Ester Industries Ltd

- Ester Industries has secured a significant orderbook as part of the Elite project, including a 3-year contract with Nike for 5,000 tons of finished goods, which will increase to 10,000 tons pre-commercial production. - The Nike contract is a take-or-pay agreement, ensuring at least 40% payment even if quantities are not taken, indicating strong order assurance. - The company mentioned actively working on securing many other offtake agreements for the Elite project. - There is a positive outlook on business development pipeline reviving post tariff reductions, particularly in the specialty films segment in the U.S. market. - Overall, the orderbook and pending orders are expected to grow, helped by reduced US tariffs and expanding specialty product volumes.

- Ester Industries is actively working on raising debt for the Elite project (USD 193 million capex). - Debt syndication efforts are ongoing with the help of a debt syndication agency. - The company is confident of raising the required debt in the coming months to proceed with the Elite project. - The land acquisition for the Elite project is expected to complete by April-May 2026. - No significant new equity fundraising was mentioned; however, there is a warrant conversion due in mid-May 2026 with an exercise price of INR 158 for both promoters and non-promoters. - The company is still firming up capex plans for FY '27 and will provide updates in the March quarter call.

- Major ongoing capex includes the investment in a recycled polyester extruder at the Hyderabad facility, with a capex of around INR 40 crores (FY '26). - Maintenance capex and small technical enhancements at the Khatima plant continue but no significant new facility capex planned there currently. - The Elite project is a key marquee capex involving a total investment of USD 193 million, expected to be completed by end of 2027, with commercial production starting after that. - Land acquisition for Elite project expected to be completed by April-May 2026. - FEED study for the Elite project completed by Tata Consulting Engineers. - Detailed engineering for the Elite project is underway with Toyo Engineering, an internationally renowned EPC contractor. - Debt syndication efforts are ongoing to raise funding for the Elite project. - Capex plans for FY '27 are being finalized, with a detailed update expected in the March quarter.

- Business challenges in the film industry have subsided, with normalized U.S. tariffs and improved supply-demand balance, signaling improved financial results from next quarter onward. - Operating rates and capacity utilization are expected to improve gradually over the next 4-5 quarters due to sustained demand and internal production enhancements. - Indian BOPET film demand is projected to grow at 8-10% annually, with capacity additions generally in sync, supporting supply-demand balance for the next couple of years. - Specialty film volumes are expected to increase, especially in North America, as tariff-related headwinds ease, with aspirations to raise specialty sales share from 25% to around 50% in 3-5 years. - Specialty polymer business targets healthy double-digit growth continuously over the next 3-5 years. - Overall, the company expects consistent volume growth, improved profitability, and an upward sales/revenue trajectory into FY '27 and beyond.

- The company expects improved profitability from Q4 FY26 onwards due to subsiding business challenges and normalized U.S. tariffs impacting the film business. - Operating rates are anticipated to increase steadily over the next 4-5 quarters driven by sustained demand and internal production enhancements. - Volumes for films are expected to recover as export volumes to the U.S. rebound post-tariff normalization. - Specialty Polymers business is ramping up; capacity utilization is currently ~25-30%, with significant margin improvement potential, possibly outperforming film business margins. - Industry demand for BOPET films is forecasted to grow 8-10% annually, with capacity additions being in sync or marginally short of demand, leading to improved operating rates and margins. - Regulatory support (e.g., PWMR rules, antidumping duties) is expected to reduce imports and boost domestic sales and margins. - The company remains cautious in giving firm guidance due to economic volatility but is confident of sustainable volume and profit growth in FY27 and beyond.