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Ladies and gentlemen, good day, and welcome to the Mold-Tek Packaging Limited Q1 FY '23 Earnings Conference Call hosted by Nirmal Bang Equities Private Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Abhishek Navalgund from Nirmal Bang Equities. Thank you, and over to you, sir.
Thanks, Sanjay. Hello, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to Mold-Tek Packaging Limited 1Q FY '23 Earnings Conference Call. We have with us Mr. Lakshman Rao, the Chairman and Managing Director of the company, along with the entire finance team at Mold-Tek.
Without further ado, I would request Lakshmana, sir, to start with his opening comments post which we'll open the floor for Q&A. Thank you, and over to you, sir.
Good afternoon, everybody. Thanks for your participation in our [Technical Difficulty] I'm very glad to inform you that in all segments, Mold-Tek has shown [Technical Difficulty] 55% increase in sales and [Technical Difficulty].
Ladies and gentlemen, please be on hold. We cannot hear the management speaking at this point of time. We'll just quickly get back to you. Please give me a moment.
[Technical Difficulty]
Ladies and gentlemen, the management is reconnected. Please go ahead, sir.
Dear all participants, thank you very much for your interest in our quarterly results conference. I'm very glad to inform you that all segments have done wonderful in this quarter, reaching a historical volumes and that enabled us to achieve 55% volume growth in sales and PAT is up by 80%. And this is -- though it is compared with the COVID effected last year quarter, even our comparative to the figures of '18, '19 and '19, '20, these numbers have been substantially better.
So the overall top line is more than INR 207 crores as against INR 133 crores last year, in terms of rupee terms, that is up by 55%. But even in the volume terms, the numbers have gone up less than 6,000 tonnes in Q1 last year to more than 9,000 tonnes. And this is the first time in the history of the company, in a quarter, we achieved more than 9,000 tonnes. The previous figure is less than 8,000 tonnes, so around 8,000 tonnes. And this year, 8,400 was the highest in Q4. And we achieved 9,040 tonnes of sales and 9,150 tonnes of production, which is a historical high in our company's performance.
This has become possible because of a huge increase in demand in our Food and FMCG as expected. But also one surprising event is lubricants business also grew up very much in the quarter due to new brand of DEF brand of [indiscernible] being introduced in the country. It's been introduced a year ago, but more and more numbers have been accumulated towards Mold-Tek in the last few months and that resulted in a big jump in sales for lubricant industry as well.
So going forward, another new announcement or new duration taken by the company is to set up a second plant at Daman because the Daman plant is now full, and there were some issues of getting additional construction permits due to the huge highway we have in front of our factory. So Mold-Tek company has decided to set up this new plant in a new land and very soon, we'll be going ahead with the plan there because a lot of clients, in the Western region will have Food and FMCG, are expecting us to be nearer to them in the rest and it also makes both commercial and transportation sense to be closer to the clients.
So the Board has decided to set up a plant -- the second plant in Daman during the financial year itself or probably still into the beginning of next financial year. That is a new announcement in terms of CapEx and other capacity plans that were announced at the time of QIP are going on well in time. The major plant of IBM products in lower molded products coming up at Sultanpur will be operational in the beginning of next year. And our pilot plant to produce OTC products and even sampling of pharma products would be starting in September or October of this year itself.
And I'm also glad to inform you for the entire pilot plant capacity, we have received orders from one of the major FMCG companies in the country for an OTC product, which will completely outweigh the capacity of the IBM pilot project. So this has been confirmed and the molds are now under development.
And I'm also glad to inform you that the FMCG companies are now on the -- back contract to develop new products in [indiscernible] which they almost suspended for the last 2 years of COVID impact. And now they are opening up the dose and, at least, 3 projects are confirmed to go ahead. And another fourth project is being decided in this next few weeks.
So that way, the Food and FMCG new brand development is also started, which has been kind of suspended for the last 2 years, which might argue well for us in our IML Food and FMCG segment. So other projects are all on time going on as for clients, and we hope to achieve our ambitious target in this year.
And also one major announcement is as expected at the time of QIP, we mentioned to you that INR 250 crores of CapEx is planned for the next 2.5 to 3 years. And this year itself, the company has layered out plans to invest INR 145 crores, plus or minus 5% to enhance various capacities, set up new plant at Daman, maybe start new plant construction at Kanpur and complete the -- mainly the Sultanpur pharma project at case buildings and the main missionary would be completed.
