Pyramid Technoplast Ltd Management Discussions

Global Economy

The global economy is navigating a period of heightened uncertainty, marked by significant shifts in trade policy, tightening financial conditions, and slowing growth momentum. Following an estimated expansion of 2.8% in 2024, world output is projected to decelerate to 2.3% in 2025 before recovering modestly to 2.4% in 2026, well below the 2000–2019 historical average of 3.7%. Growth in advanced economies is expected to soften to 1.4% in 2025, weighed down by weaker demand, elevated uncertainty, and tighter financial conditions. The United States is forecast to grow by 1.8%, reflecting the combined effects of broad-based tariff increases, softer consumer and business sentiment, and slowing investment. The euro area is expected to remain subdued at 0.8%, as energy price adjustments and fiscal consolidation measures continue to act as headwinds.

Emerging market and developing economies (EMDEs) are projected to expand by 3.5% in 2025, with considerable heterogeneity. Emerging Asia remains the primary growth engine, expanding by 4.3%. While other regions, including Latin America (1.9%) and sub-Saharan Africa (3.7%), face headwinds from trade disruptions, elevated debt burdens, and policy uncertainty. Global headline inflation is forecast to ease to 4.3% in 2025, down from 5.7% in 2024, though the pace of disinflation has slowed. Inflation in advanced economies remains above target, in part reflecting the pass-through of recent tariffs. For EMDEs, price pressures are easing more rapidly, although food and energy price volatility remain sources of risk.

International trade volumes are expected to grow by just 1.7% in 2025, a sharp downgrade from earlier projections, as tariff escalation, fragmentation of supply chains, and rising non-tariff barriers weigh on cross-border flows. Investment and consumption decisions are being deferred in many economies amid unprecedented levels of trade policy uncertainty, amplified by tighter financing conditions and exchange rate volatility.

Sources: International Monetary Fund, World Economic Outlook: A Critical Juncture amid Policy Shifts, April 2025.

Indian Economy

India continues to demonstrate remarkable resilience amid a challenging global environment, retaining its position as the fifth-largest economy and poised to overtake Japan to become the worlds fourth-largest economy by the end of FY 2025-26. The IMFs World Economic Outlook: April 2025 projects Indias real GDP growth at 6.3% in FY 2026. This outpaces most major economies and underscores Indias role as a key driver of global growth. Strong domestic demand continued public and private investment, and a broad-based expansion across manufacturing, construction, and services are the main pillars of this performance.

High-frequency indicators reinforce the robust growth trajectory. Goods and Services Tax (GST) collections have consistently set new records, signalling buoyant consumption and formalization of the economy. The manufacturing Purchasing Managers Index (PMI) remains firmly in expansionary territory, supported by rising capacity utilization and renewed private sector investment. Rural consumption has picked up momentum, aided by government support programs and improving farm incomes. Rising per capita incomes and a surge in private capital expenditure also point to strengthening domestic fundamentals.

Headline consumer price inflation (CPI) has moderated significantly, easing to 3.34% in March 2025 and further to 2.10% in June 2025, marking its lowest level in more than six years. Food price volatility remains a watch point, but the disinflationary trend has provided space for monetary policy accommodation. In June 2025, the Reserve Bank of India (RBI) delivered a repo rate cut, lowering the policy rate to 5.50%, and shifted its monetary stance from "accommodative" to "neutral.", and a further cut in the Cash Reserve Ratio (CRR) to inject liquidity and support credit growth. A majority of economists now expect the repo rate to remain at 5.50% in the near term, with scope for further cuts if inflation stays below target.

Fiscal policy remains supportive of growth. The Union Budget 2025-26 builds on the governments ongoing emphasis on infrastructure and capital formation, targeting a double-digit increase in capital expenditure after an 11.1% rise to Rs11.1 lakh crore in FY 2024-25. Investments in transportation networks, renewable energy, and digital public infrastructure are expected to enhance productivity and crowd in private investment. Structural reforms to boost labour market participation, improve ease of doing business, and expand digital access remain high on the policy agenda.

