Platinum Industries (NSE:PLATIND) Q1 2027 Earnings Call

0:03 Ladies and gentlemen, on behalf of Captify Consulting Investor Relations team, I welcome you all to the Q1 FY27 post earnings conference call of Platinum Industries Limited. Today on the call from the management we have with us Mr. Krishna Rana, Chairman and Managing Director and Mr. Ashok Bhotra, Chief Financial Officer. As a disclaimer, would like to inform all of you that this call may contain forward looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being recorded. I would now request the management to brief us about the business highlights for the period ended June 2026, the growth perspective and vision for the coming year, post which we will open the floor for Q and A. Over to the management team.

0:50 Thank you, Vinay. Good afternoon, everyone, and thank you for joining us today for Platinum Industries Limited's post earnings conference call for the first quarter financial year twenty seven. I am Krishna Dushyant Rana, Chairman and Managing Director of Platinum Industries, and I am joined by our Chief Financial Officer, Mr. Ashok Bhotra. Let me begin by thanking all our employees, customers, business past... Partners, and stakeholders and shareholders for their continued trust and support. At Platinum Industries, we remain focused on building a strong and differentiated position in the PVC and CPC additive industry with a clear emphasis on higher value products, capacity expansion, product innovation, and increasing our presence across both domestic and international markets.

1:38 The first quarter of FY twenty twenty seven was a period of transition and capacity ramp up for the company. On a consolidated basis, revenue from the operations stood at approximately INR108.9 crores compared with INR115.4 crores in Q1 FY twenty twenty six. Profit before tax stood at approximately INR15 crores, while profit after tax was INR11.1 crore. While the consolidated top line was impacted by the ongoing transition and the ramp up phase, we remain encouraged by the underlying business opportunities and importantly by the progress made on our capacity expansion initiatives. The focus during the quarter was on strengthening our manufacturing platform, improving our product mix and preparing the company for the next phase of growth.

2:26 A key milestone for us has been the commissioning of our expanded Palgar facility. Partial commercial operations of the CPVC facility that was 12,000 tons per annum commenced in August 2025, while the remaining capacity of 48,000 tons per annum of PVC, CPVC lubricants, other facility commence... Commenced commercial production effective from 05/21/2026. The expanded facility adds approximately 60,000 tons per annum of capacity comprising 24,000 tons of lead free in PVC, 24,000 tons of CPVC, and 12,000 tons of lubricants and others. With the full ramp up of this facility, our total capacity in India is expected to scale towards 85,000 tons plus per annum. This includes storage capacity of 6,000 tons per annum, which is likely to commence commercial production in September, October 2026. This expansion is strategically important because it strengthens our presence in premium non lead additives and CPVC additives.

3:34 While also providing us with greater operating leverage, we expect the benefits of this capacity to become increasingly visible as utilization ramps up over the coming quarters. Another significant milestone is the progress of our manufacturing facility in Egypt. We remain committed to commence commercial production before 12/31/2026. The facility involves a total investment of approximately 68 crores and will have a production capacity of 60,000 tonnes per annum. Egypt is a strategically important project for Platinum Industries. Its location provides us access to attractive international markets, including duty free access to The United States through qualified industrial zones and free trade access to key South American markets. This will enable us to establish a cost competitive manufacturing and export platform closer to important global polymer additives market. We believe the Egypt facility can significantly strengthen our international footprint and improve our product and geographic mix. More importantly, it is expected to become a meaningful growth and margin driver as we move into, FY twenty eight.

4:40 Our strategy continues to be focused on increasing the contribution from value added products, particularly lead free and specialty stabilizers and CPVC related products. The shift towards lead free solutions is supported by increasing customer preference for more sustainable products while CPVC continues to offer an attractive opportunity in the pipes and fitting segment. With the expanded Palgar capacity and the upcoming Egypt facility, we will be better positioned to address both domestic demand and international opportunities. We are also continuing to work towards new product introductions like the oleo chemicals derivatives and, specialty chemicals, which has commenced the sales, in Platinum Oleo Chemicals Private Limited.

