Knack Packaging posts 52.52% revenue surge in Q2FY27

INDIA – Knack Packaging Limited has reported its highest-ever quarterly revenue of ₹2,947.57 million (US$31.1 million) for the second quarter of fiscal year 2027, a 52.52% year-on-year increase from ₹1,932.57 million (US$20.58 million), driven largely by price revisions rather than volume expansion.

The Ahmedabad-based manufacturer of printed and laminated woven polypropylene bags saw its profit after tax rise 21.24% year-on-year to ₹250.20 million (US$2.64 million). However, EBITDA margins contracted to 16.35% from 19.2%, reflecting industry-wide input cost pressures. 

The decline was attributed to global input cost headwinds, specifically crude oil-driven polymer price inflation and freight cost surges linked to Red Sea disruptions. 

As an exporter to more than 75 countries, Knack Packaging noted that customer pricing revisions to pass on these increased costs are under way, with adjustments expected to reflect in realisations from the third quarter onwards.

Volume Growth Trails Revenue Expansion

During the earnings call held on 28 October 2026, management clarified that the significant revenue jump was primarily driven by price increases rather than volume expansion. 

Sales volume stood at 11,252 metric tons, representing a 13% year-on-year increase from 9,927 metric tons. 

This contrasts sharply with the 52.52% revenue growth, indicating that raw material price inflation was the dominant factor in top-line expansion. 

Plant utilisation remains high at approximately 90 to 91%, and the company added 5,040 metric tons of capacity in August 2026, which is currently ramping up.

Mexico Joint Venture Loss Impacts Consolidated Profit

The consolidated profit after tax was impacted by a loss from the Mexico joint venture, Sayem Knack S.A. de C.V., which is currently in its peak scale-up investment phase. 

The company holds a 50% interest in this entity, which contributed a net loss of ₹26.15 million (US$275,800) to consolidated results in the quarter. 

The Mexico joint venture loss amounted to ₹60.60 million (US$639,200) for the half-year period.

New Animal Nutrition Contract Secures Long-Term Revenue

In its investor presentation, the company highlighted a significant new order and contract renewal from an international customer, described as one of the largest private corporations globally in animal nutrition. 

The deal involves the supply of approximately 60 million bags annually with an approximate order value of ₹1,500 million (US$15.8 million) per annum, renewed for three years through December 2028. 

The company reported return on capital employed at 32.31% and return on equity at 21.29% for the half-year, with debt-equity ratio improving sharply to 0.26 times from 0.68 times, reflecting the strengthened balance sheet following its initial public offering.

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