Interview with Sandeep Sikka, CFO, AGI Greenpac

05 Jun, 2023

4 min read

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Interview with sandeep sikka cfo agi greenpac
In addition to consumer trends, the remarkable growth of the e-commerce industry in India also plays a significant role in driving the packaging industry's expansion, expresses Sandeep Sikka, CFO, AGI Greenpac.

In FY23, the company posted the highest profits ever. What were the factors which contributed to your growth? 

In Q4 FY23, the Company delivered a strong performance and reported Revenue from Operations of Rs 680 crore, compared to Rs 432 crore in Q4FY22, registering a robust growth of 58% on a Y-o-Y basis. The Company delivered EBITDA of Rs 196 crore, registering a growth of 111% on a Y-o-Y basis with a margin of 29%. Net Profit of continued operation stood at Rs 96 crore, registering a growth of 152% on a Y-o-Y basis with margins of 14%. 

In FY23, the Company delivered a robust performance and reported Revenue from Operations of ₹2,281 crore, compared to Rs 1,430 crore in FY22, registering a strong growth of 60% on a Y-o-Y basis. The Company delivered EBITDA of Rs 488 crore, registering a growth of 59% on a Y-o-Y basis with a margin of 21%. Net Profit stood at Rs 249 crore, registering a growth of 114% on a Y-o-Y basis with margins of 11%.

The sales and profitability improved on a Y-o-Y and Q-o-Q basis. This positive performance can be attributed to several factors, including an enhanced product mix and a notable increase in demand for our glass container products in the non-alcoholic & alcoholic beverages and packed food segment.

What is your outlook for the Indian packaging industry for the next few years?

The Indian packaging industry is projected to grow at a consistent rate over the next few years. 

This growth can be attributed to the substantial expansion of consumer markets, particularly in sectors such as processed food, personal care, and pharmaceuticals. The rising disposable income and fast-paced lifestyles of young Indians have led to a surge in the consumption of fast food and ready-to-eat products, further driving the demand for packaging solutions.

In addition to consumer trends, the remarkable growth of the e-commerce industry in India also plays a significant role in driving the packaging industry's expansion.

Adapting to evolving consumer preferences, embracing technological advancements, and ensuring sustainable packaging solutions will be crucial for companies to capitalize on the growth opportunities in this dynamic market.

What are your future capex plans? 

Currently, one of our furnaces is temporarily shut down as we are undergoing the process of relining it. During this shutdown, we are also taking the opportunity to increase its capacity by 100 tonnes, bringing the total capacity to 425 tonnes. The capital expenditure (capex) required for this relining and expansion project amounts to approximately Rs 200 crore. We expect the furnace to be up and running again by July.

What are your top 3 strategic priorities? 

Our strategic priorities remain consistent, focusing on key areas to drive growth and sustainability. These priorities include deploying initiatives to increase internal efficiencies, moving up the value chain and venturing into the speciality glass segment, enhancing fuel efficiency and optimizing planning and Strengthening customer relationships. 

By prioritising these strategic areas, we aim to drive growth, enhance sustainability, and deliver value to our customers and stakeholders. These initiatives reflect our commitment to operational excellence, innovation, and customer-centricity in an ever-evolving business landscape.

What prompted the decision to expand into export markets such as the EU, Canada, and South Africa? What are the niche products that the company is exporting to these markets?

Recognising the strong demand for our products and the potential for supply in various regions, we have made the strategic decision to expand into export markets. This expansion allows us to tap into new opportunities and cater to a broader customer base. Currently, we are exporting high-end products such as perfumery and cosmetics catering to the specific needs of customers across the EU, Canada, and South Africa.

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