5:29 Looking ahead, we remain confident about the long term growth opportunity for Platinum Industries. FY twenty seven is an important year for us because we are moving from a phase of capacity creation towards a phase of capacity utilization and operational scaling. Our key priorities for the year are ramp up of expanded Palgar facility, completion and commissioning of the Egypt facility, increasing utilization of our new capacities, improving the contribution of higher value and lead free products, expanding our domestic and export customer base, and maintaining strong focus on operating efficiencies and financial discipline. We believe these initiatives will create a stronger and more diversified business platform and position the company well for sustainable growth over the medium to long term.

6:16 We continue to remain focused on our previously articulated growth ambitions while ensuring that growth is supported by capacity utilization, product mix improvement and disciplined capital allocation. To conclude, Q1 FY twenty twenty seven should be reviewed in a context of the significant capacity expansion undertaken by the company. The underlying opportunity remains strong. We have added substantial capacity in India, are progressing towards commissioning our Egypt facility, and continue to strengthen our portfolio of premium value value added products. Our objective is clear to build Platinum Industries into a larger, more diversified, and globally competitive specialty chemicals platform while creating sustainable long term value for all our stakeholders.

7:02 With that, I would like to hand over the call to our CFO, mister Ashok Bhotra, who will take you through the financial performance in great detail. Thank you very much. Thank you. Thank you, sir. Good afternoon, everyone. I will briefly take you through our financial performance for q one FY twenty seven. On consolidated basis, revenue from operations stood at 108.9 crores compared with 115.4 crores in q one FY twenty six. EBITDA stood at 13.44 crore with an EBITDA margin of 12.34% compared with 15.16 crore and 13.14 percentage respectively in q one FY twenty six. Profit before tax stood at 14.95 crores compared with 17.82 crores in q one FY twenty six, while PAT stood at 11.13 crore compared with 13.07 crores in the corresponding quarter.

7:58 Basic and diluted EPS stood at 2.03 per share. The moderation in profitability reflects the ongoing transition and ramp up of our expanded manufacturing facility and due to less of type of high product... High margin product that is lead free PVC. We expect operating leverage to improve as utilization increases. On stand alone basis, revenue from operations stood at 110.4 crores compared with 102.9 crore in q one FY twenty six, registering a growth around 7.3%. EBITDA stood at 12.85 crore compared with 13.72 crore in q one FY twenty six, while EBITDA margins stood at 39.64% compared with 13.33% in the corresponding quarter.

8:46 Profit before tax stood at 13.2 crores compared with 16.88 crores in q one FY twenty six, while PED stood at 9.58 crore compared with 12.52 crores. Basic and diluted EPS stood at 1.74. The stand alone performance reflects the ongoing capacity transition in in... An investment in our manufacturing platform with the focus now on improving utilization, product mix, and operating efficiency. From the cost perspective on consolidated basis, raw material consumption was 78.1 crore while employee cost stood at 6.9 crore. Depreciation increased to 1.8 crore reflecting the expanded asset base while the finance cost were at 0.5 CR.

9:37 On capital allocation, we continued to invest in Spalgar expansion and Egypt facility. During q one, approximately 15 crore of IPO proceed were utilized, taking cumulative utilization to approximately $1.65.9 crore. The balance and utilize... And utilize IPO proceed stood at $40.45.9 crores as of 06/30/2026. Overall, q one was a quarter of transition, capacity ramp up with the expanded Palgar facility now open and the Egypt facility progressing toward commercial production by December 26. Our focus will be on improving capital... Capacity utilization, enhancing product mix, and driving operating leverage. We remain committed to disciplined cost management, efficient working capital management, and prudent capital allocation as we scale the business.

10:31 Thank you. We are now happy to take your questions. Thank you, sir. We'll now begin the question and answer session. All those who wish to ask a question, please use the option of raise hand, and we'll invite you to ask a question. You can also put your question in the q and a box. We'll take the first question from Arnaud Sakuja. Please go ahead. Hi. Thank you for taking my question. So my first question is that, could you give us a bit of an outlook as to how the pipes demand was in the month of, July and August? Hi. This is, Krishna here. Hi.

