TCPL Packaging Sees Strong Domestic Demand, Expands Flexible Packaging Capacity; Pan Masala Impact Marginal

TCPL Packaging Sees Strong Domestic Demand, Expands Flexible Packaging Capacity; Pan Masala Impact Marginal

TCPL Packaging Reports Strong Q1 FY27 Growth, Sees Robust Packaging Demand and Expands Flexible Packaging Capacity

Summary:
TCPL Packaging Ltd. began FY27 on a strong footing, reporting broad-based and profitable growth in Q1 FY27, supported by healthy domestic demand across Folding Cartons and Flexible Packaging. Consolidated total income rose 16% year-on-year to INR 495 crore, while EBITDA increased 17% to INR 88 crore. The company said domestic packaging demand is recovering, driven by consumption-led growth, premiumization, sustainable packaging requirements and increasing outsourcing by branded customers. With its Flexible Packaging facility operating at optimal utilization, TCPL has initiated the addition of a high-speed manufacturing line to support the next phase of growth. The company is also preparing additional manufacturing space for future capacity expansion in its Folding Cartons business and sees further opportunities in both domestic and international markets.

The Pulp and Paper Times

TCPL Packaging has commenced FY27 with strong operating and financial performance, supported by healthy demand across its key packaging businesses and continued improvement in operational efficiency.

Speaking during the Q1 FY27 Earnings Call, Mr. Akshay Kanoria, Executive Director, TCPL Packaging, said the company delivered a record quarterly performance during the first quarter, with strong demand, particularly in the domestic market, driving growth across both its Folding Cartons and Flexible Packaging businesses.

Consolidated total income increased 16% year-on-year to INR 495 crore, while EBITDA grew 17% to INR 88 crore, with EBITDA margins improving to 18%. Cash profit increased 56% year-on-year to INR 76 crore, while PAT grew nearly 79% year-on-year to INR 40 crore.

According to the company, the performance reflects a combination of stronger demand, volume growth, improved margins, disciplined execution and continued investments in capacity, technology and value-added packaging solutions.

Domestic Demand Remains a Key Growth Driver

TCPL said the domestic market has shown a noticeable improvement in demand, with customer volumes also recording healthy growth. The company is seeing broad-based growth across its businesses, with volume growth contributing more significantly than value growth.

Mr. Kanoria said that while there is a mix of volume and value growth, volume growth has been stronger, particularly in the domestic business. He noted that overall demand in India has improved and that the company is seeing this recovery reflected across its numbers.

The Flexible Packaging business has grown particularly strongly and is currently expanding faster than some of the other businesses. This strong demand has also supported the company's decision to undertake additional capital expenditure in the segment.

TCPL expects the positive domestic demand environment to remain an important driver of growth, although the company continues to monitor global geopolitical and economic uncertainties.

Flexible Packaging Capacity Expansion Underway

One of the key developments during the quarter was the strong performance of TCPL's Flexible Packaging business. The company's existing facility is now operating at optimal utilization, supported by strong customer demand.

To cater to the next phase of growth, TCPL has initiated the addition of a high-speed manufacturing line at the facility. The expansion is intended to provide additional capacity to meet growing customer requirements, increase the contribution of value-added products and enable the company to pursue new opportunities in both domestic and export markets.

The company said its packaging business will remain the principal focus of its investment programme. It intends to continue investing in capacity, technology, automation and product innovation to strengthen its competitive position.

Folding Cartons Have Further Capacity Headroom

The company also indicated that its Folding Cartons business currently has additional capacity headroom, although utilization differs from one manufacturing facility to another.

Mr. Kanoria said overall Folding Cartons capacity utilization is currently above 70%, while some individual plants are operating at higher or lower levels depending on their location and customer requirements.

TCPL is concentrating on expanding the available space at a couple of its factories to accommodate future capital expenditure. At some other plants, the company already has developed areas and spare capacity that can be utilized as demand increases.

The company expects this approach to provide flexibility to respond quickly to new orders. For instance, where demand increases in markets such as Chennai, TCPL can add capacity relatively quickly, potentially within around a quarter to one-and-a-half quarters.

The company therefore sees capacity expansion as a phased and demand-driven process, with further decisions expected as market conditions develop. TCPL is also preparing additional manufacturing space for capex from next year onwards.

