GRP Limited Q1 FY25 Earnings Call Summary
Earnings Call Overview
• Date: August 7, 2024
• Submitted transcript to BSE and NSE on December 8, 2024
• Led by:
• Managing Director: Mr. Harsh Gandhi
• CFO: Ms. Shilpa Mehta
• Purpose: Discuss operational and financial performance for Q1 FY25
Financial Performance Highlights
• Revenue: Increased by 27% to INR 1.267 billion
• EBITDA: Rose by 88% to INR 132 million
• Profit After Tax (PAT): Grew by 122%
• Reclaim Rubber Segment: 24% revenue increase driven by domestic demand
Strategic Initiatives
• Celebrated 50th anniversary
• Transitioning to renewable energy, achieving INR 1.65 crores in energy cost savings
• Approved capital expenditure of up to INR 250 crores for new technologies and facilities
• Focus on sustainability and innovation
Q1 FY25 Financial Details (Reported by Shilpa Mehta)
• Total income: INR 1,267 million (27% YoY increase)
• Gross profit: INR 670 million (27% YoY increase)
• EBITDA margin: 10.46%
• PAT: INR 44 million (up from INR 20 million in Q1 FY24)
Capacity Expansion and Funding
• Crumb rubber capacity expansion: First phase of 40,000 to 50,000 tons
• Estimated first phase investment: INR 150 crores
• Funding sources: Internal accruals, rights issue, and debt
Demand and Market Insights
• Increased demand for reclaim rubber attributed to rising prices of natural and synthetic rubber
• Operational dips expected to be temporary due to increased freight costs and decreased export volumes
EPR (Extended Producer Responsibility) Discussion
• EPR credits not yet sold for FY '23-'24 due to pending price regulations
• Need for fair pricing to support the recycling industry emphasized
• Challenges in promoting recycled material use in tire production acknowledged
Future Outlook
• Optimism about commercialization of crumb rubber products by Q3 FY25
• Projected asset turn of 2.5 to 3 times for new investments
• Ongoing evaluation of growth opportunities
Conclusion
• Confidence expressed in the company's future and commitment to sustainability and innovation
• Encouragement for ongoing dialogue with stakeholders

Earnings Call Overview
• Date: May 21, 2024
• Submitted to: BSE Limited and National Stock Exchange of India
• Led by: Joint Managing Director Harsh Gandhi and CFO Shilpa Mehta
• Focus: Operational and financial performance for Q4 and FY '24
Key Achievements
• Extended Producer Responsibility (EPR) Regime: Successful launch in collaboration with the Indian government, generating EPR credits.
• Sustainability Initiatives:
• First reclaim rubber manufacturer certified for International Sustainability and Carbon Certification (ISCC).
• Improved Carbon Disclosure Project (CDP) rating.
• New Business Ventures:
• Commencement of repurposed polyolefin operations.
• Approval for engineering plastics portfolio from a European compounder.
Financial Performance
• Q4 Results:
• Total income: Rs. 1,381 million (43% YoY increase).
• Gross profit: Rs. 790 million (60% increase).
• EBITDA: Rs. 229 million (227% increase), EBITDA margin: 16.6%.
• PAT: Rs. 117 million (up from Rs. 28 million).
• FY '24 Results:
• Total income: Rs. 4,630 million (slight increase from FY '23).
• PAT: Rs. 226 million (62% increase).
• Reduction in working capital days from 98 to 74.
• CAPEX investment: Rs. 499 million.
• Recommended final dividend: Rs. 37.50 per share.
Future Outlook
• Anticipated stabilization of the EPR regime leading to positive cash flow.
• Plans for increased investments to scale operations and reduce working capital.
• Expansion in crumb rubber capacity to support future initiatives.
• Focus on developing partnerships in the compounding industry and new applications in composites.
EPR Credits Discussion
• EPR credits generated from domestic waste, not tied to export sales.
• Revenue from credits recognized only upon sale; market for credits still developing.
• Current EPR market for plastics is volatile.
Financial Outlook and Challenges
• Historical EBITDA margins improving, but external factors (freight costs, geopolitical tensions) create unpredictability.
• Focus on increasing volumes due to demand for circular materials in the tire industry.
Capital Allocation and Capacity Utilization
• Crumb rubber project estimated cost: 35-40 crores, with a capacity of 30,000 tons in two phases.
• No immediate need for new capacity in recycled polyolefin.
• Current high-value recycled rubber capacity: 5-7%.
Industry Dynamics
• Uncertainty in demand-supply dynamics for EPR obligations.
• Government mechanisms in place to adjust market balance.
Conclusion
• Harsh Gandhi emphasized the company's commitment to leveraging strengths for future growth and expressed gratitude for participant insights.

