Metrics raised 2
- Reclaim Rubber EBITDA margin guidance raised to 10-14% (from ~9-10% historical average)
- Renewable energy share target accelerated to 50% in FY27 (from FY28 target)
Event Participants
Executives
2
- Harsh Gandhi (Managing Director)
- Shilpa Mehta (Chief Financial Officer)
Analysts
4
- Mohit Oberoi (PJ Investment)
- Raj Mehta (Wisdom Advisors)
- Saransh Gupta (SVAN Investments)
- Tanmay Golecha (360 ONE Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹157.3 crores | +26% YoY (vs. ₹124.7 crores in Q1 FY26); driven by volume growth and improved realizations across businesses |
| EBITDA | ₹17.4 crores | +60% YoY; operating leverage and cost discipline offset raw material inflation |
| EBITDA Margin | 11.0% | +233 bps YoY (vs. 8.7%); structural margin improvement as platform matures |
| Gross Profit | ₹76.0 crores | Gross margin of 48.3%; moderated ~180 bps due to elevated raw material costs |
| Profit Before Tax | ₹8.4 crores | +161% YoY; operating leverage flow-through to PBT |
| Profit After Tax | ₹4.2 crores | More than doubled YoY (adjusted for prior period items) |
| EPR Income | ₹4.9 crores | vs. ₹4.6 crores in Q1 FY26; stable contribution from plastic recycling regulation |
| Working Capital Cycle | 86 days | Improved by 8 days vs. prior year; reflects operational discipline |
| Reclaim Rubber Volumes | +12% YoY | Volume growth on capacity utilization and export recovery |
| Reclaim Export Volumes | +20% YoY | Rebound as U.S. tariff impact normalized; bulk from North America |
| Engineering Plastics Volumes | +27% YoY | Automotive OE demand and favorable virgin nylon pricing |
| Plastic Verticals EBITDA Margin Expansion | +1,400 bps YoY | On 1,000 bps gross margin improvement |
Geographic & Segment Commentary
Rubber Recycling (Reclaim Rubber + Custom Die Forms + Pyrova Energy): Segment revenue grew 34% YoY on a standalone basis, led by reclaim volume growth (+12%) and a sharp rebound in export volumes (+20%) as U.S. tariff disruptions normalized. Pyrova Energy achieved its longest continuous reactor run since commissioning (25-day run achieved in July 2026), with cumulative investment at approximately ₹91 crores. The segment is positioned as the structural margin driver as Pyrova synergies with Reclaim materialize through shared feedstock, sourcing, and customer base.
Others (Engineering Plastics + Windmill + residual Polymer Composite): Revenue was broadly stable against a higher comparative base (polymer composite permanently shut down post-tariff). Engineering Plastics grew volumes 27% on domestic automotive OE demand and favorable virgin nylon pricing. Repurposed Polyolefin delivered a clear profitability turnaround. Segment EBITDA margins expanded 1,400 bps YoY on 1,000 bps gross margin improvement, supported by tightening Plastic EPR regulation and improved product/customer mix.
Company-Specific & Strategic Commentary
Integrated Circular Materials Platform: GRP is positioning itself as a 5-decade integrated platform spanning reclaim rubber, crumb rubber, tire pyrolysis oil, recovered carbon black (rCB), and engineering plastics, serving 8 of the top 10 global tire manufacturers with more than half of revenues from exports.
ISCC Plus Certification: First reclaim rubber manufacturer globally to earn ISCC Plus certification, affirming sustainability credentials and enabling synergy with customers pursuing circular materials.
Pyrova Energy Scale-Up: rCB plant to be commissioned by October 2026, with meaningful contribution expected from Q4 FY27. Path to 45,000 tons pyrolysis capacity targeted, followed by additional 30,000 tons in FY28. Cumulative Pyrova investment at ₹91 crores with planned ₹90-100 crores capex in FY27.
Reclaim Rubber Capacity Expansion: Debottlenecking of existing reclaim plants underway; targeting close to 20% volume growth in FY27 and mid-teen sustained volume growth over the next 3 years.
