Avro India unveils 36% EBITDA growth as it targets plastic recycling dominance

Avro India Limited, one of India’s leading manufacturers of high-quality plastic molded furniture and a significant player in flexible plastic recycling, has reported robust financial results for the second quarter of FY25. The company achieved notable quarter-on-quarter growth, with revenue rising by 8%, EBITDA surging by 36%, and profit after tax (PAT) increasing by 26%. The figures highlight the success of the company’s strategic shift from trading raw materials to focusing on its core manufacturing operations.

Strategic Highlights and Business Model Evolution

The management of Avro India Limited, led by Chairman and Whole Time Director Sushil Kumar Aggarwal, has embraced a unique business model that revolves around recycling post-consumer plastic waste into premium furniture. This pivot aligns with their broader vision of sustainable growth and enhanced backward integration. The company has invested in state-of-the-art American machinery, proprietary technologies, and a robust distribution network encompassing over 300 distributors across 24 Indian states.

Avro India is ramping up its recycling capacity from 6,000 metric tons per annum (MTPA) to 12,000 MTPA by FY25, with further plans to expand capacity significantly in the next three years. This expansion is expected to bolster the production of plastic furniture from the current three million pieces annually to five million.

Key Financial Insights

Despite a slight year-on-year decline in revenue due to the cessation of trading operations, the company’s EBITDA margin improved to 9.1% in Q2FY25 compared to 7.2% in Q1FY25. This improvement underscores Avro India’s operational efficiency and cost management. The PAT margin also rose from 3.4% in the previous quarter to 4.6%.

Aggarwal stated that the company is well-positioned to capitalize on emerging opportunities in plastic recycling and enhanced government regulations, including extended producer responsibility (EPR) norms. He emphasized the role of their sustainable practices in reducing greenhouse gas emissions and mitigating plastic pollution.

Future Prospects

Avro India’s focus on cost-effective production and expansion is expected to drive significant top-line and bottom-line growth, potentially quadrupling in the next three years. The company’s products, marketed under the brands AVRO and AVON, are known for their affordability and durability, making them popular across various segments, including hospitality, education, and residential markets.

Market Presence and Social Impact

The company’s products are available both online through platforms like Amazon, Flipkart, and IndiaMart and offline through its extensive distributor network. Beyond business, Avro India supports initiatives like girl child education, underscoring its commitment to corporate social responsibility.

With an impressive track record of innovation and sustainability, Avro India is poised for long-term success in both domestic and international markets.