Rajshree Polypack - The food packaging specialist

[Ankit_Bahuguna]

Any information on Rajshree? All of sudden 20% spike in share price today.

[maulik_dadhania]

I have read the AGM doc and they have mention big clients in list. Are those genuine and still serving those clients? They have mention that they have added 10-11 clients in last years. Anyone knows those names?

[Suyog_Patil]

Any idea when the stock will be available on nse or bse without lots ? I don’t have big enough portfolio to buy 5% that into rajshree… done with my study waiting for that lot restriction to go away I think market cap is also now sizable to move from sme to small cap?
@sahil_vi @Tar

[humbleInvestor]

The last date for declaring Q2 results is nov 15th ( correct me if I am wrong here ).
Does RPL need to adhere to this rule ( since it is not part of the NSE main board ) ?

[Raj_A_A]

Last Sep 2020 results were announced on Nov 11, 2020. Till date there is no announcement on the convening of the meeting for considering Half yearly results.

[sahil_vi]

[vivek423]

Meeting RPPL management soon. Any particular aspects of the business to be clarified?

[Tar]

I would ask them about

1. NSE Main Listing Date
2. Updates on production from new factory + utilisation
3. New client addition details
4. Impact of Raw Material prices on margins
5. Volume/order traction since India is open now and we just went through the Diwali season (containers and other consumer packaging being their main product)

[sahil_vi]

Just to add:

1. Packaging products are generally bulky & require significant transportation costs. Has the shipping disruptions hit us, or our margins in H1FY21? What is the outlook for rest of the year.
2. How do we plan to do exports since packaging products are bulky & transportation could significantly add to cost to end consumer.
3. How is the development & commercialisation of value added products (such a barrier packaging) progressing? When can we expect significant contribution to our P&L statements to start reflecting?

@value_beast

For the packaging industry to grow at this rate, shouldn’t the end-user industries, in turn, need to grow at similar rates?

When we refer to packaging industry, what we care about is rigid plastic packaging industry. For this industry, growth is likely to be quite good because of a few different factors:

1. Change in packaging from cardboard/metal to plastic. plastic packaging has low market share.
2. Move from unorganized & smaller players to organized, efficient, hygenic, higher quality, larger players. This industry is also very fragmented & the efficient would increase their market share.

Here is a snapshot from moldtek which is somewhat into similar industry (though they do not compete with rajshree on same set of products due to different tech & applicability of products):

@moldtek q2fy22 concall

Unknown Attendee

My question is 2 questions here. One, can you share some development on the business potential, which you are working on from the take-away restaurants food packaging? How is it shaping up? And how we see the potential in that particular thing because that’s growing pretty quick?

And the second one is your new venture, which is the packaging for pharmaceutical industry and cosmetic, if you could give us a little more details about how your discussions are progressing and how you see the opportunity in that, one is domestic and in terms of if there is a potential driven – do exports packaging for those kind of products?

Lakshmana Janumahanti

Coming to your first question, the Food & FMCG, but for the COVID period, the growth of revenue is still better because whatever has impacted has impacted ice creams and cheese and butter and chocolates and that kind of consumables were very badly affected last year and partially affected this year.

And going forward, I hope all this will be our past and there won’t be an impact of COVID on day-to-day life. Then the Food & FMCG sector will boom again, and numbers can go up. I mean I’m talking about our absolute numbers of food sales can grow at least 25% to 30% in the next 3, 4 years.

And the size of the industry, if you ask me, it’s very difficult to predict because none of the – I would say, hardly 5%, 10% of the industry has shifted towards IML containers. And that itself for us, it is INR 120 crores turnover last year. Probably another INR 100 crores must have been met by another 5, 6 players who are there in the small container business in the country.

So this is hardly a INR 250 crores business as of today but the potential, in my opinion, can be a few thousand crores, like INR 3,000 crores to INR 5,000 crores, if everybody start adopting more hygienic and self-decorative packaging products for Food & FMCG.

You take spices, you take [indiscernible], you take products, you care of mass consumption, are still coming in labeled and manually produced containers, manually decorated containers. But there will be a day when most of these companies who are – whoever is and whatever way related to food have to use IML containers because they’re made hands free, and the decoration is also hands free. And the product is completely compliant to FSSC 22000 standards, which are not really implemented in India.