Renewable Energy: Renewable energy accounted for ~48% of standalone power consumption in FY26 (up from 37% a year ago), ahead of the FY28 target of 50% to be reached in current fiscal.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Reclaim Rubber Volumes (FY27) | ~20% growth over FY26 | Supported by new product introductions and capacity expansion |
| Reclaim Rubber Volume Growth (3-year) | Mid-teens sustained | Healthy double-digit revenue growth trajectory |
| Reclaim Rubber EBITDA Margin | 10-14% (up from ~9-10% historical avg.) | As Pyrova synergies progressively come through |
| Pyrova Capacity (FY27) | Scale to 45,000 tons | Stabilizing technology and adding 2 pyrolysis lines |
| Pyrova Capacity Addition (FY28) | Additional 30,000 tons | Subject to Solapur facility success; call in H2 FY27 |
| Pyrova EBITDA Margin (post-rCB maturity) | 18-20% | Subject to customer approvals and optimal utilization; expected by FY28 |
| Pyrova Revenue Potential (at maturity) | ₹250-300 crores | Standalone basis at full scale |
| Plastic Recycling Revenue Growth (FY27) | 20%+ | Followed by mid-teens growth through FY30 |
| Plastic EBITDA Margin | 10-15% | Stable margin supported by tightening EPR regulation |
| Total Revenue Growth (FY27) | ~20%+ | Driven by Pyrova ramp, Reclaim growth, and Plastics scaling |
| FY27 Capex | ₹90-100 crores | Primarily pyrolysis expansion (2 lines to 45 KTA), rCB plant, and Reclaim debottlenecking |
| Total Committed Capex (3-year) | ~₹250 crores | ~₹100 crores remaining to be deployed across FY28-FY29 |
| rCB Plant Commissioning | October 2026 | Meaningful revenue contribution from Q4 FY27; full stabilization 6-8 months post-commissioning |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Cost Volatility | Natural rubber prices elevated on El Niño expectations; synthetic rubber prices linked to volatile oil prices. Pass-through to customers has lag due to quarterly/6-monthly/annual contracts. Gross margin moderation of ~180 bps reflects this pressure. |
| Indirect Tariff Impact Recovery | Direct exports to U.S. have recovered, but indirect exports to non-U.S. countries supplying North American markets have not fully returned as global tire companies diverted volumes elsewhere. Polymer composite business permanently shut down, representing a one-time volume loss. |
| Pyrova Commercialization Risk | Pyrova currently shy of standalone profitability; rCB facility requires customer approvals from tire industry which typically takes several quarters. Margin trajectory to 18-20% dependent on stabilization, approvals, and replication of template in Gujarat facility. |
| Plastic EPR On-Ground Execution | While Plastic EPR norms are tightening, on-ground challenges of effective waste collection and yield improvement remain persistent. Building a compliant recycled content supply chain requires sustained effort; management prioritizing capability over short-term volume. |
| Deleveraging Timing | Net debt position remains; deleveraging timing not entirely in management's hands. Future Gujarat expansion contingent on balance sheet improvement, with no firm plans announced. |
Q&A Highlights
Tariff Impact and Competitive Landscape
- Question: Has GRP won customers from global competitors or has the market reverted to pre-tariff dynamics? (Raj Mehta, Wisdom Advisors)
- Answer: Polymer composite business permanently shut down representing a permanent volume loss. Reclaim Rubber and Custom Die Forms volumes have restored to pre-tariff levels with healthier margins due to currency tailwind. Customers starting to receive tariff credits, which could provide further margin upside. Indirect business impact on non-U.S. exports not fully recovered yet (Harsh Gandhi, MD).