11:18 The pipe demand has been, you know, under basically a degrowth, in the last quarter. If you see the results of all the pipe companies, you must have seen that they have done a degrowth in the, you know, in the revenue in terms of manufacturing. So the demand has just picked up from August, and we see that, you know, from August until December, there's gonna be a good demand for pipe sector because right now, the PVC prices have been stabilized. It started going upwards. So now even the farmers and the retailers have started purchasing the goods. So we are seeing an upward demand from here now. Got it. And in terms of your audio segment, what were the sales from this segment in quarter one f y twenty seven? So q one, we have started, I think, around five point, you know, 5.3 or five five point five? 5.3 CR is the, revenue that we've got in audio in the first quarter. And we'll be able to reach, $55.60 crores by the end of the year in this segment? Yes. We are we are, very positive on that.

12:22 Okay. Got it. And, in the CPVC segment, what happened, the margins? So I think, in the past, we've mentioned that, you know, as the capacities ramp up, you know, it's possible... As the utilization ramps up, sorry, you know, we have a potential of reaching 20 to 22% margin in this segment. So, you know, when do you think these kind of margins would be visible? So right now, the demand supply gap is there. The demand is less, and, you know, the supply is more. So because of that, there has been a a push strategy for, you know, the last quarter. What we see the demand that is coming up right now, we will be able to only, you know, work on the margins probably post, you know, in third or the fourth quarter.

13:11 So right now, we are still on 18%, and we wish to reach by, you know, when the supply... Right now, what is happening? The raw material supplies are also getting disturbed due to the shipments. So that is impacting that, you know, we have to buy certain raw materials in the, you know, current scenario from the local market and, you know, not importing the raw materials. That is impacting the margins. So right now, we are on 18%. We wish to be on 20, 21% by the fourth quarter. Got it. Thanks a lot for answering my questions. Thank you. Thank you. We'll take the next question from. Please go ahead. Yeah. Hi. Am I audible? Yes. I wanted to know that the revenue growth appears strong, but can you break down growth into volume growth, price mix change?

14:02 And are there any new customer additions? And what was the underlying volume growth in stabilizers versus specialty products? Oh, generally, we did... Don't share, you know, volume data with the... On open platform. So we can discuss this point, you know, of whenever you you you you can call us regarding other... Carrie, can you please repeat again? Okay. Also, wanted to know about the EBITDA margins have improved despite raw material volatility. How much of the margin improvement is structured, and how much is temporary?

14:49 So if you see see our agenda, then there is a drastic reduction in the other other expenses due to the... In this quarter, we did not participate in any of the acquisition. So there is... And then there is a ECL reversal on account with debtors. So that is accounting entry. So because of that, there is a negligible impact on the EBITDA margins despite lower sale and margin... Drop in the margins. Well, also, I wanted to know what was the utilization level of existing stabilizer capacity during this quarter, and what utilization threshold is required to sustain current EBITDA margins? So we we set up...

15:37 Our plant was fully operational on 05/21/2126. So for part of the period, we got the capacity. So, generally, it is around, say, as of now, around 30 to 35% we are expecting in q two, q three. And, also, I wanted to know, were there any one off items in other incomes, inventory valuation, foreign gain or losses Oh. Affected in q one profit... Profitability? Yeah. So one... There is a ForEx gain around one c... One CR in... Which is getting reflected in other income. Okay. Thank you.

16:25 Thank you. We'll take the next question from Bhargo Butadi. Please go ahead. Yeah. Hi. Good afternoon to the team. So if you look at your presentation, you've given the guidance of 40% revenue growth in FY twenty seven. Do you still continue to maintain that guidance? We are definitely, you know, waiting to maintain the 40% growth guidance, and we are already on the track of that. But, unfortunate, you know, situation due to this war and everything, the demand was, you know, a bit on the downside. But, yes, we will be maintaining... There is growth already. So we will be maintaining, you know, 30 to 40% of growth this year. Secondly, I mean, if we take a two, two, three year, the kind of horizon, where do you see this audio chemical business shaping up in terms of revenues?