And we are doubling our IML label printing capacity and steps have been taken to make sure that's also in the -- on the annual before the next season starts in January. And we also doubled almost or, if not, doubled, the tool room capacity, where we used to make 4 to 5 molds a month. It will be a to 7 to 8 a month starting by January '23. So these plans are all keeping us very busy, but we foresee that these kind of investments are required to meet the growing demand for our products.
So now I leave the floor open for question and answers. Back to the coordinator.
[Operator Instructions] The first question is from the line of Ravi Naredi from Naredi Investments.
Sir, you are super genius. One, my request kindly preserve money for expansion in CapEx and do not give big dividend because the equity raising cost is too much high in compared to giving the dividend. You have raised the equity by QID and that is our costlier impact on the company and company need -- and shareholder need to pay taxes on that. So our request, please reserve with the money for CapEx expansion for the -- in the company.
And sir, how -- now much will be net profit each quarter 1 due to increase in raw mats, how much will be net profit rise due to raw material increase or finish cost increase in quarter 1?
See, I always told you, raw material price increase or decrease will have only a marginal impact on our profitability. We pass on the raw material impact on a monthly basis or on a quarterly basis to our clients. So whatever is in the Q4 raw material average price will be applied while invoicing in the Q1 of this year. Sometimes, April pricing is applied in May, May pricing is applied to June, depending upon the client relations.
Major clients, it is quarterly. But small- and medium-sized clients, it's on a monthly basis. But whenever the price of raw material is going up, we will be bearing for a couple of months or -- for a month or 2, we'll be bearing the cost impact. Similarly, when the raw material prices are coming down, we will enjoy the price advantage for a couple of months before passing on to the clients.
So I wouldn't consider that as a big impact, maybe on average, INR 1 to INR 2 per kg would be the impact while going up. Similarly, INR 1 to INR 2 advantage when the price is coming down. But this time, the thing being very high, like [ raw material ] price went up from almost INR 119 in December or INR 116 in January to almost INR 139 in April. And then it is now on the down trend, last 2 months from INR 133 in April, it's now around INR 121, even INR 118 now in July. So in a downward cycle, we will be gaining a couple of rupees more in the EBITDA. In an upward cycle, we are losing a couple of rupees on the EBITDA.
And on my request to please consider do not raise equity all this.
Yes. We'll take your advise, but [indiscernible].
[Operator Instructions] Next question is from the line of Omkar Hadkar from Mirabilis Investment class.
Hello [indiscernible] very good quarter. Sir, my question was on the lube segment. I missed the comment, you mentioned some new brand has been introduced. If you can share any experience from an existing plant or any new client has been introduced. And secondly, I saw in your list of clients [indiscernible] in also in the new segment. I just wanted to know how they opted and how much proportion do they contribute to our lube segment?
Your first question is not clear, Mr. Omkar. Regarding the PSU, they have started picking up volumes. BPCL is the only company where we have [indiscernible] but across some PSUs, ExxonMobil and generally, all the DEF brands are causing growth in the lube sector. What's your first question?
Yes. My first question was, you mentioned some new brand [indiscernible] introduced in the new site.
That is a new brand of lubricant companies have introduced about a year ago. And the numbers are shooting up due to various advantages that lube has again as ordinary lubricants, especially for the -- something [indiscernible]. So that numbers have contributed handsomely in this quarter. We gained major numbers from Gulf and while we're in Shell. These 3 major companies have opted our sales, and that is one of the reasons why there is a shoot-up in the lube sales.
And what about -- in terms of the sustainability of these volumes of this new segment, do you foresee this to be a recurring feature?
Your voice is not very clear. Can you speak...
But what do you in terms of the sustainability of these volumes from this new segment of the new product? Do you think this will continue going forward?
Yes, it is. Yes, obviously, it will continue. Then maybe a little bit in the monsoon once for lubricants. But once the brands are there in the market for some particular range of engines, as long [indiscernible] are there lubes are required.
Understood, understood, sir. My second question is on the IBM side, you have mentioned there is a pilot turnout project that you have been doing. Is it a sizable project because you mentioned you're putting up a capacity for 2,000 tonnes. But this pilot project, is it kind of a sizable project? Or is it a small one to begin with?
No. No. The pilot project is with a Ford Mission project, having capacity to produce about 4 to 5 crores bottles per annum. And we now have almost 4 crores to 5 crores commitment from one of the OTC products. So otherwise, that will be in the region of 8 to 10 crores. So it is not very small, but at the same time, it's not a huge pilot project.
