GRP Q2 FY27 Earnings Call — Analysis (NSE: GRPLTD)
GRP delivered 226% YoY PAT growth to ₹6.40 Cr in Q2FY27 on 30% revenue expansion, supported by plastics turnaround and initial Pyrova contributions despite raw material cost inflation.
Result quality: strong — Margin expansion. Management sentiment: optimistic.
The take
Q2FY27 Total Income ₹172.70 Cr ( +30% YoY ) . New guidance — Q2FY28 pyrova energy pyrolysis capacit… 45,000 tons . New story: Integrated circular recycling platform .
Results
Revenue grew 30% YoY to ₹172.70 Cr and EBITDA rose 60% YoY to ₹18.20 Cr with EBITDA margin expanding 199 bps to 10.5% despite a 500 bps gross margin contraction.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Total Income | ₹172.70 Cr | +30% | yoy · Q2FY27 |
| Total Income | ₹172.70 Cr | +9.8% | qoq · Q2FY27 · vs ₹157.30 Cr in Q1FY27 |
| Total Income | ₹330.00 Cr | +28% | yoy · H1FY27 |
| EBITDA | ₹18.20 Cr | +60% | yoy · Q2FY27 |
| EBITDA Margin | 10.5% | +199bps | yoy · Q2FY27 |
| EBITDA | ₹35.60 Cr | +60% | yoy · H1FY27 |
| EBITDA Margin | 10.8% | +220bps | yoy · H1FY27 · vs 8.6% in H1FY26 |
| Gross Profit | ₹79.10 Cr | none · Q2FY27 | |
| Gross Margin | 46.0% | -500bps | yoy · Q2FY27 · vs 51.0% in Q2FY26 |
| Profit Before Tax | ₹8.90 Cr | none · Q2FY27 | |
| Profit Before Tax | ₹17.30 Cr | none · H1FY27 | |
| PAT | ₹6.40 Cr | +226% | yoy · Q2FY27 · vs ₹2.00 Cr in Q2FY26 |
| PAT | ₹10.60 Cr | +186% | yoy · H1FY27 · vs ₹3.70 Cr in H1FY26 |
| EPR Income | ₹6.70 Cr | +55.8% | yoy · Q2FY27 · vs ₹4.30 Cr in Q2FY26 |
| EPR Income | ₹11.50 Cr | none · H1FY27 · includes ₹1.49 Cr from Pyrova | |
| H1 Capex | ₹24.60 Cr | none · H1FY27 | |
| Pyrova Cumulative Capex | ₹114.00 Cr | point_in_time · H1FY27 · Sep-26, includes ₹11.00 Cr CWIP | |
| Gross Debt | ₹219.10 Cr | point_in_time · H1FY27 · Sep-26 | |
| Net Debt | ₹214.00 Cr | point_in_time · H1FY27 · Sep-26 | |
| Debt to Equity | 1.13x | +0.05x | sequential · H1FY27 · vs 1.08x at Mar-26 |
| Working Capital Days | 84 days | -11 days | sequential · H1FY27 · vs 95 days at Mar-26 |
Guidance
Management targets mid-teen EBITDA margins and ~2x asset turns across the integrated recycling platform once Solapur pyrolysis scales to 45 ktpa and rCB commissions.
What management committed to
- [GRP Limited] plans to expand pyrolysis capacity at Pyrova Energy from 15,000 tonnes to 45,000 tonnes by March to early April 2027, achieving full operational impact in Q2FY28. — 45,000 tons, Q2FY28
- [GRP Limited] will commission the recovered carbon black (rCB) facility at Solapur by the end of Q3FY27. — Q3FY27
- Total cumulative investment for the Solapur integrated recycling facility (45 ktpa pyrolysis and 15 ktpa rCB) will reach approximately [₹140 Cr]. — INR140 crores, FY28
- [GRP Limited] targets a mid-teen EBITDA margin and ~2x asset turns for the consolidated platform once the Solapur rCB and expanded pyrolysis lines are fully operational. — mid-teen, FY28
- [GRP Limited] expects the plastics recycling business to grow revenue by approximately 20% in FY27 while maintaining an EBITDA margin between 12% and 15%. — roughly 20% growth, 12% to 15% EBITDA margin, FY27
- [GRP Limited] will cross the stated target of 50% renewable energy share in standalone power needs in FY27 post commissioning of the Gujarat Solar project. — 50%, FY27
Key themes
Integrated circular platform scaling and turnaround
How the narrative shifted
- Integrated circular recycling platform: Positioning GRP as a multi-stream tire recycler (reclaim, crumb, TPO, rCB, steel) sharing common feedstock and energy to reduce single-product cyclicality.
- Input cost inflation and raw material availability: Managing gross margin compression driven by elevated natural rubber prices, high freight, and tight domestic scrap tire supply.
- Plastics business turnaround and value-add pivot: Scaling engineering compounding and automotive applications to drive 12-15% EBITDA margins and high double-digit revenue growth.
- Domestic market pivot and tariff insulation: Expanding domestic sales mix to 52% to insulate the business from global freight, tariff shocks, and currency volatility.
- EPR framework regulatory monetization: Leveraging domestic formal recycling compliance to generate recurring high-margin EPR credit income.
Operational commentary
- Pyrova Energy turned contribution-positive in Q2FY27, completing EPR registration and recognizing initial EPR income of ₹1.49 Cr.
- Solapur rCB (recovered Carbon Black) facility commissioning is progressing with commercial operations scheduled by end of Q3FY27.
- Pyrolysis capacity expansion from 15,000 MTPA to 45,000 MTPA at Solapur is underway for commissioning by March/early April 2027, with full operational impact by Q2FY28.
- Plastics recycling turnaround achieved H1 revenue growth of 38% YoY and 1,100 bps EBITDA margin expansion driven by compounding and specialty automotive/non-automotive applications.
- Downstream Reclaim technology adoption reached ~35% of Reclaim volume, yielding 2-3% overall cost savings.
- Geographic revenue mix shifted toward domestic (52% share of standalone sales in H1 vs 48% YoY), driven by Pyrova and strong domestic tire demand.
Analyst Q&A
Q. Procurement strategy for pyrolysis feedstock given prohibitions on imported waste and outlook on regulatory framework.
GRP relies 100% on domestic waste for Pyrova Energy, while imported end-of-life tires are used strictly for reclaim rubber under Advance Licenses. Freight increases have tightened domestic scrap tire supply.
Q. Competitor progress in rCB quality and GRP's target EBITDA per ton for rCB.
Management clarified that commercial rCB operations have not yet commenced (only a pilot plant is operational). Declined single-product EBITDA per ton guidance, reiterating a mid-teen EBITDA target for the integrated platform.
Q. Explanation for divergence between 500 bps gross margin contraction and 199 bps EBITDA margin expansion.
Gross margins were pressured by freight costs and higher conversion mix from Pyrova, but operational efficiencies, energy optimization, and higher adoption of new reclaim tech (saving 2-3% on costs) offset the impact.
Q. Pyrolysis expansion timeline, ramp-up schedule, and profitability trajectory for Pyrova.
Expansion from 15 ktpa to 45 ktpa will commission by end-March/early April 2027 with a 30-60 day stabilization, reflecting full financial impact by Q2FY28. Pyrova became contribution-positive in Q2FY27.
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