Xpro India Ltd (XPROINDIA) Q2FY27 Concall Transcript - Sep-2026 Qtr
Vidhi: Ladies and gentlemen, good day. You all have been connected to Xpro India Limited Q2 and H1 FY27 earnings conference call. The call will begin shortly, please stay connected.
Vidhi: Ladies and gentlemen, good day, and welcome to Xpro India Limited Q2 and H1 FY27 earnings conference call. As a reminder, all participant lines will be in
Vidhi: listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. C. Bhaskar, Managing Director from Xpro India Limited. Thank you and over to you, sir.
C. Bhaskar (Xpro India Limited): Thank you, Vidhi. Good morning, friends. I extend a very warm welcome to all participants to this Q2 and H1 financial year 2027 earnings call of Xpro India Limited. Many of us would have interacted in the past. Nonetheless, I introduce myself once again as C. Bhaskar, Managing Director of Xpro India Limited. Today on this call, I have with me, Shri Girish Girish Behal, our Managing Director Designate and Chief Executive Officer, Shri Vinay Kumar Agarwal, our President Finance and Chief Financial Officer, Shri Himanshu Bakshi, our Group Technical Counsel, Shri Kamal Sewda, our Company Secretary. MUFG in time, whom many of you will recall remember as Orient Capital earlier, is our investment relations partner and is as always coordinating this session. We are continuing the practice commenced a few years ago of hosting this conference call for the benefit of our investor community and for keeping investors, analysts, familiar and updated about our results and key developments at unit at our units. As many of you have already had the opportunity to meet meet us on earlier calls, at the AGM, or in occasional investor meets, I shall not dwell on reintroducing our company. I must add that we are transparent in our approach, but must state that all discussions here will be within boundaries reasonably imposed by our strategic and competitive position and of course legal requirements as may be applicable. As you are all aware, Xpro India Limited is a diversified multi-locational company, primarily focused on polymer processing with extremely strong governance standards. The company is family-led, and is a professionally managed arm of one of India's largest and most reputed industrial houses, the Birlas. Xpro itself currently has manufacturing facilities at Greater Noida in UP, Ranjangaon in Maharashtra, and Barjora in West Bengal, besides a subsidiary in the United Arab Emirates at Ras Al Khaimah. Our operating units have built up special skills and competencies in the specialized field of coextrusion with application in the manufacture of oriented films, multilayer plastic sheets and multilayer cast plastic films. Thermoforming supports downstream processing of sheets. Xpro specializes in advanced materials, and is India's leading manufacturer of polypropylene dielectric capacitor films. These precision engineered ultra-thin films range from the ultra film range of 2 micron and up to 16 micron in thickness and form the core of capacitors used in EV inverters, solar systems, wind turbines, and industrial drives. We are also India's largest supplier of sheets and liners to the refrigerator industry. Driven by technical precision, quality, and development strength, besides customer qualification cycles and support, Xpro has faced well the global competition without tariff protection to become the premier supplier in this part of the world. Our results for the quarter and half year ended September 30, 2026, have already been uploaded on stock exchange portals and you may have had the opportunity
C. Bhaskar (Xpro India Limited): also go through our press release and the presentation that we have uploaded to the exchange site and also on our own website. With the new dielectric film line at Barjora operational, the company entered '26, '27 with materially expanded capacity and a stronger platform for volume and export growth. The new line has doubled our nameplate capacity in India to 8,000 metric tons of dielectric films a year. Commercial ramp-up of the line is now underway, and its full impact will be reflected commensurately as we go forward. With regard to dielectric capacitor films as you are, as most of you are aware, the company operates in a product and process space that is fundamentally different from BOPP for conventional uses. Polypropylene dielectric film mainly for capacitor applications is a specification intensive and precision-driven, and the industry is limited globally amongst a select number of producers. Building credible scale and reputation in this space requires technical capability and consistent product quality attributes that our BIAX operations have developed systematically earning a strong standing among discerning clients while maintaining a first mover domestic producer advantage. Interestingly, the demand backdrop here is structural not cyclical. Electrification, renewable energy buildout, grid modernization, data centers, electric mobility, and traction systems, all place a direct and growing premium on film durability and dielectric performance with long-term capital development cycles that consistently reinforce end use demand. Our films go into capacitors used in EV inverters, solar and wind installations, grid equipment, railways and data centers. So, all of these are good for us. Product development is directed deliberately at the highest value end, ultra-thin hazy and semi-rough films for power capacitors, EV systems, and railway applications. These are also high entry barrier segments which are technically demanding, relation-driven, and margin supportive. During the quarter, we strengthened our position and our recorded market share in both segments of dielectric films that is plain films and hazy films. Dielectric film exports nearly doubled over last year. New customers and applications are being onboarded for the new capacity while management continues to focus on driving volume growth and enhancing margins while pricing has to remain dynamic and flexible to retain market traction in a frequently volatile scenario even at the risk of occasional impact on margins. Capacity additions are sharpening the company's trajectory. The new dielectric film as I just mentioned was commissioned in March, meaningfully expanded domestic capacity while extending reach into premium performance critical variants including ultra-thin gauges when differentiation is sharpest. Coming to the new line, production on the new line grew by 35% over the last quarter. Film from this line is already being supplied commercially to customers in India and overseas and a number of other customers are going through the approval process. Capacitor life test of 1,000 to 2,000 hours are also going on at some customer end. These things take the routine time in our industry and how quickly approval turns into volumes will depend on some of these results. Till then, the operating cost, depreciation, and finance cost of the new capacity continue to weigh on profitability. We continue to put a lot of effort into research and development. We have developed a new range of ultra-thin films on the new line and the 3.5-micron film has already been approved by some key customers.
