HCP Plastene - HCP Plastene

📊 BSE: 526717 🏢 Packaging 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue declined by 17.55% in FY2024 to INR 288.97 Cr from INR 350.50 Cr in FY2023. However, 9M FY2025 showed a significant recovery with revenue reaching INR 343.95 Cr, a 57% YoY increase. Standalone operations for FY2025 reported revenue of INR 118.08 Cr compared to INR 45.55 Cr in FY2024, representing a 159% growth.

Geographic Revenue Split

Exports account for approximately 65% of total revenue, primarily targeting the European Union and United States markets. Domestic sales contribute the remaining 35%. The company is expanding its international footprint with a new subsidiary in Malaysia.

Profitability Margins

Net profit margin (PAT) was 0.10% in FY2024 (INR 0.30 Cr) compared to 0.22% in FY2023 (INR 0.77 Cr). For 9M FY2025, PAT margins improved significantly by 229 bps to 1.88% due to better realizations and demand recovery.

EBITDA Margin

EBITDA margin stood at 3.83% in FY2024 (INR 11.08 Cr), down from 4.68% in FY2023. In 9M FY2025, EBITDA margins improved to 7.29%, a 1.58% absolute increase YoY, with EBITDA doubling to INR 25.09 Cr.

Capital Expenditure

The company maintains a gross block of INR 107.49 Cr as of FY2025. While specific future capex figures are not disclosed, the company has invested in state-of-the-art infrastructure at Santej and Sanand to support its wide product portfolio.

Credit Rating & Borrowing

Assigned a credit rating of IVR BBB-/ Negative in March 2025 for INR 50.00 Cr long-term bank facilities. Interest coverage ratio was 0.94x in FY2024, expected to improve to ~3.00x over FY2025-FY2028. Total debt stood at INR 99.98 Cr as of March 31, 2024.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Polypropylene (PP) and HDPE, which are derivatives of crude oil. These materials constitute the bulk of the manufacturing cost for woven sacks and FIBC bags.

Import Sources

Raw materials are primarily sourced domestically from Gujarat, specifically from proximity to major refineries.

Key Suppliers

Reliance Industries Limited (RIL) is a primary supplier, with the company's plants located near RIL's refinery for efficient sourcing.

Capacity Expansion

Current manufacturing units are located in Santej, Sanand, Gandhidam, Ahmedabad, Rajpur, Kalol, and Kutch. Specific MTPA capacity is not disclosed, but the company is expanding its international exposure through a new Malaysian subsidiary.

Raw Material Costs

Raw material costs are highly susceptible to crude oil price fluctuations. In FY2024, total expenses (excluding finance/depreciation) were INR 104.54 Cr against revenue of INR 118.08 Cr in standalone operations, indicating high material intensity.

Manufacturing Efficiency

Efficiency is driven by locational advantages near Kandla and Mundra ports, which significantly reduces freight costs for the 65% export-oriented business.

Logistics & Distribution

Distribution is focused on export markets (EU/US) via Gujarat-based ports. Logistics costs are mitigated by the strategic location of plants near major maritime hubs.

📈 Strategic Growth

Expected Growth Rate

55%

Growth Strategy

Growth is targeted through a projected revenue of ~INR 450 Cr in FY2025, driven by new client additions, a new subsidiary in Malaysia to strengthen international exposure, and expansion into Japan and South Korean markets. The company is leveraging its 75% Indian market share in European FIBC imports.

Products & Services

FIBC Bags (Jumbo bags), small PP Woven Bags, AD Star Bags, PP fabric, film laminates, liners, BOPP laminated woven sacks, and multifilament yarns.

Brand Portfolio

HCP Plastene Bulkpack (formerly Gopala Polyplast), part of the Plastene Group/Champalal Group.

New Products/Services

Expansion into specialized AD Star bags and high-specification FIBC types (Type A, B, C, D) for flammable solvent and combustible substance handling.

Market Expansion

Targeting Japan and South Korea markets to drive growth beyond the traditional US and European strongholds.

Market Share & Ranking

India holds a 75% share in European FIBC imports and a 72% share in the US import market; HPBL is a major contributor to this national share.

Strategic Alliances

The company is a subsidiary of Plastene India Limited (Champalal Group), which acquired the business via an NCLT-approved resolution plan in 2019.

🌍 External Factors

Industry Trends

The global polypropylene woven sacks market is growing at 4.2% CAGR, expected to reach $6.1 billion by 2034. There is a shift toward PP woven sacks as an eco-friendly alternative to PE.

Competitive Landscape

Competes with other Indian and global FIBC manufacturers. Market dynamics are currently recovering from a sluggish FY2024.

Competitive Moat

Moat is built on a 40-year track record, state-of-the-art manufacturing in Gujarat, and a dominant 70%+ market share for Indian FIBCs in key Western markets. Sustainability is supported by the Plastene Group's common dealership and supplier network.

Macro Economic Sensitivity

Highly sensitive to global trade volumes and GDP growth in the US and EU. The global FIBC market is expected to grow at a CAGR of 5.4% to reach $12.6 billion by 2033.

Consumer Behavior

Increasing demand for bulk packaging (FIBC) due to cost-effectiveness, re-usability, and eco-friendly properties compared to traditional packaging.

Geopolitical Risks

Trade barriers or economic slowdowns in the EU and US pose significant risks given the 65% export concentration.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to stringent quality requirements of the EU and US markets. The company must adhere to manufacturing standards for food-grade and pharmaceutical-grade packaging.

Environmental Compliance

The company focuses on Polypropylene as a sustainable alternative to PE and produces eco-friendly FIBC bags to meet EU/US environmental standards.

Taxation Policy Impact

Total tax expenses for standalone operations in FY2025 were INR 1.87 Cr on a pre-tax profit of INR 7.62 Cr, implying an effective tax rate of ~24.6%.

Legal Contingencies

The company emerged from CIRP (Corporate Insolvency Resolution Process) in 2019 after a default by erstwhile promoters; the resolution plan was approved by NCLT Ahmedabad.

⚠️ Risk Analysis

Key Uncertainties

Unhedged forex exposure of INR 28.57 Cr poses a significant risk to the financial profile if the Rupee fluctuates against the USD/EUR. Crude oil price volatility remains a primary input cost risk.