Indias long-term outlook remains favourable, supported by its demographic dividend, expanding urban markets, and deepening integration into global value chains. Continued policy focus on fiscal prudence, supply-side reforms, and sustainable investment is expected to secure Indias growth trajectory and reinforce its resilience to global headwinds.

Sources: International Monetary Fund, World Economic Outlook: A Critical Juncture amid Policy Shifts, April 2025; Reserve Bank of India; Ministry of Statistics & Programme Implementation; Ministry of Finance; Reuters reporting.

Indian Industrial Packaging Industry

The Indian industrial packaging industry recorded a market size of approximately USD 4.9 billion in 2024 and is projected to grow at a CAGR of around 6.9% between 2025-2033, driven by escalating industrialization, burgeoning e-commerce and logistics sectors, and increased regulatory oversight of hazardous goods. Globally, industrial packaging reached USD 64 billion in 2024 and is forecast to hit USD 84.7 billion by 2033, reflecting sustained growth in technology adoption, trade activity, stringent compliance norms, and sustainability initiatives.

Intermediate Bulk Containers (IBCs)

In India, the IBC market was valued at approximately USD 170.5 million in 2023 and is expected to reach USD 260.5 million by 2033, growing at a CAGR of 3.8%. These containers are favored for their stackability, reusability, and adherence to UN safety standards. The growth trajectory is shaped by demand from sectors such as specialty chemicals, agrochemicals, and pharmaceuticals—especially those serving export markets where compliance and efficiency are critical.

Steel/Mild Steel Drums (MS Drums)

The Indian steel drum market—covering mild steel variants—was estimated at USD 281.2 million in 2023 and is projected to grow to USD 468.7 million by 2033, at an estimated CAGR of 4.6%. Steel drums remain a mainstay for transporting flammable, temperature-sensitive, or corrosive materials such as solvents, lubricants, and oils. Globally, the steel drum and IBC market expanded from USD 15.3 billion in 2024 to USD 16.4 billion in 2025, with a strong forecast to reach USD 22.6 billion by 2035 (CAGR ~4%).

Polymer (Plastic) Drums

Although detailed India-specific data is limited, the polymer drum market represents a significant portion of the broader plastic packaging market in India, which was valued at USD 12.7 billion in 2024 and expected to grow to USD 17 billion by 2033, at a CAGR of 3.3%. Within this context, polymer drums—made of HDPE and similar materials—are increasingly preferred for applications requiring chemical resistance, light weight, and food-grade safety, such as in agrochemicals, pharmaceuticals, and food ingredients.

End-Use Sector Demand

Overall industrial packaging demand from these sectors is projected to grow at ~7–8% CAGR, in line with sector expansion.

Sector
Specialty Chemicals
Market Size & CAGR	Packaging Implications
USD 48 B (2023) USD 70 B (2027); CAGR ~11%	Requires high-grade drums & IBC due to hazard classification, large export orientation.
Sector
Pharmaceuticals
Market Size & CAGR	Packaging Implications
Exports USD 25 B (2024) USD 30 B (2026)	Bulk APIs need UN-certified, contamination-proof packaging (IBC/polymer drums).
Sector
Chemicals & Petrochem
Market Size & CAGR	Packaging Implications
India USD 220 B (2024) USD 300 B (2030) (Data Bridge Market Research, Capital Market, Global Market Insights Inc.)	Drives demand across steel and plastic drums; strong requirement for safe transport.
Sector
Food & Beverage (B2B)
Market Size & CAGR	Packaging Implications
Flexible packaging USD 20.4 B (2025); CAGR ~11.5%	Increasing adoption of food-grade HDPE drums & IBCs with regulatory compliance.
Sector
Agrochemicals
Market Size & CAGR	Packaging Implications
USD 13 B (2027); CAGR ~7–8%	Requires anti-leak, tamper-proof, export-grade packaging.

Opportunities

• Export momentum in chemicals, pharma, and agrochemicals demands UN/ISO-compliant industrial packaging.