From this, the next major project at Sultanpur will be having about 4x capacity to start with, but it can be expanded by adding more and more machines. So the first pilot project of close to 500 tonnes per annum would be completely operational from October onwards. There's about 40 tonnes per month. But that's how it pinning into IBM, and it's a good beginning because right from the Day 1, we will have almost 80% to 90% capacity occupied.
And this will give us an opportunity to showcase our abilities in IBM to our clients as well as new pharma clients. And hopefully -- but as I explained all the time, pharma will start contributing numbers only from the year '23, '24 because it has now -- in the session, period for clearances, stability tests and other product. However, other processes -- but however, we'll continue to take opportunities in because those the compliances and time taken is much sharper.
Okay. And sir, my one final question is only you have not mentioned in your presentation also in either on my comments. What is happening on the [ pump ] side? I mean you have set up the capacities but it was not as per our expectations. So what is happening there?
Yes. So pump side, we continue to have average performance only. About [ 150 million ] tonnes capacity of about [ 67 million ] is being engaged. As I told in the last commentary of last quarter also, the duty of -- one good thing about this pump division is all the 6 machines that are kept for pump manufacturing can also be used for all of our similar products. So -- but we are not keeping any of the mission side. Only part of the investment on the modes, which are meant for pumps are only partially placed to the extent of 20% utilization.
As I explained, Wipro, who has committed a slot to 2.5 to 3 million per month presently picking up hardly 700,000 to 800,000, that 7 to 8 lakhs a month. And until they setup their plant in Hyderabad, which is the first to end of this year, their volume won't pick up. But we are still trying. We are adding clients here and there. And even the export opportunity in Malaysia in Wipro, we are exploring. So we hope that, at least, next year, it will be about 50% capacity ratio.
Next question is from the line of Bhargav Buddhadev from Kotak Mutual Funds.
Sir, in the press release, there is a mention about major FMCG companies opening up the new IML product development activities. Can you elaborate a bit on the statement made in the press release?
Yes. See, companies like [indiscernible]...
Sir, we can't hear you actually.
Hello? Can you hear me?
Yes.
Yes. Companies like HUL, P&G, GSK, [indiscernible] ice cream, amul, all these companies were generally out of developing any new conflicts of packaging in the last 2 years because of COVID and uncertainties in the market. So now we have seen that in the last 3, 4 months, some of them have started releasing their clearances to go ahead with the new product development with IML.
And in fact, the 3 projects are under almost getting ready by September and October. One is almost ready. Others maybe in the end of September, will be going commercial, maybe in October, it will start commercial supplies. And fourth one is at the final stage that is with again 1 more [indiscernible] and that may be decided any time now.
So with these 4 projects, which I mentioned in the Q1 -- Q4 results had a possibility, but now they are all confirmed and they will be contributing in a full year about INR 40 crores in the Food and FMCG segment. But this year, probably around INR 20 crores, INR 25 crores, we can expect in the remaining 6, 7 months of the year. These projects clearance have been upline and mobile development is going on, and we hope to start supplies some in September and some in October and November onwards.
Secondly, sir, any update on the QR code IML venture, which we were sort of being very optimistic on?
Sorry, what is that?
Is there any update on the QR-coded IML piece that we are all excited?
Yes. Yes. On the QR-coded IML, now, tomorrow -- actually, today, our team is with Shell -- Bharat Shell, Valvoline and Gulf are advanced stage. And probably one of them would be introducing very soon is our guess, Castrol is on the little back seat. They are still not allowing people outsiders to come into their plants for trials and setting up systems. But these 3 companies are open, and hopefully, we'll have a breakthrough during this quarter.
And no breakthrough with any of these paint companies, right, as of now?
As of now, actually, we are not only increasing our capacity at Mysore and Vizag for meeting Asian Paints' increasing demand. But also, we are in talks with Berger and also another new paint company for creating additional capacities for them in the north. So if those things happen, the paint industry will continue to give us a good growth. In this quarter, we have seen 43% growth over the Q1 of last year. But Q1 of last year being not a great year. It is still amounts to more than 10% to 12% growth in a normal year.
And this is expected to increase because Asian Paints has asked us to keep our capacity steady from the onwards, and we are almost there, and we hope the numbers of Asian Paints plants at Vizag and Mysore to better -- perform better starting from August because of the festival season is starting and paint sales peak in October, November, during Diwali. So generally, companies start building up stocks from August onwards.
And sir, just one clarification. So in the last call, you had mentioned that there is a pipeline of INR 40 crores interest in revenue in [indiscernible]. So this statements, which you go out of [indiscernible] looking at developing new packaging? Is that the same part of the particular of revenue, which we were expecting this year?
