Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>Earlier this month, RPPL announced a new factory to expand its thermoforming and extrusion capacity by 1250 MTPA and 1600 MTPA, respectively. This will come on-stream within a month.</li>
<li>RPPL reported a weak Q3FY25 due to adverse fluctuation in raw material prices as well as seasonal impact. Q3 tends to be a weak quarter seasonally.</li>
<li>RPPL's capacity expansion has been leading to upfront expenses. The new Olive Ecopak JV also reported losses, share of which was INR -2.6cr in Q3FY25.</li>
</ul>


Earlier this month, RPPL announced a new factory to expand its thermoforming and extrusion capacity by 1250 MTPA and 1600 MTPA, respectively. This will come on-stream within a month.
RPPL reported a weak Q3FY25 due to adverse fluctuation in raw material prices as well as seasonal impact. Q3 tends to be a weak quarter seasonally.
RPPL's capacity expansion has been leading to upfront expenses. The new Olive Ecopak JV also reported losses, share of which was INR -2.6cr in Q3FY25.


RPPL: Weak Q3FY25, However Medium-Term Outlook Is Strong

<ul>
<li>Q2FY25 performance was strong led by volume growth and margin improvement. Q2FY25 revenue grew 31% YoY and 12%+ QoQ. Volumes grew 24.6% YoY (9.5% QoQ) led by strong demand environment.</li>
<li>Margins have now normalized as raw material prices have stabilized. EBITDA margin improved to 14.9% vs 14.7% QoQ and 13.5% YoY. PAT margin grew to 5.8% vs 3.2% YoY.</li>
<li>RPPL's value-added segments like barrier packaging and injection molding are growing rapidly. Exports are also steady at INR 10cr+ per quarter and have a strong order pipeline.</li>
</ul>


Q2FY25 performance was strong led by volume growth and margin improvement. Q2FY25 revenue grew 31% YoY and 12%+ QoQ. Volumes grew 24.6% YoY (9.5% QoQ) led by strong demand environment.
Margins have now normalized as raw material prices have stabilized. EBITDA margin improved to 14.9% vs 14.7% QoQ and 13.5% YoY. PAT margin grew to 5.8% vs 3.2% YoY.
RPPL's value-added segments like barrier packaging and injection molding are growing rapidly. Exports are also steady at INR 10cr+ per quarter and have a strong order pipeline.


RPPL: Strong Q2 Led by Volume Growth and Margin Normalization

<ul>
<li>RPPL reported a strong Q1FY25 led by margin improvement. EBITDA margin rose to 14.7% vs 13.5% QoQ and 12.0% YoY. Stability in raw material pricing and operating efficiencies helped margins. </li>
<li>While growth in overall revenues was average at 8.3% YoY, growth in high-margin packaging products segment, which contributes 80% of total revenues, was strong at 16% YoY. </li>
<li>Exports at INR 9.2cr were below the INR 10cr+ run-rate, however, the growth momentum is intact. RPPL is in process of finalizing an export contract with a major global distributor.</li>
</ul>


RPPL reported a strong Q1FY25 led by margin improvement. EBITDA margin rose to 14.7% vs 13.5% QoQ and 12.0% YoY. Stability in raw material pricing and operating efficiencies helped margins. 
While growth in overall revenues was average at 8.3% YoY, growth in high-margin packaging products segment, which contributes 80% of total revenues, was strong at 16% YoY. 
Exports at INR 9.2cr were below the INR 10cr+ run-rate, however, the growth momentum is intact. RPPL is in process of finalizing an export contract with a major global distributor.


RPPL: Scaling Up Well With Consistent Execution

<ul>
<li>RPPL executed well in FY24 with sales volume growth at 18% YoY. However, sudden and significant contraction in raw material prices dampened FY24 sales value growth to just 9% YoY.</li>
<li>Exports sustained its quarterly run-rate of INR 10cr+ in Q4FY24, resulting in FY24 aggregate exports sales at INR 42cr. Exports contributed 15% of revenues in FY24 vs 5% in FY23.</li>
<li>RPPL is also making good progress with its new initiatives. Its Olive Ecopak venture began commercial production in Mar 2024. Its injection molding segment is also scaling up well.</li>
</ul>


RPPL executed well in FY24 with sales volume growth at 18% YoY. However, sudden and significant contraction in raw material prices dampened FY24 sales value growth to just 9% YoY.
Exports sustained its quarterly run-rate of INR 10cr+ in Q4FY24, resulting in FY24 aggregate exports sales at INR 42cr. Exports contributed 15% of revenues in FY24 vs 5% in FY23.
RPPL is also making good progress with its new initiatives. Its Olive Ecopak venture began commercial production in Mar 2024. Its injection molding segment is also scaling up well.


Rajshree Polypack (RPPL): All Set for a Strong FY25

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rajshree-polypack-ltd" target="_blank" data-smartkarma-citation="entities:33486:1" rel="noopener">Rajshree Polypack ("RPPL")</a> reported a robust Q3FY24 led by strong volume growth of 29%+ YoY. EBITDA margin also expanded leading to EBITDA growth of 35%+ YoY.</li>
<li>Export business continues to grow steadily with quarterly run-rate now at INR 10cr. This suggests that on an annualized basis, exports could be INR 40cr vs INR 30cr guided earlier.</li>
<li>Injection molding business is doing well and has reached optimum capacity utilization. RPPL is exploring to expand this capacity and is also expecting it to become profitable from next quarter.</li>
</ul>



Rajshree Polypack ("RPPL") reported a robust Q3FY24 led by strong volume growth of 29%+ YoY. EBITDA margin also expanded leading to EBITDA growth of 35%+ YoY.
Export business continues to grow steadily with quarterly run-rate now at INR 10cr. This suggests that on an annualized basis, exports could be INR 40cr vs INR 30cr guided earlier.
Injection molding business is doing well and has reached optimum capacity utilization. RPPL is exploring to expand this capacity and is also expecting it to become profitable from next quarter.


India

Rajshree Polypack Limited manufactures packaging products. The Company offers coffee cups, trays, lids, plates, bowls, and other containers, as well as plastics rigid sheet. Rajshree Polypack serves dairy, beverages, retail, pharmaceuticals, and electronics industries in India.

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Rajshree Polypack (RAJPPL IN)

RPPL: Weak Q3FY25, However Medium-Term Outlook Is Strong

RPPL reported a weak Q3FY25 due to seasonality and volatility in raw material prices. It has been also in investing mode, which has upfronted...

Ankit Agrawal, CFA

RPPL: Strong Q2 Led by Volume Growth and Margin Normalization

RPPL reported a strong Q2 led by robust volume growth. Margins have normalized with stable raw material prices. Value-added segments - barrier...

Ankit Agrawal, CFA

RPPL: Scaling Up Well With Consistent Execution

RPPL is consistently scaling up its capacities while also introducing new value-added products and technology. It is executing well to sustain its...

Ankit Agrawal, CFA

Rajshree Polypack (RPPL): All Set for a Strong FY25

RPPL is poised for high growth over the next three years led by its various new initiatives across value-added products, new product categories and...

Ankit Agrawal, CFA

RPPL: On Track for a Strong FY25

RPPL's new products and focus on exports is setting it up well for robust growth over FY25 and FY26. At the current valuation, an investment in...

Ankit Agrawal, CFA

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