• Sustainability mandates and extended producer responsibility (EPR) push for reusable and recyclable packaging formats.

• Technological advances, including track-and-trace, smart labels, and barrier coatings offer differentiation.

• Make in India & PLI schemes incentivizing local manufacturing create packaging demand aligned with indigenous production.

• Market consolidation into organized, branded formats presents opportunities for premiumization and margin enhancement.

Challenges

• Price volatility in raw materials (HDPE, steel),pressures margins, and cost predictability.

• Unorganized competitor base limits pricing, and scalability.

• Regulatory complexity in hazardous materials transport and evolving packaging norms (e.g., plastic recycling targets).

• High capex demands for scaling capacity—especially in cleaning, recycling, and certification.

• Logistics inefficiencies, particularly in returnable packaging, add to cost and strain systems.

Sources: Market Outlook I IMARC Group I Future Market Insights I Data Bridge Market Insights I Capital Markets I Global Market Insights

Company Overview

Pyramid Technoplast Limited (‘Pyramid Technoplast or ‘the Company"), founded in 1997, is a prominent industrial packaging company in India. The Company is involved in manufacturing and supplying polymer based molded products to meet the packaging needs of diverse industries, including chemical, agrochemical, specialty chemical and pharmaceutical industries.

The Companys comprehensive portfolio comprises

• MS Drums

• Polymer Drums

• Intermediate Bulk Containers (IBCs)

By operating 8 strategically placed world class manufacturing units close to major industrial hubs - two are located in Silvassa, five in Bharuch and one at Wada, with total installed capacities being 27,203 MTPA for Polymer Drums, 4,20,000 units of IBC and 10,800 MTPA for MS Drums, the Company gains a competitive advantage through cost optimisation and timely deliveries.

Committed to innovation, customer centricity and sustainable growth, the Company continues to harness its manufacturing excellence, comprehensive portfolio and competent workforce to efficiently cater to evolving industry needs, solidifying its position as a trusted name in industrial packaging segment.

Business Segment

Intermediate Bulk Containers

IBCs are high capacity industrial containers designed for mass handling, transportation and storage of bulk liquids and semi-solids across chemicals, pharmaceuticals and specialty chemical industries. Pyramid Technoplast, with the relevant know-how, technology and equipment has the capability to manufacture IBCs up to 1000 litre capacity, making it one of the leading manufacturer of rigid IBCs in India.

Pyramid Technoplast leverages its modern manufacturing facilities to cater to evolving customer requirements. The Company is also expanding capacity with the second IBC line commissioned at Unit 7 in Bharuch in FY 2024-25, with the first line operating at 60% utilisation. Additionally, Phase 1 at Unit 8 at Wada plant with one IBC line was set up in the fiscal year, laying a strong foundation for continued growth.

The IBC segment sustained its robust growth trajectory in FY 2024-25 with sales of Rs 198.17 Cr which constituted 34% of Total Revenues, generating 21% year-on-year volume growth and 12% year-on-year revenue growth.

Mild Steel Drums

MS Drums play a key role in the safe packaging and transport of chemicals, agrochemicals and specialty chemicals. The Company manufactures a wide range of sturdy and high quality MS Drums, for safe use with both hazardous and non-hazardous materials. Pyramid Technoplast has significantly ramped up production through automation and the adoption of the latest manufacturing processes.

Driven by automation, the Company has significantly increased MS Drum production capacity at Unit 6 in Bharuch during the year, from 50,000 to 90,000 units per month. Currently, trial runs are underway for the expanded capacity, with plans to begin commercial production in the second half of 2025. To support future expansion, the Company has also acquired adjacent land, allowing for scalability from 70,000 units up to 90,000 units as demand requirement. Additionally, plans are in place to establish Unit 8 at Wada for manufacturing MS Drums.

The MS Drums segment has delivered a robust performance, achieving sales of Rs 62.90 Cr. in FY 2024-25, contributing 11% to Total Revenues, with 39% volume growth and 34% revenue growth year on year.