Yes, they are same. Now they are confirmed. And one additional product is also added, which is under finalization now.
[Operator Instructions] Next question is from the line of [ Hassan Muchale ] from Liberty Research and Investments.
Congratulations, sir, on very good set of numbers. I just wanted to understand the perspective on the export business, so how much percentage of total revenue for the non-export business? And it is easing out in freight cost and container issues. Are we seeing a substantial increase in export business?
The export business is looking up, but the freight cost has still not come to the normal level. What used to be about INR 1 lakh, let us say, for Dubai or Middle East, is even now at around INR 1.8 lakhs per container which used to be almost -- which went up to even INR 300,000 per container. So it is hardly around INR 1.5 crores in this quarter. But going forward, we have 2, 3 major inquiries and sample submissions for actually exports to USA or the [ restaurant ] pack for the feed box pack, and even for [indiscernible] and what is that called? Dough, for dough packing.
So these trial orders have been just supplied in the month of June, July. And we hope those numbers will increase considerably in the coming quarters. But we don't expect volumes to shoot up beyond INR 10 crores, INR 12 crores per annum because of the limitations of the freight.
Okay. Another the question is linked to this only. Do you see any major impact of potential recession in eurozone and the U.S. or what you call the mild recession?
See, as of today, we are dependent only on Indian markets and Indian growth story. And as it is, our demand growth is coming mainly from replacement demand, replacement of either glass or sachets or even thin containers, which are being getting banned because of the thickness being very low. Containers which are uses for curds, only onetime, used containers are really getting banned. So more and more companies are shifting towards IML containers, where we offer the economy, but not as cheap as sachets or those thermoform cups. But because of this ban on such items, more and more companies are looking at IML packs. If that happens, we can effectively see the IML growth to be robust for the next couple of years also.
Sir, second question is, which are our key raw materials and the sourcing country? So do we see any [indiscernible] disruption going...
Our main raw material is our polypropylene copolymer [indiscernible] is our major supplier. A few particular grades, which are required for very thinwall molding, we import from Dubai and Saudi, very little quantities, less than 5%.
So rate is domestically prepared?
Yes. Yes.
Next question is from the line of Akshay Kothari from Envision Capital.
Sir, starting with what would be our volume growth this quarter?
This quarter, the volume growth compared to the previous quarter was 51%. Compare to Q4, it is around 8%, Q4 of last year.
Next question is from the line of Hitesh Taunk from ICICIdirect.
Congratulations on the good set of numbers, sir. Sir, what kind of capacity addition are we looking for FY '23 and by the CapEx of INR 125 crores overall? Earlier, we had around 44,000 odd metric tonnes of capacity, right, by the end of FY '22?
Yes. We hope the capacity will be expanded to 54,000 tonnes with this addition because part of the CapEx is going towards enhancing our toolroom, enhancing our label printing and die cutting and also adding new land at Daman also. So however, the capacity will go up from 44,000 to 54,000 by end of this FY.
Okay. And sir, about this -- we have approximately 9,000 metric tonnes of capacity for this quarter. This is one of the highest. So I mean, can we take kind of this kind of volume going forward for the rest of the year? Or do you see kind of blip in between because of lower demand in the FMCG or any other segments?
See, typically, the Q1 and Q4, our best quarters in Mold-Tek because Q2, the monsoon starts heavily, which disrupts transportation and thereby in general consumption patterns, and also some of the frozen fruits and ice cream conventions come down. But again, from Q3, the festival starts -- festival season. So sometimes, if the demand is too good, people will start picking up in Q2 itself, especially paint. But Q3 will be generally reasonably just around above average.
And Q4 will be a really strong finish again because all the public sector and also some of the companies wish to close on a brighter note and the convention goes as the summer starts arriving in mid-March. So typically, Q1 and Q4 would be really good in terms of volume growth. So we hope it will average at around 9,000 per quarter.
And sir, my next questions, this question will be on the gross margin front. Though on a per kg basis, we have improved on a Q-on-Q basis. But sir, I mean, despite having a significant growth in the FMCG business and the customer additions, is it a kind of level do we maintain going forward? Or do we see kind of improvement in this [ per kg ] going forward?
Yes, I explained in my first question -- answer to my first question, the raw material prices are now started coming down from May onwards. June also better. July, it's come down comfortably. And if the same trend goes for the next couple of months, the EBITDA margins will improve because as I said, there is a lag effect of about 2 to 3 months. So whatever is -- while the prices are going up, we end up supporting our clients because whatever materials we purchase in that month, we will be still pricing 2 months behind.
