Pyramid Technoplast: Navigating Growth and Green Initiatives in Q2 & H1 FY26

Pyramid Technoplast Limited, a prominent name in industrial packaging, has reported a robust performance for the second quarter and first half of the financial year 2026. The company's strategic focus on capacity expansion and green energy initiatives is clearly shaping its trajectory, even as it navigates the initial ramp-up challenges of new facilities. For Q2 FY26, the company recorded a revenue of 161 crore, marking a significant 21% year-on-year growth. The half-year performance was equally strong, with revenue reaching 325 crore, an increase of 22% compared to the previous year. This growth was predominantly fueled by strong volume expansion across its key product categories.

Segment-wise, the company demonstrated impressive volume growth. Intermediate Bulk Containers (IBCs) saw a remarkable 42% increase in volumes, while High-Density Polyethylene (HDPE) drums and Mild Steel (MS) drums grew by 16% and 14% respectively. This robust volume performance underscores the strong demand for Pyramid Technoplast's polymer-based molded products. However, despite the strong top-line growth, the EBITDA margin for H1 FY26 stood at 8.2%, slightly below the management's full-year guidance of 11-12%. This was primarily attributed to higher fixed costs associated with the ramp-up and initial stabilization phases of newly commissioned plants, including the Wada facility.

Strategic Initiatives Driving Future Efficiency

Pyramid Technoplast is actively pursuing several strategic initiatives aimed at enhancing operational efficiency, reducing costs, and strengthening its sustainability footprint. A significant milestone is the commissioning of its new recycling plant (Unit 9) in Bharuch on October 3rd, 2025. This facility, with an annual recycling capacity of 5,000 MT, is expected to cater to 10-12% of the company's raw material needs. This move is projected to cut raw material costs by 10-12% annually, leading to meaningful savings and margin enhancement, while also reducing reliance on imports. The investment of ₹8-10 crore in this plant is expected to have an attractive payback period of 2-3 years.

Another key initiative is the commissioning of a 6 MW captive solar power plant on October 30th, 2025. This is the first phase of a larger 15.25 MW project. Once the entire capacity is installed, the solar plant is anticipated to save over ₹15 crore in power costs annually, significantly improving operating leverage. The total investment for this project is over ₹60 crore, with an estimated payback period of nearly four years. While there was a slight delay in its full commissioning, management expects to realize approximately ₹3-3.5 crore in savings from this plant in Q3 FY26.

Capacity Expansion and Automation

The company's Wada plant in Maharashtra, which commenced Phase 1 operations in June 2025, is steadily ramping up. The plant's utilization stood at 43% in Q2 FY26 and is targeted to reach 80% by FY27. The IBC and HDPE drum lines at Wada are fully operational, with the MS Drum capacity expected to be commissioned by December 2025. This expansion is crucial for accelerating topline growth and leveraging economies of scale.

Furthermore, Pyramid Technoplast is focusing on advanced automation, particularly in its MS Drum production. The company has achieved 90% automation by replacing manual processes with process control systems in existing and upcoming facilities. This is expected to result in a margin expansion of 800-900 basis points and improved production efficiency through manpower reduction. The company's backward integration efforts, including in-house manufacturing of caps, lids, and handles, also contribute to cost control and quality assurance.

Outlook and Management Commentary

Management has reiterated its guidance for FY26, projecting a revenue of approximately ₹700 crore, with a 15-20% revenue growth and an EBITDA margin of 11-12%. For FY27, the company anticipates a revenue growth of about 15% and a capex outlay between ₹15-20 crore, which will be funded through internal accruals and cash balance. The focus remains on maximizing capacity utilization, with H2 FY26 utilization expected to be between 68% and 70%. The company's diversified customer base, with low dependency on top clients, and a strong credit rating of AAA- from Acuite, provide a stable foundation for future growth.

In conclusion, Pyramid Technoplast Limited is in a transformative phase, strategically investing in capacity expansion, automation, and green energy. While the initial ramp-up of new facilities has led to some margin pressure, the long-term benefits of these initiatives in terms of cost efficiency, sustainability, and enhanced production capabilities are expected to drive significant value. The company is well-positioned to capitalize on the growing demand for industrial packaging solutions, demonstrating a clear path towards sustained growth and improved profitability.