With 90% of manual processes already automated in FY 2024-25, the segment is expected to benefit from improved margins in the coming fiscal.

Plastic Barrels

The Company offers a diverse range of plastic barrels, including polymer drums, widely used in agrochemical, specialty chemical and food processing industries for safe packaging and transportation of industrial products. Backed by strong plastic barrels production capacity across multiple manufacturing units, the segment represents a core part of the portfolio, delivering durable and dependable packaging solutions to customers.

In FY 2025, the plastic barrels segment continued to be a major revenue contributor for the Company, accounting 44% of the total revenue, including trading income. The Company reported an 8% YoY growth in plastic barrel volumes, reflecting steady demand from key industries.

Revenue Mix
By Value
			(in Rs Cr.)
Product Segment	FY 2024-25	FY 2023-24	YoY %
Intermediate Bulk	198	177	12.0%
Containers (IBCs)
Metal Drums	63	47	34.4%
Polymer Drums	258	254	1.5%
By Volume
			(in Rs Cr.)
Product Segment	FY 2024-25	FY 2023-24	YoY%
Intermediate Bulk	2,55,502	2,11,332	20.9%
Containers (IBCs)	Units	Units
Metal Drums	7,427	5,332	39.3%
	MTPA	MTPA
Polymer Drums	20,385	18,934	7.7%
	MTPA	MTPA

Outlook

Looking forward, the Company is optimistic about the future of the High-density polyethylene (HDPE) market in India. Pyramid envisions sustaining its growth trajectory, followed by increasing its revenue two-fold within the next four to five years. The Companys focus on expanding and catering to a diversified customer base not only enhances operational efficiency but also aligns with the growth objectives.

SWOT Analysis

Strengths

• One Stop Provider offering comprehensive bulk industrial packaging solutions

Diversified including Polymer Drums, Intermediate Bulk Containers (IBCs), and MS Drums to serve the needs of multiple industry segments such as chemicals, agrochemicals and pharmaceuticals

• Market Leadership in IBCs, reinforcing a strong competitive edge through a dominant share of the market.

• Modern Manufacturing Units to enhance production capabilities and consistently deliver quality products

Focus on Geographic Diversification beyond Gujarat to widen reach and reduce dependency

Efficient Asset Utilisationwith a fixed asset turnover of over 5.3x, boosting operational performance and profitability

• Established Strong Relationships with long-standing clients, enhancing trust, loyalty and repeat business

Opportunities

• Rising demand for IBCs, driven by a surge in chemical exports from India, creating strong growth potential

• Focus on Backward and Forward Integration to enhance profitability and drive sustainable growth

• Enhancing Production across Polymer Drums, IBCs and MS Drums to tap Rs 900 --1000 Cr, revenue potential in 3-4 years at full utilisation

• Strategic Establishment of Manufacturing Units near key industrial hubs, supported by an in-house logistics fleet to optimize cost efficiencies and ensure timely deliveries

• Driving Sustainable Growth through strategic initiatives such as establishing a plastic recycling plant and a solar plant to reduce annual power costs, driving higher margins while supporting environmental responsibility

Weaknesses

• Susceptibility to Raw Material Price Volatility, particularly in polymers, could adversely impact costs and margins

Threats

• Intense Market Competition from organised and unorganised players, potentially impacting market share and pricing

• Macroeconomic Slowdown could impact industrial activity in core user segments, reducing demand, increasing expenses and impacting revenues

• Geopolitical Uncertainties withheightenedinternational tensions could pose a risk to export operations, disrupt supply chains and hinder market expansion plans