Similarly, for -- going forward, when the price is coming down, we will be able to command the same price levels for a couple of months, which is now happening. So hopefully, it will, at least, stay around 42, 43 if things go as our plans, if not, worse. Last year, we ended up with 41.8 for the 12 months. So this year, probably we can aim around 43.
And sir, can you give us the volume breakup for segment-wise, sir? And revenue also if possible?
Yes, the volume breakup paying is around 49% -- sorry, in the terms of kgs. Paint is 53%. Lube is 29%. Food and Qpack together is around 18.1%, 18.2%.
The volumes, sir, right?
It is the volume.
And about value, sir?
In the value, Paint is 49%, Lube is 36.5% and 35.5% is Food and Qpack.
Next question is from the line of Rahul Maheshwary from Ambit AMC.
Am I audible now?
Yes. Yes. Now you're audible.
Excellent set of numbers, sir. Just 2 questions. Can you give just now in the previous question you answered about the -- how lag is the pass-through that takes place? Can you give us an example like actual, which is one of your FMCG customer. So whenever they order for the next repeated purchase, what is the pricing that is getting passed on or sometimes when the prices are going up, how much do you take and how much price frequent -- time frequency you pass it on? That is the first question. Irrespective of [Technical Difficulty] FMCG...
There's a break in your voice.
Can you tell the time frequency of passing on to the price...
Most of the clients, it is quarterly or monthly. That means some clients like HUL also is quarterly. Asian Paints is quarterly. Arun is monthly. So like that Amul is monthly. So we have different arrangements with the different clients. And whatever is the price of, let's say, April 1, will be applicable for one month clients in May. And for 3 months clients, whatever the average of Jan, Feb, March will be applicable for April, May, June. So that is how we have agreements with several clients.
Small and medium clients, we don't pass on this kind of thing. We generally tend to take the immediate price rise. So there, we don't lose anything when prices are going up. But many of our clients, let's say, who contribute to 90% of our sale, they are under either 1-month or 3-month average. So for example, if Jan, Feb, March average price is around INR 125, in the month of March, it went up to INR 140. So whatever material we buy even at INR 140, we supply to them at INR 125. But same count, the average of Jan, Feb, March is INR 135, April, May, June is, let's say, INR 120, we'll continue to charge them INR 125 only for 3 months.
And next 3 months, now that is July, August, September, now the prices are around INR 115, INR 112, so let's say, these 3 months, the price goes at a INR 112, but we'll still be charging them at INR 120, which is average of April, May, June. So that way, in a downward trend, we gain. In an upward trend, we lose a bit. So similarly, it will get nullified over a period of time. I hope you understand...
Yes. And which are the segments where on a monthly basis, it has been thought, are you called for quarterly for paint, [indiscernible] cetera. But for monthly, which are the...
For some clients in the paint segment. For Nerolac, Berger adjournable, they're still under 1 month only. Only for Asian Paints, it's quarterly. In the other FMCG, HUL is quarterly, Cadbury is quarterly, but other clients like Arun and Amul it is monthly. So it is different depending upon their purchase formula and our comfort with them. So we offer either 1 month or 3-months average.
As you said, sir, in the injection blow molding already has received an OTC order from the FMCG company. So in case, is that, the capacity gets utilized in the next 2, 3 quarters itself, in case you have to do brownfield expansion, what further CapEx that will be required because as we are seeing the kind of inquiries, as you said, in every year or 9-month time period, you might go for a CapEx in a few of the plants wherever it has been required. So can you throw some light on the CapEx part, brownfield, how much it can be acquired?
Yes. Now Sultanpur project, which is basically we are major investment is on the land and building, mainly building because it requires a pharmaceutical qualification of hygiene and cleanliness. That plant will be ready by November, December, or max by January. And then we will be starting not only pharmaceutical IBM products, but also cosmetics, OTC counter products, for example, I'm telling, it's not that we have orders. For example, Ponds, Vaseline, Amrutanjan, Zandu Balm, all these products are negative coming in IBM. Earlier, the technology used was EBM. EBM means Extrusion Blow Molding, which is a cheap technology and the product finish is always compromised.
In IBM, you get the beauty of injection molding and accuracy of injection modeling at the same time, low weight and reasonable pricing of blow molding. So with this technology getting more and more prevalent, we have decided to enter into IBM last year. And this pilot plant is getting filled with 1 order itself. But again, in Sultanpur by end of December or January, we'll be having another 8 machines. So if the 4 machines are now getting busy, 8 more machines will be added. And the Sultanpur plant is built to house up to 20, 25 machines.