17:23 So from the first year, that is, you know, the current financial year, '27, we have... We are expecting somewhere around 65 to 70 CR of revenue from Oleo. If we see a three year horizon, we are targeting somewhere around 150 to 200 crores of revenue from Oulio itself. And lastly, in your guidance, are you factoring in revenue from your... The Egypt facility for FY '27? Yes. Partly. Yes. Partly. Yes. That is, I think, the last three months. Yes. The last quarter. So initially, we estimated around 50 to 60 growth from Egypt. Now we are targeting around 30 to 35. Great. Thank you. Thank you so much, and all the very best.

18:11 Thank you. Sir, we'll take a question from the q and a box. It's from Krish Desai. He's asking, Lubrizol is increasing investment in India along along with Grasim Industries for CPVC. How healthy it is for platinum? So in CPVC, if you see how a CPVC pipe is manufactured earlier when Lubrizol was manufacturing CPVC compounds, okay, the customers were buying a CPVC compound and directly using it in their production to extrude a CPVC pipe. The capacity, you know, expansion that they have done in collaboration with other group is to manufacture CPUC resin. Now in a compound, if you calculate 75% is the weightage of CPUC resin in the formulation and 25% are the additives. So we are on the side of the additives part, and Lubrizol is gonna be side of their CPC resin part. So over here now, the dynamics of consumers using a compound directly is gonna transform to consumer using CPC resin separately and an additive separately. So we are playing that additive part role. So there is no threat as such. In fact, we're gonna complement each other in terms of the growth. So we're very happy that, you know, the resin capacities have been built in India by companies like, you know, Lubrizol.

19:32 Reliance is also gonna come up with the capacity of CPC resin. There is Make Money Organics. So all these capacities building up is giving us an edge to, you know, supply additives to the pipe manufacturers. There is still a resistance, right, you know, because the technology is new, the product is new, the people are still understanding. It has been one one and a half... Two years of supply from our side to companies like Supreme, Prince Pipes. So, you know, this transition is gonna take some time. Until the time the capacities are gonna get, built up in India, we will have a good chance to have a growth in the CPVC additives, side of the story for our company. Thank you, sir. We'll take the next question from Bhagwat Nayak. Please go ahead. Thank you for the opportunity.

20:19 So how are you seeing the competitive intensity going forward? Are you seeing any pricing pressure from competitors? Or, like, what gives us confidence that Platinum can improve its market share? If you compare the current scenario versus a regular, you know, standard business scenario, there is a difference because right now, the shipping lines are, you know, charging very high, you know, freight cost and everything. So today, the scenario is completely different as compared to a normal scenario. What do I mean that, you know, in a normal scenario, companies like ours, you know, in, say, for example, when we are supplying our additives to the customers, okay, we are there only in three to 5% of the dosage in PVC and around 25% in CPVC. So whatever price changes or there are raw material changes that are happening or, you know, if it's going up, we are able to pass this on to the customer. But in scenario, like, where, you know, the worst scenario, the the shipments are not coming on time, in this case, we are unable to pass on, like, you know, the sudden freight cost, right, the sudden CFS charges or sudden any transportation cost, we are unable to pass it on to the customers.

21:24 So there, we have to take a little bit of it in terms of doing the business. Okay. But in terms of your question. Yeah. Mostly, particularly if you see competitive intensity. So how platinum is positioned based on that in terms of, like... If you can mention about the key competitors for platinums, Andal? So in India, like, when I talk about c... Say, for example, CPUC additives, okay, there is no competition in CPUC additives because it's a it's a new technology. There is one more Indian company which is already doing this, you know, work in India, but the demand in CPVC, we are seeing that will transform and it will turn out to being a market share or capacity enhancement in the next one or two years.

22:15 But, you know, when you talk about PVC additives, like, for example, lead lead free additives, in lead free additives, we have we have, you know, command in terms of having a good market share. So over here, there are only three major manufacturers we consider as a part of competition. That is Barlocar, which is a German company who has a plant in India, and one is reagents who who has set who has set up a plant in India. There is another company called Goldstep, but they are majorly into lead. So, you know, probably, the competition is not too much in terms of the the pricing. Over here, the competition in... Everybody has their own pockets. Like, for example, if there is Supreme Industries, okay, they have four suppliers in their in their purchasing. They have three suppliers in their purchasing. So the pricing, we are able to fetch from the customers without too much of compromise.