Business Performance

Operational Review

FY25 was a year of strong operational progress for Pyramid Technoplast, marked by double-digit volume growth across all product categories, even as revenues and margins were temporarily impacted by the sharp decline in raw material prices and the lag in price pass-through. IBC volumes surged 44% YoY, MS Drums rose 35% YoY, and HDPE Drums grew 11% YoY, reflecting healthy demand momentum and capacity expansion. Despite these gains, realizations and EBITDA margins were moderated by higher other expenses, including EPR liability and scale-up costs. The Company nevertheless strengthened its foundation for future growth, commissioning new HDPE and IBC lines, completing Phase 1 of the Wada Unit with trial runs, and progressing toward the commissioning of a 5,000 MT recycling plant and a 15.25 MW solar project—both expected to materially reduce raw material and power costs from FY26 onward. With automation driving efficiency in MS Drums and a healthy balance sheet at 0.20x net debt-to-equity, Pyramid is well positioned to deliver 15–20% topline growth and margin expansion in the coming years, creating sustainable value for stakeholders.

Financial Highlights
Financial Results
		(in Rs Cr.)
Particulars	Year ended March 31, 2025	Year ended March 31, 2024
Revenue from Operations	591.34	532.42
Other Income	3.80	4.73
Total Income	595.14	537.16
EBITDA	46.77	48.79
Profit before Tax	36.13	40.10
Profit after Tax	26.67	29.34
Cash Flow from Operations	35.01	(3.81)
Key Financial Ratios
		(in Rs Cr.)
Ratio	Year ended March 31, 2025	Year ended March 31, 2024
EBITDA (%)	7.86%	9.08%
Debt-Equity ratio	0.22x	0.09x
Return on Equity (%)	10.70%	13.21%
Return on	9.46%	12.79%
Capital Employed (%)
Book	Rs 67.78	Rs 60.40
Value per Share (Rs)
Earnings per Share (Rs)	Rs 7.38	Rs 8.49
Interest Service	14.40x	18.15x
Coverage ratio
Current ratio	2.34x	2.59x
Net Profit Margin (%)	4.51%	5.51

Profit and Loss Analysis

Revenue from Operations

Revenues from operations increased to Rs 591.3 Cr. in FY 2024-25 compared to Rs 532.42 Cr. in FY 2023-24, registering 11% growth. Despite dynamic market conditions, the Companys core focus on expanding capacities, enhancing operational efficiency and improving the product mix resulted in continued revenue growth.

EBITDA

The Companys EBITDA stood at Rs 46.8 Cr in FY25 compared to Rs 49 Cr in FY24. The marginal decline was primarily driven by an increase in other expenses, including costs incurred towards Extended Producer Responsibility (EPR) compliance and additional operating expenses relating to the commissioning and ramp-up of the upcoming manufacturing facilities.

Profit Before Tax

The softer EBITDA performance translated into a moderation in PBT, which declined to Rs 36.1 Cr in FY25 versus Rs 40.1 Cr in FY24. In addition to operating cost pressures, depreciation expenses rose by nearly 25% during the year, reflecting the ongoing capital expenditure cycle, including capacity expansions at Unit 7, and investments in automation and sustainability initiatives. These factors, combined with scale-up costs for new lines yet to reach optimal utilization, weighed on profitability in the short term.

STATUTORY REPORTS

Profit after Tax

PAT for FY25 stood at around Rs 26.7 Cr compared to Rs 29.3 Cr in FY24, mirroring the decline in PBT. The reduction was attributable to elevated operating costs, higher depreciation, and one-time EPR charges. However, the Company maintained a healthy net margin profile supported by strong volume growth and disciplined working capital management. With the upcoming commissioning of the recycling plant and solar power facility in FY26, coupled with the ramp-up of new capacities, Pyramid Technoplast expects earnings growth to accelerate, driving both PBT and PAT to stronger trajectories in the coming years.

Risk Management
Key Risk I	Impact	I	Mitigation

Competitive Environment

• The Company operates in a highly competitive sector.

• Intense competition from both domestic and international manufacturers could result in price wars, reduced margins, and lower market share.

• The Company offers an assorted portfolio as a one stop provider for industrial packaging to meet diverse clients needs.

• Maintains strong customer relationships and operational excellence, enabling cost optimization, consistent quality, and competitive pricing versus peers.

