Knack Packaging Q1 FY27 Earnings Call — Analysis (NSE: KNACK)
Knack Packaging's first post-IPO quarter delivered 40.5% YoY revenue growth to ₹264.77 Cr with EBITDA margin expanding to 22.35%, while the IPO-funded capacity expansion remains on track for October 2027.
Result quality: stable — Steady quarter. Management sentiment: optimistic.
The take
Q1FY27 Consolidated revenue ₹264.77 Cr ( +40.50% YoY ) . New story: IPO-funded capacity expansion .
Results
Q1FY27 revenue rose 40.5% YoY to ₹264.77 Cr, EBITDA rose 53.1% YoY to ₹59.17 Cr at a 22.35% margin, and PAT rose 48.0% YoY to ₹30.53 Cr on 20.9% volume growth.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated revenue | ₹264.77 Cr | +40.50% | yoy · Q1FY27 · ₹187.17 Cr in Q1FY26 |
| Total sales volume | 10,940 MT | +20.90% | yoy · Q1FY27 · 9,047 MT in Q1FY26 |
| Consolidated EBITDA | ₹59.17 Cr | +53.14% | yoy · Q1FY27 · ₹38.64 Cr in Q1FY26 |
| EBITDA margin | 22.35% | yoy · Q1FY27 · 20.65% in Q1FY26 | |
| Consolidated PAT | ₹30.53 Cr | +47.96% | yoy · Q1FY27 · ₹20.63 Cr in Q1FY26 |
| PAT margin | 11.53% | yoy · Q1FY27 · 11.03% in Q1FY26 | |
| ROCE | 54.73% | yoy · Q1FY27 · 46.05% in Q1FY26; transcript correction from erroneous 57.73% | |
| ROE | 37.45% | yoy · Q1FY27 · 37.04% in Q1FY26 | |
| Order book | ₹130 Cr | point_in_time · Aug-2026 · As of call date | |
| Foreign exchange gain | ₹1.6 Cr | none · Q1FY27 · Reported during Q1FY27 | |
| Gross block | ₹416 Cr | +₹141 Cr | yoy · 30-Jun-2026 · ₹273 Cr in Q1FY26; Q1FY27 addition ₹30.75 Cr |
| Installed capacity including rented facilities | 48,000 MTPA | point_in_time · Q1FY27 · Including rented facilities; ~91% utilization |
Guidance
The new plant remains on track for October 2027, taking installed capacity to ~70,000 MTPA; management expects Q1FY27 sales levels to be maintained but gave no quantified margin or volume guidance.
What management committed to
- The new manufacturing facility funded by IPO proceeds remains on track to be commissioned in October 2027, taking total installed capacity to approximately 70,000 metric tons per annum from approximately 43,300 metric tons per annum at listing. — ~70,000 metric ton per annum, Q3FY28
- Until the new plant becomes operational in October 2027, [Knack Packaging] will use rented facilities for semi-finished goods production while value-added processing remains at the existing manufacturing facility, and the trained workforce will transition into the new plant. — Q3FY28
- [Knack Packaging] expects the sales level achieved in Q1 FY27 to be maintained in coming quarters by utilizing the newly rented plants until the new plant starts in October 2027. — FY27
- [Knack Packaging] will continue to focus on increasing the share of high-value-added pinch-bottom bags; pinch-bottom selling percentage was 19–20% earlier and currently stands at 22.5–23%.
- [Knack Packaging] will continue adding new countries and new customers; [Knack Packaging] was present in 74 countries in Q1 FY27, up from 71 countries in FY26.
- Main construction of the new plant will pick up after the rains, and [Knack Packaging] will try to enter production as quickly as possible. — FY27
- [Knack Packaging] will try to maintain or improve asset turnover after the capacity-related gross block addition, with current gross block asset turnover at 2.53x.
Key themes
Capacity expansion and premium mix shift
How the narrative shifted
- Premium pinch-bottom mix shift: Management positions pinch-bottom bags as a high-margin, value-added product with limited suppliers and is deliberately shifting mix toward it.
- IPO-funded capacity expansion: bullish
Operational commentary
- IPO-funded new manufacturing facility remains on track for October 2027; total installed capacity will reach ~70,000 MTPA from ~43,300 MTPA at listing.
- Management is bridging capacity through newly leased facilities; one rented plant of ~5,040 MTPA was added about a month before the call, and total capacity including rented facilities is >48,000 MTPA at ~91% utilization.
- Pinch-bottom bag mix is rising: ~22.5–23% of sales versus 19–20% earlier, supported by two pinch-bottom machines installed in the last quarter.
- Export footprint expanded to 74 countries from 71 in FY26, with exports at ~55% of sales and domestic at ~45%.
- Cargill is the largest customer relationship: ~16–17% of total revenue globally, with US Cargill at ~12%; relationship spans 8 countries, 600+ SKUs, and ~₹140 Cr of business.
- Order book stood at ~₹130 Cr as of the call date.
- Customer retention is ~90%; company serves 2,000+ customers and 13,000+ SKUs.
- Solar and wind initiatives, including an 11 MW solar farm at Khedbrahma, contributed ~1.1% YoY electricity cost savings.
- Management cited a 10% market share in this packaging category per a Technopack report and called itself the Indian market leader in pinch-bottom bags.
- IPO proceeds were ~₹320 Cr, earmarked for the new plant; machinery finalization is under process and main construction will pick up after the rains.
Analyst Q&A
Q. Why are ROCE and asset turnover so high relative to peers?
Management explained the integrated textile-cum-packaging model, distinguished gross block versus net block asset turnover, and argued there is no genuine listed peer for like-for-like comparison.
Q. How are you handling raw material and crude price volatility, and what is the pass-through timeline?
Alpesh Patel cited 30-year experience, SAP S/4HANA forecasting, cash buying discounts, and conversion-based contracts for 45–50% of customers; he said polymer price changes are passed to customers the same day.
Q. If input prices fall, will you pass on the benefit or keep the margin?
Alpesh Patel said it depends on the situation and claimed sometimes 50% is passed on and 60% is retained, without a clear framework.
Q. What were PLWPP versus pinch-bottom volumes in FY24 and FY26, and how will pinch-bottom volumes move over the next 3 years?
Management gave current pinch-bottom share of 22.5–23% versus 19–20% earlier but did not provide the requested FY24/FY26 absolute volume split or a 3-year target.
Q. What is the future guidance for EBITDA per kg and FY27 volume growth?
Management said it focuses on value-added products and exports and that profit will come automatically, but gave no quantified EBITDA/kg or FY27 volume guidance.
Q. Where will the next 2–3 year growth come from by product category and geography?
Alpesh Patel pointed to pinch-bottom bags, new innovations, and high-labor-cost countries as export customers, but did not provide a product/geography growth breakup.
Q. What is the gross block addition this quarter, and will asset turn of 2.5x be maintained after the ₹380 crore expansion?
CFO quantified gross block at ₹416 Cr with ₹30.75 Cr added in Q1FY27; Alpesh Patel said they would try to maintain and improve asset turnover but gave no explicit target.
Q. Can the company maintain ~40% revenue growth and improved margins in coming quarters?
Alpesh Patel said the rented plants are already running and selling, so Q1FY27 sales are expected to be maintained, but he did not quantify growth or margin.
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