23:07 So even the competition understands the same pricing levels, even we understand the same pricing levels. Okay. Thank you for that answer. And just last question from my end. I would like to understand about the margins. If you talk about how do we see margin evolving going forward as we ramp up our fast plant capacity utilization. And in terms of income considering that, so if you see the financial year '23 and '24, the margins were pretty high as around 23%. So how do you compare with that? If you could just give some comment on that. So in 2324, our major sales... Okay. Our revenue was also very less, and our major sales was of lead free additives. Okay?

23:52 And in lead free additives, the margins were comparably high. What increase was we started... We added a product like CPC additives. Okay? And in CPC additives, we are still learning the technology, the product mix, the raw material, availability. And, we started with a very, very lower, contribution margin of three to 5% to 7% just to start the business. And that is what has... You know, the product mix has changed the, the, you know, dynamics of that. But if you remove, say, for example, CPVC, okay, from our current, you will see that the margins and the contribution margins in our calcium zinc or lead free additives business is maintained. Okay. And how do you see the margin going forward? We will be, you know, maintaining a, you know, a bad margin of 11, 12% in the coming months. Oh, in in our previous calls, we have maintained...

24:45 We have mentioned that, you know, we will expect a margin... EBITDA margin around 13 to 15% going forward. So EBITDA 13 to 15 percentage and CAT 11 to 12% is what you are referring to? Yes. Yes. Thank you so much for the answer. Thank you. We'll take the next question from Rakesh Sharma. Please go ahead. Thank you for the opportunity. So as the presentation highlights ongoing capacity expansion, can you please share the project wise CapEx, current completion status, expected commission, timeline, and the revenue potential from each new facility? Egypt, we are expecting that the plant will be available for us by December.

25:36 Okay. So over a period of three years, so we are expecting a top line around two fifty CR... Two, 300 CR from Egypt operations. And regarding Palgar, we are just commissioned, in the month of May. So peak potential will be very high, but, again, around 7 to 800 crore, we are expecting from the new facility in Palgar over a period of three years. My second question is what are the key bottlenecks that could delay, commissioning equipment delivery, utility approvals, environmental clearance, or customer qualifications. So we don't expect, you know, much delay on account of this. Okay. So once the new capabilities are commissioned, what is the expected asset turnover ratio and EBITDA margin profile of the expected businesses?

26:33 Over a period business. Over a period of three. We have already given the guidance that, you know, we... CAGR will be around 35% over a period of three years with common split profit. So what percentage Oh, it will be very forward looking statement, but with the so CAGR, we can say in top line, it will be around 35% or a few to three years. Thank you. We'll take the next question from. Please go ahead. Hello, sir? Yes. Good after... I have two... One questions.

27:18 Both are connected. So, basically, in the plant visit, we have seen that metallic source plant, which is going to be commenced in the August. So I want to ask the status of that, whether it has been commenced. And the revenue guidance which you've given for the f five twenty seven, which is 30 to 35%, has already affected this metallic soap plant, which is going to be commenced in August. Oh, MD had just mentioned in his speech that, you know, the plant will be re... Will be ready by September, October. So initially, we took August, but now we are expecting this because there was some delay in one of the equipment. And we affected the sale from steroids also for this CAGR growth. Okay. Thank you, sir.

28:08 Thank you. All those who wish to ask a question, please use the option of raise hand. We'll take the next question, the follow-up question from Surgi Mishra. Please go ahead. Yes. I want... Can you throw some light on the status of pharma business of Rebado Life Sciences where we are, and how much were we able to do in this quarter? And And what what do... What can we expect in the next two, three years? So, Revaru, life sciences, we are still identifying the business model that, you know, how we're gonna run. So we are still... I think from this quarter, we are seeing some revenue. The product and... You know, the product, we are still identifying that how we're gonna start this because we are doing some collaborations with some companies outside India for a innovative product and how we're gonna place that in India. So we are still under negotiations.

29:04 And so can you also tell me about oleochemicals, and what's the plan for it in the next two, three years? So for oleochemicals and oleo based derivatives, we already started our revenue. We started the seed marketing, you know, in in India. We're... Rather, we were also exported to two countries, one to Malaysia and one to Turkey. The idea is to, you know, do a seed marketing year and to get into manufacturing of these products. So I think in one and a half years' time from now, we wish to get into manufacturing of these products. We already have a land where we're start constructing and build to manufacture these product... Products. And how quickly can we how quickly can we pass the raw material inflation through customers since we have seen it affecting your gross margins and EBITDA margins in q one? And is there any contractual pass through mechanism with large customers?

