GRP Q1 FY27: Growth Returns, Margins Improve, and Pyrova Moves Closer to Scale

GRP Limited opened FY27 with a sharp improvement in operating performance, helped by higher volumes, better realisations, and a rising contribution from newer businesses. For Q1 FY27, consolidated total income increased to INR 1,573 million, up 26% year-on-year. EBITDA rose to INR 174 million, up 60%, and profit after tax increased to INR 42 million, up 140%.

What made the quarter notable was the margin outcome despite cost pressure. Gross margins declined to 48.3% from 50.1%, largely due to higher raw material costs. But EBITDA margins expanded to 11.0% from 8.7% as operating leverage and cost discipline offset the gross margin squeeze.

Segment performance: Rubber Recycling leads the quarter

GRP has changed the way it presents its operating structure as integration across the end-of-life tyre value chain deepens. It now reports two segments: Rubber Recycling (Reclaim Rubber, Custom Die Forms, and Pyrova Energy) and Others (Engineering Plastics, windmill operations, and residual polymer composite).

On a standalone basis and excluding other income, Rubber Recycling contributed INR 1,437 million in Q1 FY27, up 34% over Q1 FY26, while the Others segment was broadly stable at INR 119 million. Rubber Recycling represented 92% of standalone revenue for the quarter.

Within Rubber Recycling, management highlighted a 12% year-on-year increase in reclaim rubber volumes, supported by a 20% rise in export volumes as customer order patterns normalised following the removal of US tariffs. Domestic demand also remained healthy.

The quarter’s geographic mix was evenly balanced. Standalone domestic revenue was INR 765 million and exports were INR 791 million in Q1 FY27, translating into a 49% domestic and 51% export split.

Pyrova Energy: from stabilisation to the next milestone

The company’s long-term growth narrative increasingly rests on scaling beyond reclaim rubber into crumb rubber, tyre pyrolysis oil, and recovered Carbon Black (rCB) through its Pyrova Energy platform.

Management said cumulative capital expenditure under Pyrova Energy reached around INR 91 crore as of 30 June 2026. In the concall, they described a key operating milestone for continuous pyrolysis: achieving a 25-day run in a month with a four-day shutdown window, which they said was achieved in July 2026. This matters because stable continuous operation is a prerequisite for predictable throughput, reliability, and commercial performance.

The next phase is rCB. The investor presentation describes Phase 2 as under commissioning through February 2027, including setting up an rCB facility at Solapur and expanding pyrolysis capacity to 45 KTPA. In the concall, management indicated rCB commissioning is expected by October 2026, followed by a period of stabilisation and trials. They expect rCB to start contributing meaningfully by Q4 FY27, with FY28 more likely to be the year when the business reaches maturity, subject to customer approvals and utilisation levels.

Plastics and Others: stable revenues, better quality

The Others segment was stable year-on-year, but management emphasised improving quality of earnings. Engineering Plastics recorded 27% year-on-year volume growth, supported by automotive demand and some translation of approvals in the appliance sector into commercial volumes.

Repurposed Polyolefins, operated largely through a subsidiary, showed a turnaround in profitability. Management attributed this to better realisations, disciplined cost management, and a more selective approach to product and customer mix.

They also pointed to regulatory tailwinds. Plastic EPR norms are becoming tighter and brand owners are increasingly focused on implementation. At the same time, management acknowledged that on-ground challenges such as waste collection and building dependable supply chains remain material and require sustained effort.

Capital allocation, balance sheet, and working capital

GRP highlighted improved working capital discipline, with the working capital cycle improving by 8 days to 86 days as of 30 June.

For FY27, management guided for targeted capex of INR 90 to 100 crore, with the bulk directed toward adding two more pyrolysis lines to reach 45 KTPA, commissioning the rCB plant, and debottlenecking reclaim rubber operations. For FY28 capex, management said it is premature to quantify and would be decided in the second half of FY27, while reiterating commitment to an overall investment plan of INR 250 crore set around 18 months ago.

The consolidated balance sheet indicates higher borrowings at March 2026 versus March 2025, and the historical ratio table shows a decline in FY26 interest coverage and return ratios compared to FY25. Management said deleveraging timing will depend on opportunity, and that improving cash flow generation from newer businesses should provide more flexibility over time.

What to watch from here

GRP’s Q1 FY27 performance strengthens the case that the company is translating recent investments into operating momentum. The key question for the rest of FY27 is not just whether growth continues, but whether the margin trajectory remains durable as raw material inflation and logistics dynamics evolve.

Management has provided an outlook on volumes and the direction of margin movement, especially as Pyrova Energy scales and rCB moves toward commercialisation. The timelines remain linked to commissioning execution and, importantly, customer approvals.

If the company continues to execute on operational stability and rCB commissioning while maintaining discipline in costs and working capital, FY27 could mark a clearer inflection point in the shift from a reclaim rubber-led business to a broader integrated recycling platform.