Captain Polyplast sees explosive PAT growth despite revenue challenges

Captain Polyplast Limited, a prominent player in micro irrigation, solar EPC, and polymer markets, released its Q2 FY25 and H1 FY25 earnings, revealing a complex financial narrative. While total income for Q2 FY25 declined significantly, the company demonstrated resilience with a sharp surge in profit after tax (PAT).

According to the report, total income dropped to ₹53.92 crore in Q2 FY25 from ₹71.02 crore in the same quarter last year, marking a 24.1% decline. Similarly, the H1 FY25 income decreased to ₹119.59 crore from ₹144.44 crore in H1 FY24. However, PAT for Q2 skyrocketed to ₹16.27 crore, up from ₹3.79 crore in Q2 FY24, representing a staggering 329.3% increase. The PAT margin also surged from 5.33% to 30.18%, driven largely by strategic cost management and one-time investment gains.

EBITDA margins buoyed by cost efficiencies

Despite challenges posed by prolonged monsoon seasons dampening demand for micro irrigation systems, the company managed to expand its EBITDA margins. Q2 FY25 EBITDA stood at ₹6.69 crore with a margin of 12.41%, compared to 10.82% in the corresponding quarter of the previous year. This improvement was attributed to a decline in raw material costs, which are expected to remain stable in the upcoming quarters.

Ritesh Khichadia, Whole Time Director, acknowledged the subdued performance in revenue but highlighted the silver lining of increased water availability for the rabi season, which is expected to boost demand in Q3 and Q4 FY25. He also pointed to growth prospects in the solar EPC vertical, citing the company’s empanelment under the PM Surya Ghar Yojana in key states such as Maharashtra, Madhya Pradesh, and Uttar Pradesh.

Strategic initiatives to bolster growth

Captain Polyplast is taking steps to strengthen its financial position and operational capabilities. The company has finalized a fund-raising plan involving 48 lakh convertible preferential warrants, with promoter group entities participating. This initiative aims to address future expansion and working capital requirements.

Additionally, the company’s upcoming manufacturing facility in Ahmedabad, set to begin operations in Q1 FY26, is expected to significantly enhance capacity and efficiency. The plant will focus on producing critical components for micro irrigation, potentially increasing profitability.

Diversification and expansion in focus

Established in 1997, Captain Polyplast is leveraging its 25-year expertise to diversify its revenue streams. The company plans to increase its non-subsidy micro irrigation sales and expand its footprint both domestically and internationally. With a robust distribution network across 16 Indian states and exports to Africa, Latin America, and the Middle East, the company is well-positioned for growth.

Its collaboration with Indian Oil Corporation Limited for polymer product marketing and a strategic push in solar EPC are seen as key drivers for revenue diversification.

Outlook and projections

The company remains optimistic about the second half of FY25, anticipating improved demand and stable input costs. Analysts suggest that while revenue challenges persist, strategic diversification and cost efficiency measures could bolster long-term profitability.