All Time Plastics Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Gross margin reset, not a crisis: Gross margin fell 310 bps QoQ to 36.18%, driven by a deliberate customer mix shift toward lower-margin international accounts and a one-off raw material sale, with a recovery path mapped through operational efficiency.
• Capacity build-out is ahead of demand: Fixed costs from new Manekpur and Guwahati plants are already hitting the P&L while sales lag, compressing EBITDA; management expects sales to catch up now that orders are in hand.
• Bamboo is the big, early-stage bet: Pilot approval and a trial order from one large customer mark the first commercial step into a category management believes could rival current business volumes within a few years.
• New market access is broadening the funnel: First orders from Australia and Japan, plus two JV-sourced customers from the US and Australia, signal geographic diversification is moving from talk to transactions.
• What to watch next quarter: Whether the secured orders convert into the promised EBITDA recovery, the pace of gross margin normalization, and any further bamboo customer wins that validate the scale thesis.

The Gross Margin Reset

• Customer mix, not cost inflation, did the damage: Higher-margin customer sales declined while lower-margin international customers grew their share, compressing blended realization. A one-off sale of ₹3.3 crores of raw material due to a forecast mismatch added 0.83 percentage points to the decline.
• Realization fell with the mix: Realization per kg dropped from the ₹225-228 range in FY25 to roughly ₹213, reflecting both pass-through of lower material costs and the shift toward larger, lower-realization customers.
• Seasonality was acknowledged then walked back: Management first said seasonality does not impact the business much, then conceded Q2 typically goes a little down versus other quarters, calling the effect marginal.
• The recovery lever is operational efficiency: Competitive pricing offered to win new customers and categories is expected to be offset by efficiency gains, not by a snap-back in mix. Gross margins will take time to return to the historical 39%-40% average; the 41% peak was a one-off.

Manish Gattani: "Strategically, we are giving some competitive prices, but definitely those competitive prices will be covered up by the operational efficiency we will get. We expect that EBITDA will be maintained, maybe a little dip in the EBITDA margin, but it has been rewarded also."

Capacity & the EBITDA Bridge

• Fixed costs are running ahead of revenue: The Manekpur and Guwahati plants have started incurring fixed expenses, but sales demand was lower than expected in Q2, causing a substantial EBITDA decline. Management states sales is now on track.
• The path back runs through utilization: Fixed costs are mostly done and will not increase much even as more machines are added, so incremental volume should contribute directly to EBITDA. Optimal utilization is expected by Q4 FY27.
• Capacity is scaling on schedule: Capacity reached 37,000 metric tons at September end, with new machines installed in the last week of September and additional machines under installation. The trajectory targets 46,500 MT by FY26 and 52,500 MT by FY27.
• Khatalwada expansion nears completion: The factory building expansion is on track to close by December end or the first week of January; the administrative block expansion is also on track.
• Management declined to timeline the EBITDA recovery: When asked when the 18%-19% EBITDA trajectory returns, management said it cannot comment and that it depends on optimal utilization of the additional capacity.

Bamboo: The Next Platform

• First commercial validation secured: Bamboo samples were approved by one large customer, a trial order has been received, and shipment is expected in the last quarter of this month from the pilot facility. The product is in final stages of quality and validation.
• The ambition is company-defining: Management believes the bamboo opportunity, once structured, could be as big and comparable to current businesses in volume within a few years, with a first-mover advantage in the category.
• Margins look better than the base business: Bamboo products are expected to carry slightly better margins than existing business, with innovation enabling better margins through product segmentation.
• The go-to-market push starts now: Teams are working on new product designs and developments; the company will start pitching to prospective customers shortly. Current pilot capacity is 4,000 cubic, with plans to increase ramp-up capacity.

Kailesh Shah: "This opportunity is very big, because we will also have the first mover of advantage in this area. And we foresee that within a few years, once we structure, it could be as big as and as comparable to our current businesses, what we are running into in terms of volume."

Geographic & Channel Diversification

• International weakness was concentrated: The low-margin customers that drove the mix shift were on the international side, with confirmed weakness in US and European markets. UK sales have been flat for three years due to a sluggish economy, not tariff or duty issues.
• New markets are opening: The company closed its first order with an Australian customer, describing it as a very big market opportunity and a new market for All Time. A Japanese retailer order was also closed, marking another new market entry. Two additional customers came through the JV: one from the USA and one from Australia.
• Domestic share has a stated ambition: The domestic contribution pie shifted roughly 2% from H1 FY25 to H1 FY26. Management wants to move the domestic share from the current ~17% to 25%, with B2C expected to grow as part of that strategy.
• Quick commerce is on pause: The company had traction with quick commerce players, but sales fluctuated with their promotional spending. All accounts moved from a sale basis to consignment, which the company did not want; management is now looking for partners to bring those businesses back.
• IKEA is a steady build: IKEA business is expected to grow organically as stores open, with each new store adding growth potential.

Kailesh Shah: "We wish to currently our share is around 17%. We wish to move it to 25%, the needle to go up to 25%."

Trade Policy & Competitive Positioning

• EU FTA is a watched catalyst: Management is eagerly looking forward to the EU FTA, expecting a great advantage because the business is driven by the EU market and the company would be more competitive than Chinese competitors on landed cost.
• US tariff relaxation would help: The company is expecting more tariff relaxation; some US client orders are already backed for the next two quarters. Management reiterated that at similar scale and size, its factories are as competitive as China's.
• The US hit in Q2 was small: The US revenue impact from the tariff situation was confined to one customer and was percentage-wise very small.
• Supply chain risk is shaping geography choices: The company will concentrate on domestic and closer geographies to reduce supply chain risk, with an internal aspiration to keep the USA between 15%-20% of the mix.

Kailesh Shah: "UA FTA, we are eagerly looking forward and we definitely feel we will have a great advantage with the EU FTA happening because our business does drive by European Union market today and we would be more competitive than our competitors in China for our landed cost."

Customer & Order Book Dynamics

• New customers are converting: Customers added in the previous call have now fructified, and the company has moved to the next stage of engagement for developing products in new categories.
• Order strategy favors long-term business: Management will be strategic in order selection, taking short-term orders only if the customer has a long-term vision; the majority will be long-term business.
• Customer concentration reduction is underway: The company will work with other customers to reduce concentration, though the speed will slow if the US ramp-up does not happen; the direction will remain the same. Middle East markets will also be targeted for revival.
• Capacity is unlocking previously inaccessible business: The Khattalwada plant expansion is enabling the company to secure orders that were not possible before the facility started.
• Target recognized operational excellence: The company received the Country Of Production Diversity award from Target for operational excellence and agility under Target's China Plus One strategy.

Guidance & Commitments

Key Metrics