Knack Packaging IPO: PAT Up 4.7x in Three Years, Priced at 22x on a Post-Issue Base

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1 — At a Glance

Knack Packaging arrives at the market with a ₹439.50 crore book-built IPO and a profit line that has quadrupled in three years. PAT moved from ₹19.87 crore in FY23 to ₹92.72 crore in FY26 — a 4.7x climb. Total income grew over the same window from ₹518.47 crore to ₹843.77 crore, a far gentler 1.6x. The gap between those two multiples is the entire story: profit is rising much faster than the top line, and the EBITDA margin tells you where it came from — 15.4% in FY24 to 20.4% in FY26.

The company makes woven polypropylene bags. Not glamorous. Yet it holds roughly 10.1% of India’s flexible bulk PLWPP bag market and ships to 71 countries, with exports at 56.30% of FY26 revenue. The issue is priced at about 22.4x FY26 earnings on a post-issue diluted base, against a peer median near 28x.

The thing worth holding in view: a 4.7x profit jump on a 1.6x revenue jump is margin doing the heavy lifting, and margin gains are harder to repeat than they are to celebrate. The fresh-issue money — ₹320 crore — is earmarked for a single new plant in Mehsana.

A packaging company that grew its bottom line faster than its top line, now asking the public market to fund its next factory. The question is what happens after the margin runway ends.

2 — Introduction

Knack Packaging was incorporated in 2013, though the dump credits the underlying business with a legacy spanning over two decades. It describes itself as an integrated, export-led packaging solutions provider — which, decoded, means it makes printed and laminated woven polypropylene bags and does the printing, design, and cylinder development in-house rather than farming it out.

The customer list reads like a grocery and agri-input directory: Baba Agro Food, Drools Pet Food, KRBL, DCM Shriram domestically, and Cargill, Cristo S.A., and Repi Soap and Detergent internationally. The bags carry powders and granules from 5kg to 50kg — rice, dal, pet food, cement, fertilizer, charcoal.

Two recent moves sit in the record. First, a joint venture — Sayem Knack, formed with SACOS Y Empaques Internacionales — which commenced commercial operations on April 6, 2026, aimed at the Latin America and US markets. Second, a 19-for-1 bonus issue in May 2025, which we will return to, because it quietly rearranged the share count.

Customer retention improved from 67.27% in FY24 to 88.32% in FY26 — a number management points to as evidence the relationships stick.

3 — Business Model: WTF Do They Even Do?

They make bags. Strong, printed, laminated, woven polypropylene bags, the kind that hold 25kg of rice without tearing in a warehouse. The company is, by its own telling, the first in India and Asia to integrate a laser-cut, easy-open feature into PLWPP pinch-bottom bags — a sentence that sounds like a minor convenience and is, in this industry, a genuine differentiator, because the alternative is customers wrestling with scissors.

The model is B2B2C: Knack prints the brand’s packaging, the brand fills it with product, the consumer buys the product and ignores the bag entirely. The bag’s job is to look good on a shelf, resist counterfeiting, and not split open. Knack’s job is to make 13,379 different SKUs of it, having developed over 73,000 printing cylinders by May 2026.

Here is the tension hiding in a tidy business. The product is, at bottom, a commodity input — woven plastic. The way Knack escapes commodity pricing is the printing, the customization, the add-ons (window cuts, back-seam construction, zig-zag edges). It has been recognized as a Two Star Export House by the Government of India, which is the kind of title that does real work in customs queues and very little on a balance sheet.

The export tilt is the defining feature: 56.30% of FY26 revenue came from outside India. That is a strength when the rupee cooperates and a concentration risk the rest of the time. A bag-maker living off exports has bet that the world keeps shipping powders in plastic — a bet that has paid, given the 4.7x profit run, but one tied to freight rates, trade policy, and polypropylene prices it does not control.

Does a 10.1% market share in flexible bulk bags make a moat, or just a comfortable spot in a crowded shed?

4 — Financials Overview

Figures are restated consolidated, in ₹ crore. The latest period is FY26 (year ended March 31, 2026).

Each line grows faster than the one above it. Income rose 12.9%,