The beauty of our packaging line is we can always adopt and change gears from one to other, like say, from pharmaceutical, even the capacities are created by pharma. And if the pharma companies are taking longer time to give us clearances, instead of keeping the machines idle, we can run cosmetic products on it or OTC medicine products on it or even food IBM products on it. You understood.
So as and when the pharma line demand increases, we convert the whole thing into pharma and set up an additional area or special machinery for cosmetics and other products, thereby we'll be effectively utilizing the capacity rather than create capacity in the idle that for longer periods.
But except Sultanpur and then other facility are fungible, as you mentioned, which can shift from pharma to cosmetics or, et cetera?
See, even in injection modeling, all the machines are fungible. Only molds become unique. So -- and typically, in a project cost of INR 20 crores, mold will be hardly INR 10 crores to INR 12 crores. Even in the pumps case, which the other gentleman was asking, in the overall project of INR 12 crores, molds were around INR 2 crores. So 10% to 15% of the cost is not so fungible, whereas the remaining 85% of the project, including land building and machinery and ancillaries, they are all fungible.
And just last question. As a blended EBITDA per kg, it's on a rise, but can you give the difference between the paint versus the Food in FMCG. Not an absolute number, but how much difference can be there?
Yes, I can't give absolute number for our own business reasons.
In percentage, if you can mention.
Yes, I'll just give you a rough idea. In paint and lubes, if the range is somewhere around 30 to 40, but depending upon the clients and depending upon their volumes. Food and FMCG is somewhere around 80 to 90. And in IBM ordinary products, it is again in the same range 80 to 100. But in pharmaceutical IBM, the range could be as high as INR 180 to INR 200 per kg.
And this digital IML, how much it can add to? I know it's into the trial phase for paints and lubricant, but how much more it can add value to the EBITDA per kg.
See, actually, we are waiting for the critical client entry into this because QR code is still not fully understood by even big companies in our company. Some of them which understood have to go through not only changes and modifications on their filling lines, but also they have to add on their websites and ERP, some additional software features to effectively get the benefits of QR code. So they not only need clearances from their production side, but also from their IT and marketing functions. That is what is taking longer time, but all of them are excited about the prospect and the benefits what it derives. But until last year or beginning of this year, it was COVID. And now from -- now one by one, people are coming forward and opening up to their idea. And I'm sure once it happens, probably now I don't want to give a time, but whenever it happens, it will certainly lead to a lot of companies shifting to QR codes because of the sheer benefits it offers.
How much accretion it can happen in case if it goes from a normal IML to digital IML.
See, I'm more than happy even if 10% to 20% accretion comes through the QR code. But time lines, I don't want to guess now because as somebody commented, we have been thinking that will be a game changer. But time-wise, I don't want to guess. But once it is getting adapted in few big companies, it will certainly move faster.
Next question is from the line of Akhil Parekh from Centrum Broking.
Many congratulations on excellent set of numbers. My first question is on the Food and FMCG segment. If I look at last 3 years, right, our contribution from F&F is in the range of 23% to 25%. So are there any specific challenges in F&F business where we couldn't get a sizable or scalable client, the way we have done in paints, right, like for example, Asian Paints is like 25% of our total sales. Is it something has to do with the industry? Or are there any specific challenges why we couldn't scale up in F&F in last 3 years?
We are growing rapidly in Food and FMCG. Last year, it was 52% growth. And this quarter, it is 54% Q1-on-Q1. But anyway, this quarter is not current quarter to judge because of the previous year's impact. But even the last 12 months ending March, we ended up with 52% growth in the Food and FMCG. One reason why the overall numbers look only grown by around 25% last year was the drop in our Q-packs sales, that is edible oil sales. Edible oil packs have come down considerably last year. Because that industry has faced tremendous price increase in their basic material that is crude oil, palm oil or whatever they import. And that has been really eased out in the last month.
So we see the edible oil companies, which have discontinued our spare tax to save costs are coming back to the back to our banks because the looks of the pack and the branding has been established in the market, but they are forced to withdraw because of fuel cost considerations. And now that the crude palm oil prices have fallen drastically, there, again, looking back at our tax, and I hope in this festive season, the Q-pack numbers will shoot up.
