Huhtamaki India: Q3 CY25 Shines with Margin Growth Amidst Volume Challenges

Huhtamaki India Limited, a prominent player in the flexible packaging industry, has reported a robust financial performance for the third quarter of Calendar Year 2025 (Q3 CY25). Despite facing headwinds in sales volumes, the company demonstrated exceptional growth in profitability, driven by strategic operational efficiencies and a favorable product mix. This quarter's results underscore the company's disciplined approach to business and its commitment to sustainable growth.

The company's net sales for Q3 CY25 stood at INR 604.93 crore, marking a 4.7% decline compared to INR 634.67 crore in Q3 CY24. For the nine-month period ended September 2025, revenue totaled INR 1789.91 crore, down 3.2% from INR 1849.30 crore in the same period last year. However, the narrative shifts dramatically when examining profitability. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged by an impressive 107.1% year-on-year to INR 64.87 crore in Q3 CY25, with the EBITDA margin expanding to 10.7% from 4.9% in Q3 CY24. Similarly, Profit Before Tax (PBT), excluding exceptional items, skyrocketed by 243.4% to INR 49.17 crore. This strong performance translated into a significant increase in Earnings Per Share (EPS), which rose by 234.7% to INR 4.87 (excluding exceptional items).

Operational Excellence and Strategic Product Mix

The remarkable improvement in margins, despite lower volumes, is a testament to Huhtamaki India's relentless focus on operational efficiencies and a refined product strategy. Management highlighted that the company has made conscious decisions to optimize its product and customer mix, prioritizing profitable growth over chasing low-margin volumes. This strategic shift has allowed them to enhance gross margins and improve overall profitability. The company's long-term efforts in implementing world-class operations, coupled with global expertise, have resulted in tangible improvements across its sites, including better efficiency, reduced costs, and tighter control over overheads. These are not merely temporary gains but structural changes designed to sustain improved performance.

Financial Summary (INR Crore)

*Excluding exceptional item

Sustainability and Innovation at the Core

Huhtamaki India is not only focused on financial performance but also on its sustainability agenda. The company reported an 'incident-free quarter' in terms of safety, a significant operational milestone. Environmental initiatives are also gaining traction, with several Indian sites achieving Zero Liquid Discharge (ZLD) status, effectively eliminating liquid waste through on-site treatment and reuse. Efforts are underway to expand renewable electricity generation at three sites, and the company is progressing with its SBTi 1.5°C-aligned climate target submission. Product innovation is heavily geared towards sustainability, with new developments in 'blueloop' recyclable products and paper-based solutions, particularly for high-barrier applications in the personal care sector. These initiatives, while sometimes incurring higher initial costs, are seen as crucial investments for future growth and market relevance.

Outlook and Leadership Transition

Looking ahead, management expressed optimism about future volume growth, expecting it to align with industry and market trends. Positive consumer behavior, such as upgrading to premium products and sustained consumption, is anticipated to benefit the company. The company aims to continue its trajectory of double-digit EBITDA, a level achieved after several years. However, a notable development is the upcoming departure of Mr. Jagdish Agarwal, the Executive Director and CFO, towards the end of November 2025. While this marks a transition in leadership, the company remains confident in its future, supported by a dynamic leadership team and a strong talent pool.

Overall, Huhtamaki India's Q3 CY25 results reflect a company that is strategically repositioning itself for sustainable and profitable growth. By prioritizing efficiency, optimizing its product mix, and embedding sustainability into its core operations, the company is building a resilient foundation to navigate market challenges and capitalize on emerging opportunities.