Rajshree Polypack Navigates Q2 FY26 with Strong Exports and Strategic Shifts

Rajshree Polypack Limited, a prominent player in the rigid plastic packaging sector, recently unveiled its standalone financial performance for the second quarter and first half of Fiscal Year 2026. The period reveals a company strategically adapting to evolving market conditions, marked by robust export growth and focused expansion in key product segments, even as it grapples with domestic headwinds.

For H1 FY26, the company reported a turnover of 168.94 crores, a modest increase of 1.17% compared to the previous year. The second quarter alone saw revenues reach 86.43 crores. Operating EBITDA for H1 FY26 stood at 24.96 crores with margins of 14.78%, while Q2 recorded an EBITDA of 12.89 crores at a 14.91% margin. Profit After Tax (PAT) for H1 FY26 was 8.71 crores, and for Q2 FY26, it was 4.61 crores. These figures reflect a period of steady, albeit softer, performance, influenced by a mix of internal strategies and external market factors.

Segmental Performance and Market Dynamics

The company's performance during Q2 FY26 showcased a clear divergence between its domestic and international operations. Exports emerged as a significant growth driver, experiencing a sharp increase of 79.66% in H1 FY26 and more than doubling in Q2 FY26. This strong international demand, particularly for Injection Moulding products, underscores the company's expanding global footprint and competitive edge in overseas markets. Management highlighted active expansion into new regions to mitigate market concentration risks, especially in light of tariff challenges in the US.

Conversely, the domestic market faced a slight decline in turnover. This was primarily attributed to lower raw material prices, which impacted revenue realization, and a reduced off-take from some large institutional customers. The latter was linked to an early and extended monsoon season, affecting demand in certain segments. Product-wise, Injection Moulding was the star performer, with revenues growing by 176% in Q2 FY26 to 18.58 crores. Thermoformed packaging remained stable at around 45.84 crores, while sheet sales were 21.10 crores.

Strategic Initiatives and Joint Venture Progress

Rajshree Polypack has been proactive in its strategic initiatives, focusing on capacity expansion, product innovation, and sustainable solutions. The company increased its Thermoforming capacity to 12,120 MTPA and added 1,500 MTPA to its Injection Moulding capacity, bringing the total to 4800 MTPA. This expansion, particularly in Injection Moulding, is a direct response to the burgeoning export demand. Commercial production also commenced at Unit 3 in Daman, which is currently in its ramp-up phase, poised to contribute to future revenues.

A significant part of the company's future growth strategy lies in its joint venture, Olive Ecopak, focused on eco-friendly paper-based tableware and packaging. Olive Ecopak boasts an installed capacity of 27,000 MTPA for paper coating and 15,000 MTPA for packaging products. While the initial market traction has been slower than anticipated, especially in the US due to tariffs, management remains optimistic. They expect Olive Ecopak to reach 50% capacity utilization by February-March 2026 and target 140-150 crores in revenue for FY27, with full capacity utilization by FY27-28 and EBITDA margins of 15-16%.

Financial Summary (Standalone - Q2 FY26)

Outlook and Management Commentary

Management has provided a revised revenue guidance for FY26, now targeting approximately 350 crores, a slight adjustment from the earlier 365 crores. For the upcoming quarters, they anticipate 80-83 crores in Q3 and 95-98 crores in Q4. The overall EBITDA margin for FY26 is projected to be around 16% with additional revenue. The company's commitment to sustainable packaging solutions, including biodegradable plastics and recyclable mono-materials, positions it well for future environmental regulations and consumer preferences.

Rajshree Polypack's leadership also emphasized a disciplined approach to capital allocation, intending to fund future capex, such as the Odisha plant (estimated at 25-35 crores for the initial phase), through internal accruals to avoid increasing debt over the next two years. This prudent financial management, coupled with a focus on innovation and market diversification, underpins the company's strategy for sustained growth.

In conclusion, Rajshree Polypack Limited is demonstrating strategic clarity and disciplined execution in a challenging environment. While domestic market dynamics and initial JV traction present hurdles, the strong performance in exports and Injection Moulding, combined with a clear roadmap for capacity expansion and sustainable solutions, positions the company for long-term value creation. The management's proactive approach to market shifts and commitment to financial prudence instills confidence in its future trajectory.