One good thing here to note is while our Q-pack numbers for last full year, it was around INR 40 crores sales -- sorry, INR 40 crores, what contributed 85% by edible oil. This year, they are less than 35%. So new applications of our square packs or Q-packs we call them, are increasing, let it be protein powder, detergent or tea or recently cashew nuts and various other food products, even sweets, they are adopting. Even some of the agro products new trends, micronutrients, aquaculture food, that is getting packed in square packs because they give excellent tamper-evident feature and is very easy to remove pack, at the same time, excellent tamper evident.
So many other applications are centered out of this current year in the first quarter, though we did around INR 10 crores. Out of that, almost INR 7.5 to INR 8 crores is from other applications than edible oil. Earlier, edible oil used to be 75%. Other applicants are hardly 20%. So more and more products are adopting our Q-packs. And once edible oil industry is [indiscernible] December also can shoot up. Then the overall food and Q-pack together will be sizable, better than 24, 23, which is now currently -- the both of them paper around 25%. They can even go up to 30%.
But again, I want to remind you, our other segments like paint is also growing rapidly. If it is stagnated or growing only at 8% to 10%, the growth would have been considerable in Food and FMCG in the overall time. But last year, the paint in the plant, we have grown by 34%. So that base is also increasing. That is why the percentage Food and FMCG still looks around 24%, 25%, but the basic number is also growing.
I got the point. And my question was more from is there scope for further improvement in EBITDA per kg because given that F&F was INR 80 to INR 90 per kg. So that can happen only obviously, our food and FMCG contribution tends to tell you move some 25% to...
I agree with you. The EBITDA margins will improve faster if Food and FMCG of tomorrow or IBM, especially pharma, IBM sales start picking up. Other segments.
So would you be able to mention our top 5 clients and probably what roughly the content is for all total 3.
Yes. Top 5 clients contribute almost 60% to 65% or even 70% of our sales, you can say. Asian Paints is the #1. And then we have Castrol. We have Hatsun that is Arun ice-cream. Amul may not be in the fifth, sixth or seventh and then we have Cadbury -- Hindustan Lever, sorry. Hindustan Lever would be the second because of our relationship Hindustan Lever has increased in many products, and we are adding actually some more products in this year. Hindustan Lever will be our #2 client and followed by Castrol, Cadbury, Amul, Hatsun.
And IML, non-IML volume value contribution for the quarter?
See, IML, as I told in the last quarter also. Now it is more or less stagnating. IML and share together, we are around 66%, which was 63% in the Q1 last year. And last year, full 12 months, it was 65.28%. So it is more or less at the same level, unless a major shift happens in paint companies in our country, this number will now stagnate around maybe 65% can at the most can grow up to 70% in next couple of years. But again, we are adding IBM products, which are of non-IML as of today. So that will stagnate somewhere around 65% to 70% is my guess. Unless a major shift is taken by a company like Asian Paints or who contribute sizable to our sales, this number cannot move much.
66% in value terms, right?
Yes, 66% in value term. 61.8% in quantity.
Last question on the CapEx, right, we have INR 250 crores of CapEx lined up for the next 2 years. At peak utilization, how much of sales this total CapEx can...
See, as of today, as I said, from 44,000 tonnes, we are coming to 54,000 tonnes. But the next growth of another INR 125 crores investment can take it beyond INR 70 crores -- 70,000 tonnes is my guess because this time, we are investing again on tool room and label manufacturing, more than INR 25 crores on that, which will be not directly contributing towards a capacity indirectly though it is contributing. So next INR 125 crores can add another 15,000 to 16,000 tonnes. So probably from 54, we may hit 70,000 tonnes.
From sales perspective or...
Sorry.
I was asking from a sales perspective, how much of sales we can pull up from 54,000 tonnes and at 70,000?
Yes. Sales means our average price today is around INR 230 per kg. So even if you take at the same 230, the capacity at 70,000 tonnes will be somewhere around INR 1,600 crores. But assuming 80% max capacity up to INR 1,200 to 1,250 crores turnover is possible.
Next question is from the line of Karan Bhatelia from Mastek.
So you mentioned last time that we started to supply our dispensing pumps to Himalaya brand. So how much is shipping out there?
No, not much is going to Himalaya. They were still asking some changes and adopting the new pack design they are coming out with. So the volumes are now not much. Our main suppliers are going to Wipro and another 4, 5 cosmetic companies in Bombay and neighboring areas.
Okay. And sir, what kind of capacity expansion are we looking at for the Asian paint plants in Mysore and Vizag.