30:06 No. Your question is not clear. I'm asking how can the raw material inflation be passed through customers since we have seen it affecting your gross margins and EBITDA margins in q one? And is there any contractual pass through mechanism with large customers? The gross margin margin that has been impacted, you know, is not because of the, you you know, know, the product. It's it's not because of... Say, for example, if you see our 2324 revenue, this is what I explained in my earlier thing also that we had a revenue of only lead free stabilizers. Then we added some products. So any new product has its own life cycle. Right? And, you know, first, we started with a very lower margin to penetrate the market, and then we understood that, you know, these are the raw materials that we can replace with a higher... To fetch the higher margin. So this is how we played around with the raw materials. And now we've reached from a six, 7% to a 17, 18% of gross margins in our CPC products. So for example, if there's any change in terms of raw material pricing going high, we are able to pass it on to the customers.

31:12 But, you know, in the scenario, like, you know, this war scenario and the shipments are not coming on time, there we are taking a hit on the contribution margins is only because that, you know, the shipping lines has increased the freight cost and the and their charges, that is the only scenario where we have to take a hit. And otherwise, in a normalized business scenario, we are able to pass it on to the customer. Just to add, in q one, there is a less of take of the high margin product of... That that is, you know, like, free PVC. So there... Is why there is some drop in the margin. Otherwise, there is no tentative pricing or pricing pressure. But because of the change in product mix, there is some decline. Thank you.

32:00 Thank you. All those who wish to ask a question, please use the option of raise hand. We'll take the follow-up question from Bhagwat Nayak. Please go ahead. Thanks for the follow-up opportunity. Just a quick question on terms of the CapEx amount for the Palgard facility. If you could just comment on that. So it is very much there in the financial level. So it is around 67 crores in Palgar and 71... 67 in the Egypt and 71 in in the Palgar. Like, both the CapEx are similar because considering the Egypt plant, we are estimating 300 crore to revenue potential, and in is around 7 to 800 crore. So if you could just comment on that to put better understanding. Capacity of both the plant will be approx at the same level. That is around 60,000 tons per annum. Okay. So that is the same, but being new area, new territory, so we are estimated The product mix in Egypt, we are setting up a lead stabilizer plant in Egypt. Okay?

33:21 And the demand for the lead based products are higher in the Western side of the world. The differentiation is, like, for example, if lead product is, you know, it's... The sales price is somewhere ranging between 110 to 150 rupees per kg. In India, we have CPVC, is ranging from $22.50 INR to 300 rupees. In, calcium zinc that is lead free in India, it's ranging from 1, 70 rupees to 220 rupees. So, you know, because of this sales price also, there is a difference in the revenue, and, lead is the highest in production over there in, in Egypt. It's 100%. Okay. Okay. Thanks for that. It clarifies my question. Yes.

34:11 Sir, just a related question to this is that how much additional working capital does the management anticipate for... From the new Egypt plant? Could you please repeat your question? How much is the additional working capital does the management anticipate for the new Egypt plan? Roughly three month cycle, we expect, you know, on account of working. Egypt. Okay. Thank you, sir. We'll take the follow-up question from... I think there was some hand raised here. All those who wish to ask a question, please use the option of raise hand. There's a question in the q and a box from Khushbu Gandhi.

34:57 What are the margins we are expecting in Oleo Chemicals in FY twenty seven? Are we expecting margins to improve going forward once we plan to set a manufacturing facility of the same? So so, this margin are bound to increase once we set up the manufacturing facility. But as of now, we are, taking the route of CDMO for seed marketing. So Thank you, sir. Sir, since there are no further questions, would you like to give any closing comments? Well, thank you so much for... To everyone for attending this meeting.

35:45 Appreciate it. Thank you so much. Thank you, sir. Thank you to the management team, and thank you to all the participants for joining on this call. This brings us to the end of this conference call. Thank you.