Packaging Market Supported by Structural Growth Drivers

TCPL remains optimistic about the long-term demand outlook for packaging. According to the company, several structural factors are supporting industry growth, including consumption-led growth, increasing premiumization, rising demand for sustainable packaging and continued outsourcing by branded customers.

The company believes these factors provide favorable long-term tailwinds for the packaging industry.

TCPL's diversified customer portfolio, manufacturing capabilities and balance sheet position are expected to support further profitable growth. The company intends to deepen its relationships with existing customers, broaden its product portfolio, expand its international presence and strengthen its position across both paperboard and flexible packaging.

Pan Masala Packaging Impact Remains Marginal

On the recent notification concerning plastic packaging for pan masala and gutka, TCPL Packaging said the development is not entirely new, as plastics were already restricted for pan masala packaging. According to Mr. Akshay Kanoria, This latest notification is misleading and it is more to do with some other structural change in the pan masala packaging. He indicated that the impact on TCPL’s core business is expected to be marginal and limited to the very short term, as the company is not a major supplier to the pan masala segment. Therefore, TCPL does not expect the development to materially affect its overall packaging business or growth outlook.

Sustainable Packaging Creates Long-Term Opportunity

Sustainable packaging is also emerging as an important area of future growth. Discussing the adoption of recyclable packaging by FMCG companies, Mr. Kanoria said that sustainability targets had faced delays following the disruption caused by COVID-19, inflationary pressures and subsequent pressure on business growth and margins.

However, he emphasized that the long-term requirement for recyclable packaging remains intact, with more markets globally introducing regulations and recyclability standards.
These developments are expected to support demand for mono-material and fully recyclable packaging.

While the adoption of sustainable packaging has not progressed as quickly as initially expected, TCPL considers it a long-term opportunity. The company has been developing high-value, fully recyclable packaging solutions and is already supplying these products to export markets.

TCPL said the international market for such solutions is developing across various geographies. The company believes this experience will position it strongly when similar requirements gain greater momentum in India.

Export Market Offers Further Expansion Potential

TCPL's export business also recorded steady year-on-year growth during the quarter. However, the company remains cautious regarding the near-term global environment because of continuing geopolitical and economic uncertainties.

At the same time, the company sees positive developments in international sourcing, particularly from Europe and the UK, where customers are increasingly showing interest in sourcing products from India.

Mr. Kanoria said the Free Trade Agreements with the UK and other markets could support competitiveness, particularly in Flexible Packaging, where reductions in duties can make Indian suppliers more competitive against sourcing destinations such as Vietnam and Turkey.

Beyond the direct tariff benefit, TCPL believes FTAs are contributing to a positive sentiment towards sourcing from India. This could create additional opportunities for the company's export business.

The company therefore sees good scope for further expansion in its export segment, particularly as international customers continue to diversify their sourcing and look towards India.

Packaging Remains Core Investment Focus

TCPL reiterated that packaging remains the company's core business and the principal focus of its investments. The company plans to continue strengthening its packaging operations through investments in capacity expansion, technology, automation and product innovation.

The company is also pursuing the battery materials initiative as an additional long-term growth platform, but it emphasized that this initiative complements rather than changes its focus on expanding and strengthening the packaging business.

With strong customer relationships, diversified markets, expanding capacity and a growing portfolio of value-added solutions, TCPL expects to remain positioned to capture the opportunities arising from the continued growth of the packaging market.

Outlook

TCPL Packaging's Q1 FY27 performance indicates a positive start to the new financial year, with domestic demand emerging as a key growth driver and Flexible Packaging showing particularly strong momentum.

The company's existing Flexible Packaging facility has reached optimal utilization, prompting investment in a new high-speed manufacturing line, while preparations are underway to create additional capacity for future Folding Cartons expansion.

With packaging demand supported by consumption growth, premiumization, sustainability requirements and outsourcing trends, TCPL expects significant opportunities to deepen its presence in existing markets, develop value-added products and expand internationally.

While global uncertainties remain a near-term consideration, the company remains optimistic about the Indian packaging market and intends to pursue capacity expansion and technology investments in a disciplined manner to support sustainable and profitable long-term growth.
 

Published at : Sep 28, 2026 06:26 AM (IST)

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