In an interaction with Sandeep Sikka, Group CFO of AGI Greenpac Limited

Our strategic moves not only drive growth but also ensure sustainability, delivering significant value to our customers and stakeholders, affirms Sandeep Sikka, Group CFO of AGI Greenpac Limited.

In Q2FY24, the company’s top line surged by 20 per cent from Q1FY23, while the net profit zoomed by 59 per cent from last year’s same quarter. What were the contributing factors to this performance? 

In Q2 FY24, AGI Greenpac Limited posted a Revenue from Operations of Rs 615 crore, marking a 20 per cent year-on-year growth from the Rs 512 crore recorded in the same period of the preceding fiscal year. The company recorded an EBITDA of Rs 139 crore, reflecting a 59 per cent Y-o-Y.

In H1 FY24, the company's revenue from operations was Rs 1,174 crore, marking a 14 per cent Y-o-Y increase from Rs 1,034 crore in H1 FY23. The company delivered EBITDA of Rs 279 crore, registering a growth of 55 per cent.

Our strong performance is on the back of an integrated approach, supported by a deep understanding of market dynamics, a refined and improved and flexible product mix, and efficient capacity utilization bolstered by the commercial production of the new Bhongir plant.

What is the future outlook for the glass containers business, particularly considering its growth driven by improved product mix and increased demand from beer, liquor, and non-alcoholic segments?

The glass containers business is poised for positioned for substantial growth in the foreseeable future.

The industry is witnessing a shift towards premiumization, driven by increased demand from the beer, liquor, and non-alcoholic segments. We have also observed a surge in the cosmetic and perfumery sector, contributing to a notable uptick in the demand for glass containers within this segment. To ensure we can cater to this burgeoning need, we have increased our existing capacity at our plants and also set up a new plant for speciality glass with 154 tonnes capacity which makes high-end glass bottles, vials and containers to cater to the requirements of sectors such as cosmetics and perfumery, pharmaceuticals, premium spirits, food and beverages as well as water bottles and candle jars.

To meet the growing demand effectively, we have expanded our capacity at some of the plants and established a new state-of-the-art plant for manufacturing speciality glass. This new plant has a capacity of 154 tonnes and specialises in manufacturing high-end glass bottles, vials, and containers tailored to the specific needs of cosmetics and perfumery, pharmaceuticals, premium spirits, food and beverages sectors. We also have a decoration unit on the same premises which serves as a hub for innovation, helping us in experimenting with new techniques and materials to stay ahead of market trends. It enables the customization of glass containers to meet unique branding and marketing requirements.

Can you elucidate on the company’s capex plans?

Next year, a new furnace is scheduled for relining, presenting an opportunity to expand capacity by around 100 tonnes. This strategic move aims to drive sales growth and also help us meet the increased customer demand. The product mix will be pivotal, offering significant opportunities to sustain momentum and achieve growth, even with incremental volume increases. The capital expenditure (capex) required for this expansion project amounts to approximately 80-100 crore, excluding the relining of the furnaces

How is the packaging segment meeting the rising demand for distinctive and visually captivating glass packaging, while also tackling the complexities of secure transit and delivery for glass products purchased online?

The packaging segment is actively responding to the increased demand for visually captivating glass packaging by incorporating innovative and unique designs. This includes leveraging advanced printing techniques, embossing, and labelling technologies to create distinctive packaging that stands out in the market.

There are challenges in the transit of glass products purchased online. To address this, the industry is adopting protective measures such as custom-designed inserts and padding, to minimize breakage risks during transportation. In addition to it, we are seeing innovative sealing methods to prevent glass container movement, while clear handling instructions guide are being given to logistics providers and consumers. Technology integration, including IoT-enabled tracking devices, monitors package condition in real-time, enabling immediate intervention if mishandling occurs are some of the steps being considered for secure transit and delivery for glass products purchased online.

At the moment, what are your top 3 strategic priorities?

Our priorities continue to revolve around sustainable growth, ensuring customer satisfaction, and fostering environmental responsibility. To achieve these objectives, we are steadfastly strengthening our processes, implementing innovative optimization strategies, and achieving specific milestones for sustainability.

Our commitment extends to fostering strong relationships with customers across various sectors, including cosmetics, perfumery, pharmaceuticals, premium spirits, food, and beverages.

Dedicated to embracing and investing in environmentally friendly technology and initiatives, we aim to establish a long-term, sustainable business that benefits all stakeholders. Our strategic moves not only drive growth but also ensure sustainability, delivering significant value to our customers and stakeholders.