Mysore and Vizag, we are expanding from around 3,500 tonnes. One second, let me check. So around -- already, we have expanded in last year and kept 5,400 tonnes per annum at Vizag -- at Mysore and 4,800 at Vizag. This will be, again, added probably to 6,300 and 6,000, respectively, by end of this year or probably in August, September itself. Some more machines are arriving. These are brownfield expansion. We'll be adding only machineries, not even molds, not even landed building. Building was already built last year to accommodate this expansion and molds and other material are already there. So these 2 expansions will go on by August itself.
Any update on the sippers?
On what?
On sippers, S-I-P-P-E-R-S.
Sippers, we are now bringing in some top of them, but No, none of the major brands have given their approvals. So we are also waiting on the wings. The moment any of these top brands are interested, we want to launch that.
Last question is from the line of Namish Gupta, an individual investor.
Audible?
Yes.
Yes. So I just want to understand our product. I don't have any questions. So what is this IBM, EBM and EML. Actually, I have tried to understand but couldn't get sir. So if you can just guide me in your layman, like how -- what is the broader difference in these 2?
Yes. See, injection molding is a process where containers without neck that is a big container like a paint container or a [ restaurant pack ] these are all made of injection molding process. There, the mold cost is very high. For example, a 20-liter mold cost for jar and cap will be more than INR 1 crore, the mold itself. So once the mode is made, you can only make that shape, you can't make any other shape. So investment in erection holding is very high, but you get very good accuracy.
Coming to EBM, that is extrusion blow molding , all your shampoo bottles, all your liquid edible oil packs of 1-liter and 2-liter where you have a handle and you have a small neck, these are all made of extrusion blow-molding. Here, the mold cost is very low, like, say, INR 5 lakhs to INR 10 lakhs. And the dimensional accuracy is also very pretty low, but you get different shapes variety of ships you can make in that. So products like shampoos and edible oil where more than the initial accuracy and finish, they look at economics. So they go for extrusion blow modeling.
The technology between injection molding and EBM is called IBM, that is injection blow molding. In this, the next part is made of injection molding. And the body part is grown by blow molding process. So the technology is in between IM and IBM. It gives both the advantages, accuracy of the neck for good capping and tamper evidence and light weight of blow molding because it is blown into kind of a balloon, the body of the bottle is lighter than a container. So you get the advantages of EBM and also advance of IM. That's why most of this -- but there is a limitation. You can't make this beyond 1 liter size. Less than 0.5 liter is more typical, maximum 1 liter.
So 100 grams, 50 grams, 200 grams, 300 grams, 600 grams tablet containers, paste, some vaseline, cosmetics, all these kind of products are used in IBM technology. Because there, you want a good finish, you want accurate capping and also average pricing. So that is where IBM comes in. So cosmetics, Food and FMCG and products of pharmaceutical tablets and powders, they all adopt IBM technology. That is where our company is entering. We are leaders in injection molding for last 30 years. And today, we are entering into IBM.
And EBM is a little phasing out of these kind of products because of its not so good looks and very bad dimensional accuracy. So EBM is still there for bigger containers of 1-liter oil, 2-liter oil or some of the shampoo bottles are still in EBM. They continue to be in EBM because beyond half liter or 0.8 liter, IBM technology is not still available. So anything above 0.8 liter or 1 liter, they still have to go with EBM technology. That is basically the 3 varieties of packaging.
And sir, 1 more thing. And what is this IML label?
IML label, that is in-mold labels. IML means in-mold labels. That is a label made pre-manufactured and by robotics, the label is kept inside the mold by a robot. And then molten plastic in a liquid form goes into the mold and it fuses the label to the body. And when the bottle or when the container is taken out, the label is already fused, so the decoration is completed. So there is no need to do any post operation like stickering or printing on the container. So that is the most advanced technology using robots. We are the first people to bring it to India more than 10 years ago.
Okay. So I mean you mean to say, I mean, once you have done this IML label, the manufacturer just has to, I mean, fuse their material in it and nothing else. No stickering, nothing else, correct?
Nothing. Nothing. It looks permanently stick to that, and it looks multicolor printing of world-class finish.
Okay. And sir, this -- I mean this QR coding can be done in IML and IBM both or just in IML?
No, it is done only on IML. IML can be used in IBM also. So the term is on the IML itself, not on the bottle.
As there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
Thanks, everybody, for participating in the conference and making it successful. Thanks to Nirmal Bang, in particular. Thanks, Abhishek, and thanks coordinators for your patience. Thank you very much. Have a good day. Bye.
Thank you. On behalf of Nirmal Bang Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.