. Capacity utilization metrics are not explicitly stated, but the recent 37-70% capacity hike suggests a focus on scaling efficiency.

📈 Strategic Growth

Expected Growth Rate

7%

Growth Strategy

Growth will be achieved by leveraging the 37% increase in blown film capacity and 70% increase in coating capacity added in Q3 FY 2025. The company is shifting focus from low-margin lamination films to high-margin specialty films, adhesive films, and surface protection films for the construction and durable goods industries.

Products & Services

Multilayer extrusion films, PE-based specialty films, adhesive films, surface protection films, and films for Aluminum Composite Panels (ACP).

Brand Portfolio

Ecoplast

New Products/Services

The company has introduced several variants of multilayer co-extruded films for both packaging and non-packaging applications to provide customized solutions.

Market Expansion

The company is targeting growth in industrial applications and exports to both developing and developed countries, supported by the recent capacity expansion.

🌍 External Factors

Industry Trends

The Indian plastic industry is evolving with increased demand for surface protection films that can withstand manufacturing stresses like bending and cutting. The industry is highly fragmented with intense competition from unorganized regional players.

Competitive Landscape

The industry is highly fragmented with several unorganized players catering to regional demand, which restricts aggressive geographic expansion and pricing.

Competitive Moat

The company's moat is built on 40+ years of market presence, specialized designing capabilities for customized solutions, and a shift toward high-entry-barrier specialty films.

Macro Economic Sensitivity

Global growth is projected at 3.3% for 2025. The company is sensitive to Indian infrastructure and realty sector revival, which drives demand for industrial films.

Consumer Behavior

Increasing industrial preference for surface protection films during manufacturing processes is driving demand for specialty variants.

Geopolitical Risks

Heightened policy uncertainty and global growth headwinds pose risks to the supply chain and international polymer pricing.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to standard manufacturing and pollution norms; the company is currently undergoing the regulatory process for the closure/winding up of its subsidiary, SFPL.

⚠️ Risk Analysis

Key Uncertainties

Volatility in crude oil prices (raw material link) and the ability to sustain operating margins above 9% are the primary uncertainties.

Geographic Concentration Risk

Manufacturing is concentrated in India, with a significant portion of raw materials sourced from the US, Middle East, and Europe.

Third Party Dependencies

High dependency on international polymer suppliers; however, the company is widening its sourcing base to mitigate this.

Technology Obsolescence Risk

The company mitigates technology risk through state-of-the-art integrated manufacturing and continuous innovation in multilayer film variants.

Credit & Counterparty Risk

Receivables management is stable with a Debtors Turnover Ratio of 9.50; the current ratio is healthy at 5.34, indicating strong liquidity.