C. Bhaskar (Xpro India Limited): Our R&D team is also working on several other development projects and we will share more on this as and when we go along. I am also happy to share, say, and share that Xpro this year has already received three awards from ELCINA, the Electronics Industries Association of India for excellence in quality, excellence in research and development and environment protection and sustainable development. All indicating a good recognition of the work being done by our teams in all areas. In the Coex related businesses, Coex suited sheets and thermofoam refrigerator liners are manufactured on multiple lines available with the Coex Division at Ranjangaon and Greater Noida. Our products are usually custom made to customer needs and based on various poly-polymers, including ABS, polystyrene, and polypropylene. Being an established supplier to most leading brands in the refrigerator sector, volumes are directly correlated to the consumer end-market conditions. The Indian refrigerator production grew about 8% in Q2 over last year, which is better than the 4% we saw in Q1. On the other hand, our sheet and liners volume grew by 26% in Q2 over last year, well ahead of the market with both Greater Noida and Ranjangaon units performing well, indicating clearly that we continue to gain market share. Revenue growth came from higher volumes and also from higher selling prices as the steep increases in polymer costs were passed on. Cast films are facing facing competitive pressure and here our focus is on release films and new product development on one of the cast film lines, which we have substantially revamped. Now coming to the Q2 performance, revenue from operations during the quarter was at ₹176.69 crores against ₹119.91 crores in the corresponding previous year, reflecting a growth of 47.4%. Operating PBIDT, before other income and Forex differences, was at ₹16.4 crores against ₹10.68 crores, up 53%, actually higher than the revenue growth. PBT for the quarter was ₹12.79 crores against ₹7.6 crores in the corresponding previous quarter. Profit after tax was ₹9.52 crores against ₹5.86 crores, reflecting an increase of 62%. In this quarter, dielectric films recorded revenue growth of 64% over the corresponding quarter last year, while the sheets and cast film business recorded growth of 41% over the corresponding quarter last year. Coming to the first 6 months of the financial year or the half-year performance, the company reaffirmed its operational resilience in the volatile business environment marked by supply chain worries, rising costs, geopolitical tensions, underscoring the efficacy of our operational strategies and the competitive trends. Aggregate production volume rose 14% to 19,218 tonnes from 16,795 tonnes. Net revenues were 351.11 crores, up 32.6% from the INR 264.81 crores in the corresponding previous period. This comes from higher volumes in refrigerator sheets and liners, and from selling price adjustments as polymer prices remained volatile. Total exports were higher at 17.09 crores against 9.39 crores. You will see that we are well on the track of exceeding the turnover
C. Bhaskar (Xpro India Limited): of 700 crores. If this market sustains itself the way it is during the year, which should be a new high. Profitability improved overall supported by higher revenues and a significantly lower forex impact, even as competitive pricing, input cost volatility and higher depreciation and finance costs continued to weigh. PBDT before non-operating forex differences was 36.7 crores against 30.27 crores in the previous corresponding period. A forex loss was 32 lakhs only of which 78 lakhs were were unrealized, resulting from accounting standard requirements. This translated in the overall to a PBT of Rs 26.51 crores against 13.63 crores in the corresponding previous period. I must reiterate that there is no outstanding long-term borrowing for existing operations. However, we had from a financial perspective, particularly interest savings, that would accrue in future years, gone in for supplier credit in the nature of ECB for financing the new line at Barjora. We have already commenced repayments and a few installments have already been made, paid. During the half year, repayment of non-current borrowings amounted to Rs 6.65 crores. Total borrowings stood at Rs 106.7 crores as on September 30th, 2026, against Rs 111.81 crores as of March 31st, 2026, while the net debt-to-equity remained negligible with a return on equity of 5.3% and return on capital of 7.2% for the half year. A dividend of INR 2 per equity share for the financial year 2025-26, as approved by shareholders at the AGM of July 20th, 2026, was paid on July 28th, 2026. The paid-up equity of the company, paid-up equity capital of the company, stands at Rs 23.7 crores with a net worth of Rs 729.39 crores. The paid-up equity capital capital remained unchanged during the half year. All