Summary
Huhtamaki India Limited - Q4 CY 2025 Earnings Call Summary Friday, February 13, 2026, 12:00 PM
Event Participants
Executives 1 Kamal Taneja (Managing Director)
Analysts 6 Mehul (NMV Securities), Mohit Mishra (ICICI Securities), Rajakumar Vaidya Nathan (RK Investments), Ritesh Poladia (Girik Capital), Shital Shah (Individual Investor), Sunil Jain (Nirmal Bang Securities), Vikram Kotak (Crest Capital), Zaki Abbas (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Net Sales (Q4) | ₹600.00 crores | Flat YoY/QoQ; volumes slightly decreased YoY but remained steady compared to Q3. |
| Net Sales (Full Year) | ₹2,390.00 crores | -2.5% YoY; decline from ₹2,450.00 crores in CY24 due to strategic exits from low-margin segments. |
| PBT (Q4) | ₹41.00 crores | +169.7% YoY; significant improvement from ₹15.20 crores in Q4 CY24 via product mix optimization. |
| PBT (Full Year) | ₹157.00 crores | +82.5% YoY; strong growth from ₹86.00 crores (pre-exceptional) driven by operational efficiencies. |
| Net Profit (Q4) | ₹30.30 crores | +158.9% YoY; increase from ₹11.70 crores in Q4 CY24; down QoQ from ₹36.00 crores. |
| Net Profit (Full Year) | ₹118.20 crores | +34.3% YoY; includes ₹23.70 crores exceptional gain in previous year from land sales. |
| EPS (Q4) | ₹4.02 | Reflects improved profitability and lower cost structure despite flat revenue. |
| Debt (ECB) | ₹100.00 crores | First tranche prepaid in Sep 2025; balance tranche scheduled for repayment in June 2027. |
| Cash & Liquidity | ₹480.00 crores | Comprised of ₹298.90 crores in bank balances and ~₹181.10 crores in mutual funds. |
Geographic & Segment Commentary
- Flexible Packaging: This remains the primary segment for the India-listed entity. Management noted high competitive intensity in the Indian FMCG landscape compared to global markets, which puts continuous pressure on pricing and necessitates operational efficiency.
- India Market: Operations are spread across sites like Khopoli, Rudrapur, and Silvassa. The focus has shifted from pure volume to “high-quality business,” refining the customer portfolio to prioritize profitability over market share in low-margin categories.
Company-Specific & Strategic Commentary
- Operational Efficiency: The company implemented a cost reduction and waste control program, leveraging global Huhtamaki plant expertise. This resulted in PBT growth despite a 2.5% decline in annual revenue.
- Sustainability (Blueloop): Management maintains faith in the recyclable “Blueloop” range, though current asset utilization is only 25-30%. Growth has been slower than expected due to delayed regulatory enforcement and slow customer adaptation.
- Safety and ESG: Achieved a ~50% reduction in recordable incidents and lost time injuries. Three sites (Khopoli, Rudrapur, Silvassa) achieved Zero Liquid Discharge (ZLD) status.
- Product Innovation: The company continues to transfer technology and products from its global parent. Management highlighted that while they pay for centralized IT/global services (₹80 crores in CY24), they do not pay any “royalty” fees.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Strategic Priorities | Profitable Growth | Management is focusing on “where to play,” targeting segments with higher value-add. |
| Capital Expenditure | Minimal material Capex | No significant capex planned for the immediate year; focus remains on organic growth. |
| Renewable Energy | Q2 CY 2026 | Ongoing renewable electricity project expected to start generation by the second quarter. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory & Policy | Changes in labor codes (Nov 2024) and environmental regulations pose compliance risks, though management claims proactive mitigation on employee liabilities. |
| Market Fragmentation | The Indian packaging market is highly fragmented, making it difficult to maintain market share against regional players who are currently outgrowing larger brands. |
| Customer Pull | Adoption of sustainable packaging (Blueloop) is dependent on customer timelines and “moving goalposts” regarding their own sustainability targets. |
Q&A Highlights
Profitability & Margins
- Question: How sustainable are these improved margins moving forward? (Rajakumar V. Nathan)
- Answer: Changes made to factory operations and go-to-market strategies are structural and sustainable. While macro factors like political environment and market volume are external, the operational improvements are permanent (Kamal Taneja).
Parental Charges & IT Costs
- Question: Why are IT/Centralized costs so high (₹80 crores) relative to EBITDA? (Vipul Shah)
- Answer: These charges cover global innovation, IT infrastructure, and operational support. Independent cost structures for divested businesses often prove more expensive than these shared global services (Kamal Taneja).
Growth Strategy
- Question: Revenue has been stagnant at ₹2,500 crores for several years. Is there a plan to outperform the market? (Sunil Jain)
- Answer: The recent stagnation is partly due to a conscious decision to exit low-profit segments. Future focus is on “profitable growth, capital discipline, and accountability” (Kamal Taneja).
Utilization & Returns
- Question: What is the current capacity utilization and the outlook for return ratios? (Ritesh Poladia)
- Answer: Efficiency gains have created more room for growth within existing capacity. While current returns are comparable to industry peers, there is a commitment to further improvement (Kamal Taneja).
Key Takeaway
Huhtamaki India delivered a strong recovery in profitability for CY 2025, with PBT growing 82.5% YoY to ₹157 crores, even as net sales declined by 2.5% to ₹2,390 crores. This performance was driven by a deliberate strategic shift to exit low-margin segments and a rigorous cost-reduction program that lowered waste and overheads. The company maintains a robust balance sheet with approximately ₹480 crores in cash and mutual funds, following the prepayment of ECB tranches. Under new leadership, the company is prioritizing “profitable growth” over pure volume, while continuing to push sustainable solutions like “Blueloop,” which currently sees 25-30% utilization. While revenue growth remains a challenge due to market fragmentation and competitive pressures in the FMCG sector, management remains focused on capital discipline and operational accountability to sustain double-digit EBITDA margins.
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