So going forward, for those implementation becomes stringent, more and more companies have to shift to IML the food containers, whatever they sell in the supermarket has to happen – 90% of them in the food side have to be in IML containers.

So the scope is very high, but incidents like COVID have reduced the progress and they have extensive use of IML. But otherwise, the fortune side of COVID is it is driving people towards more hygienic and more [indiscernible] friendly products because in IML, the sticker is also polypropylene. So you will be able to grind the containers altogether.

Whereas a container with a paper label or sticker will be contaminating the grounded materials. So world over, the IML has been preferred for most of the Food & FMCG products because of that concern. In India also that concern is slowly improving.

So going forward, that’s why I’m very bullish about growth in Food & FMCG sector for our container

Do bear in mind that moldtek focusses on IML technology & so they talk about that part of rigid packaging industry. But i think very similar factors are playing out for rajshree as well.

Disc: invested, biased.

[Suyog_Patil]

Can you please share the concall transcript of mold-tek for this quarter?
I haven’t found it anywhere

[vivek423]

Management Q&A - Mr. Ramswaroop Thard

-Target of INR 500 cr topline by 2025 with 16-17% EBITDA margins
-Getting lot of export enquiries in last 6 months. Freight rate jump is beneficial for us - we are close than China to Middle east, Europe and east coast US therefore more cost competitive
-Injection moulding vs thermoforming - density and weight of the product matters. Amul uses us for curd container and moldtek for shrikhand container which is denser and has added weight due to sugar
-Next plant will not be in Daman. Will diversify geographically
-NSE listing in November
-Can grow upto 500 cr through internal accruals + some minor debt
-Barrier packaging is ready for commercialization. Custom built machine from SML Austria. First such machine in India. Additional delay in go live as we wanter to do barrier packaging for tubes as well.
-Not decided on further capital allocation yet. Could continue to invest in thermoforming. Might get into injection moulding to increase wallet share of existing customers. Will decide and announce by Jan 2022
-Have got CPCB certification to manufacture biodegradable packaging from polylactic acid (corn fermentation byproduct). 2.5x more expensive that normal packaging. Dont expect it to grow much in next few years. Niche market even in USA
-Pharma - we are still evaluating and planning. See lot of opportunity as PVDC blisters are phased out. Expect to add pharma customers in 1-2 years
-Wifag we only buy printing machines from but they are strategic investor. Guide us on market trends and evolution of technology.

[Mukul_Singhal]

@vivek423

NSE

Any tentative dates for this ?

[kalpesh4430]

@vivek423

Target of INR 500 cr topline by 2025 with 16-17% EBITDA margins

That’s eye popping target.

Need to find out,

1. Managements track record for right capital allocation
2. Managements execution capabilities
3. Are they disruptor? without that such a huge growth not possible

Disc: Not invested, in watchlist

[shivammitra]

Good top line growth. Looks like increase in price of raw materials has impacted the bottomline. EBIDTA margin is around 12%

[attaluri]

I am still learning .Please don’t mind to help me on my query. Does anyone guestimate (please write down or point to triggers …why it will match/beat) by when RPPL can match present pat margins of moldtek packaging without compromising growth?

[Ashutosh_Sancheti]

Hi,

I have attached the snap of one of foils in the H1FY20 Investor presentation of RPPL which states the projected growth of the Rigid Packaging in India.
As per this the growth is pegged at 10-11% CAGR. So I am skeptical of the 20-25% CAGR number.

IP_FY20_H1.pdf (2.6 MB)

Disclosure: Not invested, tracking

[shivammitra]

[shivammitra]

Investor presentation for H1FY22

RPPL_19112021134857_IPH1FY22RPPL.pdf

[gurjota]

A much anticipated and awaited event of NSE main board migration for this company is finally here.

RPPL_25112021130046_ApprovallettertoMainBoardRPPL.pdf

Disc: Top portfolio holding

[vardhmanchhajed]

Excellent news. This is a fundamentally sound company, in my view, with a lot of retail participation awaiting this listing given the lot size reduction. Lets see if this leads to some value unlocking here!