the capital raised earlier through preferential issues and QIP has been, or is being, deployed for stated purposes with Rs 64.29 crores held in bank deposits of the company and its subsidiary pending utilization. Deployments are also monitored independently, as required. A quick update on the status of capacity addition. As already mentioned, the capacity at Barjora has been in commercial operations since end March 2026. The project in UAE is broadly on track. Geopolitical conditions in West Asia remain fluid with the ongoing regional conflict contributing to heightened uncertainty, elevated costs, and intermittent disruptions to trade and transport, with risks amplified whenever hostilities persisted. However, all our key equipment is at site and has been installed. In fact, we have already commenced commissioning of utility equipment. Electricity, gas, water, all, all fundamental utilities are at site and all signals go on that front. I would also add that there has been no disturbance of any significance in the Al Ghail area, where our site is located, and project execution has not been hampered due to any local disturbances on account of the warlike situation. Barring unforeseen circumstances, commercial operations are expected later during this financial year. Management of course continues to monitor geopolitical developments to take appropriate risk mitigation measures, bearing in mind also the safety of our suppliers,
C. Bhaskar (Xpro India Limited): our staff. The subsidiary's accounts mainly reflect pre-operative expenses, capital advances and the use of foreign supplier credit for capital expenditure. In accordance with applicable accounting standards, the company recorded a total loss of the the subsidiary company recorded a total loss of AED 1.73 million during the half year reflecting only guarantee, lease and other accumulated costs recognized as expenses for the project under implementation. We are already working on the market for the UAE line which will be our third dielectric film line and we are confident of placing its volumes. Our exports were up 82% in the first half and we have gained share both in India and in exports even in a soft market. Film from the new Barjora line is already going to customers in India and overseas, and we are now in the approval process with some of the leading global capacitor manufacturers. These relationships will also help us when the third line starts. Customers in advanced applications are also looking for qualified and reliable suppliers and our manufacturing unit our additional manufacturing unit will only help us serve them better. With the demand we see coming from electrification, renewable energy, grid modernization, and data centers, and in addition to certain cap film capacities in advanced markets aging, we are confident that this capacity will be will serve the growing demand across the globe. With this, I would like to open the floor to questions and I will also request Gireesh and to be available to answer appropriate questions. Thank you.
Vidhi: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Debarshi Dev from Ashvi Holdings. Please, go ahead.
Debarshi Dev (Ashvi Holdings): Hello. Thank you for the opportunity. So, my question is, I would like to get a guidance of the sustainable EBITDA margin for the entire business when you start selling the value added products. And what would be the revenue per metric ton realization and EBITDA per metric ton realization for export business particularly in specialty thin films? So, I would like to know about that. Besides that, I would My second question would be, the Barjora line two has already been commissioned and it has started its production. So, when the revenue can be can be expected to get reflected in the top line from So, that's my question.
C. Bhaskar (Xpro India Limited): Your particular question about a guidance for a long-term EBITDA is probably outside the purview of this call. However, and you've also said about a sustainable EBITDA for the entire business. I assume you are looking at the business, as we always suggest, as separately for the dielectric film businesses which is high EBITDA business and the co-extruded sheets and films businesses which is a low EBITDA business. Good the guidance for the co-extruded business is something which we have stated and we can happily continue to place on record is in the 5% to 7% EBITDA range and it is expected to sustain in that range. We don't see a dramatic increase or a dramatic decrease based on current indicative trends. That is one. Of course, you see slightly when price increases happen only on account of straight pass-through of raw material prices, there is an apparent reduction in EBITDA while the value addition remains flat. But that is that's only an accounting indicator. Going into the capacitor businesses, you are absolutely right in
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