FY27 Growth Drivers and Sustainability
- Question: Which business will be the largest contributor to earnings growth for remainder of FY27, and is double-digit revenue growth with margin expansion achievable? (Raj Mehta, Wisdom Advisors)
- Answer: ~20%+ overall revenue growth expected in FY27 driven by Pyrova Energy ramp, Reclaim Rubber capacity addition, and Plastics scaling. Q1 margin profile is structural, not one-time, and will continue to improve (Harsh Gandhi, MD).
rCB Project Timeline and Plastics Volume Growth
- Question: Status of rCB customer trials and revenue/margin expectations? What drove 27% Engineering Plastics volume growth? (Saransh Gupta, SVAN Investments)
- Answer: rCB plant to be commissioned by October 2026 with meaningful contribution from Q4 FY27. Once rCB is fully set up, entire Pyrova business can achieve 18-20% EBITDA margins, with FY28 likely being the maturity year. Engineering Plastics growth driven by automotive OE demand and appliance sector approvals obtained in Q4 FY26 (Harsh Gandhi, MD).
Rubber Inflation and Capex Plan
- Question: How long will rubber inflation last and what is the FY27/FY28 capex plan? Any deleveraging plans? (Tanmay Golecha, 360 ONE Capital)
- Answer: Rubber inflation likely to persist due to El Niño and oil price-linked synthetic rubber. FY27 capex targeted at ₹90-100 crores (2 pyrolysis lines to 45 KTA, rCB plant, Reclaim debottlenecking). FY28 capex call in H2 FY27. Total 3-year committed capex of ~₹250 crores with ~₹100 crores remaining. Deleveraging timing dependent on cash flow generation from businesses (Harsh Gandhi, MD).
Customer Conversation Evolution
- Question: Are customers increasingly approaching GRP for sustainability-led solutions rather than purely on price? (Shivam Gupta, Trinetra Asset Managers)
- Answer: It is a combination of factors, not either/or. Circular materials positioned on value offering mechanical/chemical property advantages, sustainability benefits, and commercial value versus virgin materials. Reclaim rubber being viewed as a strong alternative amid virgin material price volatility. Plastics adoption driven by combination of regulation and cost (Harsh Gandhi, MD).
Export Recovery Quality and Pyrova Milestones
- Question: How much of export recovery is demand normalization vs. market share gains? Are structural EBITDA margin improvements sustainable? Pyrova utilization and timeline to EBITDA positive? (Mohit Oberoi, PJ Investment)
- Answer: 20% export volume growth includes North America rebound plus Europe/other market growth from new European base. Domestic market share grew ~1% YoY; export share in focus geographies increased. Gross margin to EBITDA expansion is structural via Pyrova synergies, contract pricing power, and Plastics mix improvement. Pyrova hit 25-day continuous reactor run in July 2026; rCB commissioning in October 2026; tire industry approvals take several quarters. Total Pyrova investment targets ₹250-300 crores revenue at 15-20% EBITDA margin on standalone basis. Segment-level EBITDA margin targets: Reclaim 10-14%, Pyrova 15-20% post-rCB, Plastics 12-15% (Harsh Gandhi, MD).
Key Takeaway
GRP Limited delivered a strong start to FY27 with consolidated total income of ₹157.3 crores (+26% YoY), EBITDA of ₹17.4 crores (+60% YoY) at 11.0% margin (+233 bps YoY), and profit after tax of ₹4.2 crores (more than doubled YoY), driven by reclaim volume growth (+12%), export recovery (+20%), and improving Engineering Plastics volumes (+27%). Management outlined a clear platform thesis with the integrated circular materials strategy spanning Reclaim Rubber, Pyrova Energy (tire pyrolysis oil and rCB), and Plastics gaining structural traction, positioning the company to deliver ~20%+ revenue growth in FY27 with continued EBITDA margin expansion. The rCB plant commissioning in October 2026, Pyrova scale-up to 45,000 tons in FY27 and 75,000 tons by FY28, and ₹90-100 crores FY27 capex represent the key milestones, with management targeting ₹250-300 crores Pyrova revenue at 15-20% EBITDA margin at maturity. Key risks include raw material inflation persistence (El Niño natural rubber, oil-linked synthetic rubber), indirect tariff impact recovery to non-U.S. markets, and the multi-quarter timeline for rCB customer approvals, though management views current Q1 margin trajectory as structural rather than one-time as the platform matures.