Submission Details
• Date of Submission: November 11, 2023
• Earnings Call Date: November 3, 2023
• Recipient: BSE Limited and National Stock Exchange of India
• Key Participants: Harsh Gandhi (Joint Managing Director), Shilpa Mehta (Chief Financial Officer)
• Document Note: Edited for factual errors; audio recordings are the official reference.
Company Performance Highlights
• Renewable Energy Initiatives:
• Increased renewable energy usage from 7% to 32% year-over-year.
• Achieved savings of INR 14 million in H1 FY'24.
• Operational Recovery:
• Engineering Plastics business returned to pre-fire operational levels.
• Growth in Repurposed Polyolefins business ahead of government mandates.
• Macroeconomic Context:
• Challenges in the global tyre market due to geopolitical tensions.
• Slight increase in rubber consumption in India.
• Maintained volume growth and improved margins despite lower demand for reclaim rubber.
Financial Performance
• Q2 FY'24 Results:
• Total income: INR 1,148 million (down 7% YoY).
• Gross profit: INR 608 million (down 14% YoY).
• EBITDA: INR 115 million (down 7% YoY).
• Profit After Tax (PAT): INR 47 million (down 24% YoY, up 138% sequentially).
• H1 FY'24 Results:
• Total income: INR 2,147 million (down 13% YoY).
• Gross profit: INR 1,135 million (down 17% YoY).
• EBITDA: INR 185 million (stable).
• PAT: INR 67 million (down 8% YoY).
Future Plans and Rights Issue
• Rights Issue:
• Planned to raise up to INR 45 crores for growth in tyre and plastic recycling.
• Expected to conclude in about 90 days.
• Management Insights:
• Focus on exploring new opportunities in recycling.
• Emphasis on technology upgrades and supply chain improvements.
Market and Strategic Insights
• Pricing Strategies:
• Pricing influenced by customer contracts, market conditions, currency, and freight.
• Extended Producer Responsibility (EPR):
• Anticipated industry consolidation due to EPR policy.
• Company aims for global opportunities, with 70% of revenue from international markets.
• Technology and Supply Chain:
• Investments in technology for Reclaim Rubber to enhance quality.
• Adoption of a hub-and-spoke model for waste collection efficiency.
Conclusion
• Management's Outlook:
• Positive about future growth driven by sustainability initiatives.
• Encouragement for ongoing investor dialogue for insights and support.

Submission Details
• Date of Notice: June 6, 2023
• Recipient: BSE Limited and National Stock Exchange of India
• Earnings Call Date: May 31, 2023
• Signatory: Jyoti Sancheti, Company Secretary & Compliance Officer
Key Participants
• Mr. Harsh Gandhi: Joint Managing Director
• Ms. Shilpa Mehta: Chief Financial Officer
Company Developments
• Stake Sales:
• Sold stake in Marangoni GRP, gaining INR 5.7 crores.
• Divested from Grip Polymers Limited.
• New Initiatives:
• Established GRP Circular Solutions Limited for plastic recycling.
• Acquired three windmills, increasing renewable energy capacity to 6 megawatts (60% of energy load).
Operational Highlights
• Fire Incident:
• Occurred at Solapur facility; no injuries reported.
• Insurance claim filed for INR 16.45 crores; infrastructure upgrades planned.
• Volume Growth:
• 5% growth in Reclaim Rubber business; decline in last quarter due to reduced exports.
• Engineering Plastics segment saw 30% growth until Q3, affected by fire and energy costs.
Financial Performance
• Q4 FY23:
• Revenue declined by 14% to INR 955 million.
• Gross profit decreased by 23% to INR 483 million; EBITDA fell by 27% to INR 58 million.
• Profit after tax rose by 19% to INR 28 million.
• FY23 Overview:
• Revenue increased by 16% to INR 4,510 million.
• Gross profit and EBITDA grew by 17% and 7%, respectively.
• Profit after tax surged 142% to INR 139 million.
Market Conditions
• Challenges:
• Decline in revenue for Reclaim and Non-Reclaim businesses due to unfavorable international conditions and fire incident.
• Weak sentiment in EU and North America expected to persist.
• Opportunities:
• Revenue growth in FY23 attributed to higher selling prices and favorable currency effects.
Extended Producer Responsibility (EPR)
• Impact on Business:
• EPR for plastics delayed; voluntary credit purchases generating income.
• Anticipated positive EPR income from tire recycling.
Future Outlook
• Margin Expectations:
• Freight costs decreased by 30% to 50%, expected to improve margins.
• Engineering Plastics business projected to utilize 70% of expanded capacity.
• Growth Strategy:
• Focus on cash generation for investments in tire and plastic recycling technologies.
• Anticipated double-digit growth over the next couple of years.
Investor Inquiries
• Mergers and Acquisitions:
• Questions directed to tire companies regarding reclaim rubber producers.
• High-Performance Products:
• Advanced stages of technology approval for new reclaim rubber products.
• Competitive Edge:
• Engineering Plastics division to leverage in-house sourced raw materials.
Conclusion
• Commitment to Innovation:
• Emphasis on improved performance due to recent changes and government regulations.
• Focus on sustainability and operational efficiency while navigating market challenges.