GRP Ltd

- The order book for the Engineering Plastics (EP) business is described as robust. - There is confidence that the company should reach close to 100% utilization of EP capacity before the end of the current fiscal year. - In Polymer Composites, efforts are underway to develop a local customer base alongside the existing US partner. - The order book in Polymer Composites is in line with what was witnessed last year. - Overall, strong demand and capacity utilization improvement are expected in non-reclaim rubber businesses in FY23.

- GRP Limited has maintained a strong fiscal discipline and balance sheet strength, with low working capital borrowing compared to limits. - The company has been conservative with long-term loans due to inflationary trends. - A cash reserve has been built to enable future funding for growth opportunities. - There is no specific mention of any immediate or planned new fundraising through debt or equity in the transcript. - Liquid investments of around Rs. 15 crores are currently held, intended for funding future growth or CapEx. - Any future capacity expansion decisions, including capital allocation, will be made cautiously and likely towards the end of the fiscal year based on utilization trends.

- GRP Limited has undertaken capacity expansions in non-reclaim rubber businesses (engineering plastics and polymer composites), doubling capacities with about Rs. 15 crore invested, mainly funded through internal accruals. - The company aims to reach full utilization of expanded capacities by the end of FY22/23 and may consider further investments depending on utilization and raw material availability. - Future CapEx decisions, especially in the engineering plastics (EP) business, will be taken towards the end of the fiscal year based on utilization trends and scaling of reclaim rubber business simultaneously. - The company maintains strong fiscal discipline, low debt, and has built cash reserves to fund future growth opportunities. - GRP is engaged in the final stages of selling its stake in the tire retreading business with a transaction announcement expected by end of Q1 FY23. - Automation initiatives are underway to manage employee costs amid capacity expansions.

- GRP Limited expects strong demand growth in reclaim rubber driven by replacement tire market expansion and increased sustainability focus in the tire industry. - Current reclaim rubber capacity stands at 6,000 tonnes/month with revenue potential around Rs. 350 crore, with approximately 20% upside possible. - Non-reclaim rubber businesses (engineering plastics and polymer composites) have doubled capacity (~6,200 tonnes and 3,000 tonnes), with utilization around 40-45% end of FY22, expected to reach close to 100% during FY23. - The company plans capacity expansions in non-reclaim rubber businesses aligned with reclaim rubber growth, taking a balanced approach. - Revenue from non-reclaim sectors grew 67% in FY22; order books are robust. - GRP aims to capitalize on circularity and recycling trends to diversify offerings beyond tire industry, reducing dependency and enabling long-term growth.

- GRP aims for mid-teen ROCE for the overall company, with non-reclaim rubber businesses expected to contribute higher incremental ROCE as they scale. - EBITDA margins in reclaim rubber business are expected to improve, potentially reaching double digits, depending on product mix, currency, and trends in natural and synthetic rubber prices. - Capacity expansions in non-reclaim rubber segments (engineering plastics and polymer composites) doubled recently with utilization expected to approach 100% by end of FY23, supporting revenue growth. - Revenue from reclaim rubber currently at about Rs. 350 crore with a potential upside of ~20% through fuller utilization. - Continuous diversification into non-reclaim businesses is expected to drive margin expansion and reduce dependence on tire segment. - A more organized supply chain enabled by upcoming tire EPR (Extended Producer Responsibility) regulations is anticipated to enhance efficiency and margins long-term. - Currency tailwinds (USD appreciation) expected to positively affect margins in near term.