GLEN Industries Q2 FY26 Earnings Analysis

- Growth driven primarily by new capacity expansion; existing capacity is already at optimal utilization (100% in food containers). - Incremental revenue expected mainly from new capacity: - Rs. 150-200 crores incremental revenue in FY 2026-27. - Rs. 300 crores incremental revenue in FY 2027-28. - Total company turnover expected to reach around Rs. 500 crores by FY 2027-28 (existing + new capacities). - Expansion focused on plastic food containers and paper products, with PLA stores and paper straw being seasonal and not capacity-expanded. - Growth also supported by shifting demand from China to India (China Plus One policy), fueling substitution and expansion. - Customer base expected to grow slightly; current demand from existing customers exceeds present capacity. - Export to domestic sales ratio to be maintained at about 35%-40% export. - Seasonality impacts plastic store and paper straw volumes; peak season in H2 (Feb-April and Sept-Oct). - Company expects working capital borrowing and total debt to increase proportionally with expansion.

- GLEN Industries expects strong growth driven by new capacity additions, particularly in Thin Wall Food Containers, paper cups, and plastic thermoforming products. - Incremental revenue from the new plant projected at Rs. 150-200 crores in FY '27 and Rs. 300 crores in FY '28; total turnover expected to reach Rs. 500 crores by FY '28. - EBITDA margins are anticipated to be between 18%-19%, slightly lower than the current 20%+ due to expansion into slightly lower-margin products. - PAT margins may fluctuate due to raw material price variations but are expected to sustain around current levels with EBITDA-centric focus. - Working capital and debt levels will increase to finance expansion, with institutional debt expected to be around Rs. 170 crores by FY '28. - Earnings growth driven by capacity-scale-up, product diversification, market shifts (China Plus One), and increased domestic demand.

- Ongoing capex of about Rs. 100 crores expected to complete by March 2026, with production start targeted from April 2026. - New facility shifted to Bagnan near existing plants for logistical advantages. - New capacity expected to generate incremental revenues of Rs. 150 crores in FY '27 and Rs. 300 crores in FY '28. - No immediate next leg of capex planned; company wants to stabilize current investments first. - Project funding: Rs. 47 crores raised via public issue, Rs. 2.5 crores already invested, Rs. 50 crores to be borrowed from banks. - Additional borrowing expected to meet working capital demands as business scales. - Interest rates on borrowings currently around 8%-8.2%, potentially lower with repo rate cuts and MSME subsidies. - Depreciation impact of new capacity expected to add around Rs. 7 crores annually, doubling current depreciation.

- GLEN Industries plans to raise Rs. 50 crore in debt from banks for the ongoing Rs. 100 crore CAPEX project. - The company has already raised Rs. 47 crore from a public issue (equity) for this CAPEX. - The remaining CAPEX funding includes Rs. 2.5 crore invested internally and Rs. 50 crore through bank borrowing. - Total institutional borrowing is expected to increase from around Rs. 70 crore (FY '26) to Rs. 170 crore by FY '28 due to expansion and working capital needs. - The company does not foresee immediate plans for additional CAPEX beyond the current project until the existing one stabilizes. - Adequate working capital finance is assured by banks, anticipating further rise in borrowings as the business grows. - There is no explicit mention of any future fresh equity fundraising beyond what has been done for the current CAPEX.

- For exports, GLEN Industries maintains a 3-month order book, currently around 1.5 to 1.6 million in value. - Existing capacity is running at optimum levels, so incremental revenue growth depends on new capacity coming online. - The company has not expanded its customer base in the last 3-4 years due to capacity constraints; new customers are expected after capacity expansion. - Many existing customers are waiting for increased supply due to lack of current capacity. - Order visibility for FY '27 and FY '28 is strong, with new capacity expected to contribute approximately Rs. 150 crores in FY '27 and Rs. 300 crores in FY '28. - The firm is focusing first on fulfilling demand from existing customers before aggressively acquiring new ones through increased international exhibition participation.