Raw Material Cost Fluctuations

• The Companys depends on polymer-based materials for manufacturing.

• Any raw material price volatility could increase costs, impacting revenues and profit margins.

• The Company procures raw material on monthly price contract basis with the ability to pass on costs to the customer.

• Reinforces strong and enduring relationships with both domestic and international distributors and vendors.

• The Company sources certain components from multiple vendors to reduce dependency on a single supplier, mitigating supply chain risk.

• Minimises risk of significant price fluctuations in both raw materials and the final product by ensuring short lead time between raw material procurement and the production of finished products.

Evolving Regulations

• Rising environmental concerns may lead to new environmental regulations coming in force.

• This could lead to stringent controls on the manufacturing processes or the materials used, increasing operational costs or limiting product offerings.

• The Companys manufacturing units are certified under ISO 9001:2015/ ISO 14001:2015/ISO 45001:2018 for quality, environment, health and safety management systems for producing polymer drums, carboys, jerry cans, IBC & MS drums and relevant accessories.

• MS Drums adhere to IS 1783:2014 (Part 1 and 2) quality standards laid down by Bureau of Indian Standards.

• The Company offers recyclable and reusable products, contributing to waste reduction and sustainable packaging practices.

• The Company adheres to all regulatory requirements and is and adaptable to adopt emerging technologies.

• Construction of a recycling plant in Bharuch to recycle 10,000 tons of plastic annually.

• Cost optimization through renewable energy by

Operational Risk

• The Companys manufacturing units are regionally concentrated.

• Any localised disruptions such as natural disasters, political unrest or labour strikes could significantly impact its production capabilities.

• Expanding manufacturing footprint beyond Gujarat.

• Maintains a disciplined and constructive control environment through comprehensive training, standards, and procedures to ensure all employees are aware of their roles and responsibilities.

• The Board actively oversees the monitoring and adherence to risk management policies and procedures, and regularly reviews the adequacy of the risk management framework aligned with Companys risks.

Stringent Quality Controls

• Company has to meet the requisite quality standards.

• Any deviation could lead to product recalls or returns, customer dissatisfaction, reputational damage, and financial losses.

• The Company is committed to delivering superior quality products that adhere to highest quality standards.

• To undertake this, extensive monitoring conducted by an expert team, focussing on procuring high-quality raw materials, and rigorous metallurgical testing before approving production.

• Regular inspections and a comprehensive range of inhouse testings are further conducted, including drop, hydraulic, leakage, melt flow index, rolling, stake load, UV stabilizer, color uniformity, light, printing adhesive, and weight uniformity tests.

• Simultaneously, regular 3rd party testing from approved agencies like Indian Institute of Packaging (IIP) & TUV are undertaken.

• Through these various quality control measures, the Company ensures its products are defect-free, upholding reputation while minimizing product recall or return risks.

Human Resources

The Company considers its employees integral to sustaining success and its innovative edge. As an employee centric entity, it upholds fair and ethical business practices to strengthen trust and integrity. Through various measures focussed on employee development and a culture of continuous improvement, the Company strives to nurture a diverse, inclusive and conducive workplace where employees feel valued and empowered. It leverages the diverse expertise of employees diverse to drive product excellence and customer satisfaction. Simultaneously, it prioritizes employee well-being by offering resources to support their personal and professional growth, driving optimism, sense of belonging, continued engagement and holistic development.

Internal Control Systems

The Company maintains a robust internal audit system, compliant with relevant regulations, which is regularly monitored, updated to safeguard assets and solve issues promptly. The Audit Committee ensures the effectiveness of internal control systems through diligent reviews of internal audit reports, timely corrective action and open communication with both statutory and internal auditors. By promoting integrity, transparency and accountability, the well-structured framework enables the Company to mitigate risks, strengthen trust and protect stakeholder interests.

Cautionary Statement

This statement made in this section describes the Companys objectives, projections, expectations and estimations which may be ‘forward looking statements within the meaning of applicable securities laws and regulations. Forward– looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments