TCPL Packaging navigates global challenges with strong domestic growth, Optimistic on export recovery and Rs. 100 crore capex in focus

TCPL Packaging navigates global challenges with strong domestic growth, Optimistic on export recovery and Rs. 100 crore capex in focus

The Pulp and Paper Times

Mumbai, June 2026: TCPL Packaging Limited reported a resilient performance for FY26 despite facing a challenging global business environment marked by subdued international demand, trade volatility, rising raw material costs, and geopolitical disruptions in the Middle East. Speaking during the company's Q4 and FY26 Earnings Conference Call held on June 3, 2026, Executive Director Akshay Kanoria highlighted that strong domestic demand, operational efficiencies, and strategic investments helped the company navigate a difficult year while laying the foundation for future growth.

The packaging industry witnessed multiple headwinds throughout FY26, including weak global demand conditions and supply chain disruptions arising from geopolitical tensions, particularly in the Middle East during the fourth quarter. Despite these challenges, TCPL's domestic business remained strong, delivering volume growth ahead of underlying consumer market trends in India.

According to Kanoria, stable domestic consumption across key product categories helped offset softness in export markets. While exports were impacted during the final quarter due to disruptions in shipping routes and logistics challenges in the Middle East, the company continued expanding its presence in several international markets and strengthening relationships with global customers.

Revenue Growth Despite Challenging Conditions

TCPL Packaging reported consolidated total income of INR 465 crore for Q4 FY26, representing a growth of more than 9% year-on-year. For the full financial year, consolidated revenues reached approximately INR 1,836 crore, reflecting a 3% year-on-year increase despite difficult market conditions.

Management emphasized that the company remains focused on calibrated pricing strategies, product mix enhancement, and operational efficiencies to support margin improvement in the coming quarters.

The company continues to maintain a strong balance sheet while pursuing disciplined capital allocation and investments in strategic growth areas. Management believes these initiatives will support long-term value creation for shareholders while strengthening TCPL's competitive position across packaging segments.

Flexible Packaging Business Continues to Perform Strongly

One of the key highlights of FY26 was the strong performance of TCPL's flexible packaging business. The segment operated at healthy capacity utilization levels throughout the year, with the most recently commercialized production line achieving optimum operating levels.

The robust utilization demonstrates healthy demand across flexible packaging applications and validates the company's investments in expanding its capabilities in this segment.

Kanoria noted that the flexible packaging division remains one of the company's key growth drivers, and further investments are planned in FY27 to support growing customer requirements.

Chennai Greenfield Facility Gains Momentum

TCPL's paperboard packaging business also showed encouraging progress during the year. The company's greenfield carton packaging facility in Chennai continued to scale up steadily, supported by increasing customer acceptance and approvals.

Providing an update on capacity utilization, Kanoria revealed that the Chennai facility is now operating at more than 50% utilization, with a positive outlook for further growth.
"We have a lot of customer approvals that have just come through and are expecting a good ramp-up now," he stated.

The gradual improvement in utilization levels indicates growing market acceptance and positions the facility for stronger contributions in the coming years.

The Noida operation also delivered improved performance during FY26 and management expects further progress in the coming quarters.

Gravure Cylinder Facility Strengthens Integration

Another important milestone during the year was the successful ramp-up of the newly commissioned gravure cylinder facility at Silvassa.

The facility is strengthening backward integration capabilities, improving operating efficiencies, and enabling faster turnaround times for customer requirements.

Backward integration has become increasingly important in today's competitive packaging market, allowing manufacturers to improve cost control, enhance quality consistency, and reduce dependence on external suppliers.

Management believes the Silvassa facility will contribute positively to operational performance while enhancing customer service capabilities.

Sustainability Efforts Receive Global Recognition

TCPL Packaging also achieved significant milestones on the sustainability front during FY26.

The company was awarded the EcoVadis Bronze Medal in its first sustainability assessment, placing TCPL among the top 35% of companies assessed globally.

Additionally, TCPL formally became a participant in the United Nations Global Compact, reinforcing its commitment to responsible business practices, ethical operations, environmental stewardship, and sustainable growth.

These achievements reflect the company's growing focus on Environmental, Social, and Governance (ESG) initiatives, which are becoming increasingly important for global customers and investors.

Export Business Faces Temporary Disruptions

Exports remained one of the most discussed topics during the conference call, given the ongoing geopolitical tensions affecting global trade routes.

Kanoria described FY26 as a year in which the company encountered "one thing after another" in terms of external disruptions. The Middle East crisis significantly impacted shipping routes and export operations, particularly during the fourth quarter.

However, he noted that conditions have shown some improvement following ceasefire developments.

"Post the ceasefire, things have improved with some more vessels sailing and a little bit of improvement. But the situation is highly uncertain and very difficult to have any outlook as such," he said.

Despite near-term uncertainty, management remains optimistic about export recovery once geopolitical conditions stabilize.

According to Kanoria, if trade routes normalize, the rebound in export business could be relatively quick.

Expanding Presence Across Global Markets

While Middle East disruptions impacted shipments, TCPL has been actively diversifying its export footprint.

Management stated that extensive groundwork undertaken over the last several years is now beginning to generate tangible benefits.

The company has onboarded several new international customers and is further strengthening its export team to accelerate growth opportunities.

"We are quite bullish on several new geographies and we have entered into several new customers. Overall, we are quite positive and we feel that long-term exports should grow," Kanoria said.

However, he acknowledged that geopolitical events remain difficult to predict and continue to pose challenges for business planning.

Domestic Demand Remains Broad-Based

Unlike export markets, domestic demand conditions remained relatively stable throughout FY26.

According to management, demand strength was broad-based rather than concentrated in specific industries or product categories.

Kanoria noted that customer performance varied significantly, making it difficult to generalize trends across sectors.

One emerging challenge has been the growing unpredictability of seasonal consumption patterns due to climate change.

"There has been a lot of problem in the last few years with seasonal products because the seasons are very difficult to understand nowadays," he said.

Unseasonal rainfall, extreme heat waves, and shifting weather patterns have complicated demand forecasting for seasonal products.

Despite these challenges, general-purpose consumer categories continue to perform well, supporting stable domestic packaging demand.

Margin Management Amid Rising Costs

Raw material inflation remains a key concern for the packaging industry.

Management indicated that TCPL continues passing through cost increases wherever possible. However, continuous and incremental increases in raw material costs create challenges when negotiating pricing adjustments with customers.

Kanoria explained that sudden large price increases are often easier to manage than a series of smaller, recurring cost escalations.

The company currently does not face significant pressure on margins because it has been able to implement pricing adjustments as costs rise.

However, management cautioned that prolonged inflationary pressure and extended geopolitical disruptions could make future price pass-throughs more difficult.

"As long as it stops here, I think we will be fine," Kanoria remarked.

Paper Prices Continue to Rise

One of the major concerns highlighted during the conference call was the continued increase in paper and paperboard prices.

According to management, pricing pressure has not eased and continues to affect both virgin board and recycled board grades.

Kanoria pointed out that virgin board prices have witnessed particularly sharp increases, while recycled board prices continue to experience a steady stream of incremental hikes.

This gradual increase creates greater challenges for packaging companies because customer negotiations often lag behind rising input costs.

By the time one round of price increases is implemented, another increase often emerges, creating ongoing pressure on profitability.

"We are seeing further increases on the anvil, but these things are completely dependent on the global scenario which can change at any moment," he said.

MIP Supports Domestic Paper Industry

Addressing questions regarding the Minimum Import Price (MIP) mechanism for paperboard, Kanoria clarified that it should not be confused with anti-dumping duties.

The MIP currently provides domestic paper manufacturers with some protection against lower-priced imports and offers limited pricing flexibility.

However, the measure is expected to expire in the near future, and uncertainty remains regarding whether it will be renewed.

Despite the support provided by the MIP, Kanoria emphasized that domestic paper mills themselves continue to face substantial cost pressures.

As a result, further paper price increases may remain unavoidable regardless of future policy decisions.

Calibrated Capex Planned for FY27

Looking ahead, TCPL Packaging plans to maintain a disciplined approach to capital expenditure in FY27.

The company expects to invest approximately INR 100 crore, broadly in line with FY26 spending levels.

Most of the planned investments will be directed toward the flexible packaging business, where capacity utilization remains strong and growth opportunities are attractive.

In contrast, carton packaging operations still have meaningful room for expansion within existing capacities.

Management estimates there remains significant double-digit growth potential before major capacity additions become necessary.

Rather than undertaking large-scale expansions immediately, TCPL plans to enhance factory infrastructure, expand building areas, and prepare facilities for future growth as demand strengthens.

"We are being a little calibrated in our capex this year considering all the headwinds and uncertainty," Kanoria explained.

Positive Long-Term Outlook

Despite geopolitical uncertainties, volatile raw material prices, and ongoing trade disruptions, TCPL Packaging remains optimistic about its long-term growth prospects.

The company believes its strong innovation capabilities, diversified customer base, expanding international footprint, and continued investments in manufacturing capabilities position it well for future growth.

With domestic demand remaining healthy, export markets expected to recover as global conditions stabilize, and sustainability initiatives gaining momentum, management sees significant opportunities across both packaging and international markets.

As FY27 begins, TCPL Packaging is focused on expanding its market presence, broadening its product portfolio, strengthening customer partnerships, and delivering differentiated value-added packaging solutions. Supported by a strong balance sheet and prudent capital allocation strategy, the company believes it is well placed to generate sustainable growth and long-term value for stakeholders in the years ahead.
 

Published at : Jul 06, 2026 06:21 AM (IST)

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