Pakka (516030) Q3 24/25 earnings summary

Executive summary

• Q3 revenue reached ₹111.43 Cr, a 4% decrease sequentially but a 9% increase year-over-year, with net profit at ₹17.45 Cr, up 5% YoY but down 19% QoQ.

• The food wrap and carry segment maintained business levels, with revenue higher than the previous year's nine months, but profitability remains under pressure.

• The molded fiber (food service disposables) segment faces intense competition from over 50 new entrants, leading to pricing pressure, stock buildup, and operational shutdowns.

• Board approved unaudited standalone and consolidated financial results for Q3 and nine months ended 31 December 2024, with Pakka Guatemala now a wholly owned subsidiary.

• Project Jagriti is 44% complete, with key infrastructure progressing despite logistical challenges.

Financial highlights

• Standalone Q3 revenue from operations: ₹10,600.52 lakhs, up from ₹9,933.74 lakhs YoY; net profit: ₹1,275.08 lakhs, up from ₹1,175.47 lakhs YoY.

• Food Wrap & Carry revenue for Q3 FY25 was ₹95 Cr, flat year-over-year and down 7% sequentially; Food Service Disposables revenue was ₹17 Cr, up 9% YoY and 21% sequentially.

• PBT for Food Wrap & Carry in Q3 FY25 was ₹14.92 Cr, up 32% YoY but down 6% sequentially; PBT for Food Service Disposables was -₹2.24 Cr.

• Debt to equity ratio stands at 0.45 for FY24-25, higher than 0.36 in FY23-24.

• Standalone and consolidated EPS for Q3: ₹3.12 and ₹2.17, respectively.

Outlook and guidance

• Project Jagriti is targeted for commissioning by year-end, with base paper production for flexible packaging expected to start by then.

• Commercialization of metallized flexible packaging is expected in Q2, and non-metallized in Q3 of the next fiscal year.

• U.S. fundraising roadshow for Project Kawok is planned for Q1 (April onward), with a pre-money valuation of $500 million and expected dilution of 30%-40%.

• Board approved merger scheme for Pakka Impact Limited into the company, pending further approvals.

• Closure of Pakka Pte Limited planned for FY 2024-25, with impairment already recognized.