ZUARI Q1 FY27 earnings call.
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Revenue
₹615 Cr
verified against source
Revenue YoY
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reported change
EBITDA
Pending
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Where this quarter sits.
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What the record says.
Zuari Industries reported Q1 FY27 results with mixed performance. Sugar sales volume surged 29% YoY to 4.7 lakh quintals driven by higher domestic quota allocation and improved realizations at Rs 4,116/quintal. However, EBITDA declined 15% YoY to Rs 31.3 crore on standalone basis due to 8% increase in SAP (cane price) to Rs 400/quintal in Uttar Pradesh. The company is executing a deleveraging strategy with external debt reduced to Rs 1,888 crore from Rs 1,991 crore, supported by repatriation from the Dubai project (Rs 142 crore received, Rs 900 crore guided for FY27). Consolidated PAT turned marginal positive at Rs 0.5 crore versus loss of Rs 4.8 crore. Strategic investments portfolio stood at Rs 4,223 crore (up 15% QoQ). The real estate development management pipeline reached Rs 6,000 crore with GDV of Rs 4,900 crore, targeting Rs 10,000 crore. Sugar prices have risen 10% over the past month to record highs, which should support upcoming quarters. Ethanol business faces headwinds from static realizations and overcapacity in the sector, with management putting expansion plans on hold. Risk includes unresolved ethanol export fee case of Rs 57 lakh, delayed land monetization in Goa, and geopolitical impact on Simon India's order book.
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Guidance to track
- Rs 142 crore already received in July-August; balance of ~Rs 758 crore expected during current fiscal year. Customer collections (~40-45% of top line) being pursued post completion certificate.
- Currently at Rs 4,900 crore GDV (50% of target). Focus on Hyderabad (Gangotri Trivita, 2.8mn sq ft) and Bangalore (14.8 acre plotted development, 15-18 month cycle).
- Expected to reduce finance cost by Rs 100-110 crore annually based on average borrowing cost of 9.73%. Debt reduced to Rs 1,888 crore from Rs 1,991 crore in Q4.
Risks flagged
- Government rumored to be tightening rules around ethanol diversion from sugar; management declined to comment on policy rumors. Static ethanol realizations continue to weigh on margins.
- Rs 1,800 crore worth of offers received against Rs 50 crore tender for ethanol; actual capacity may have reached 2,000 crore liters. Capex plans for 2,000 KLPD expansion put on hold.
- Goa assembly passed a law and circle rates were substantially enhanced, making land deals complex. Monetization plans put on hold; deleveraging relying on other avenues.
- Division currently operating with minimal expenditure (maintenance, ICD servicing). Management to decide on revival or exit by end of FY27.
Key quotes
- The bulk of this item is coming from the performance of Zuari Agrochemicals Limited. Zuari Agrochemicals has a joint venture with OCP Morocco called ZMPPL and ZMPPL holds equity in Paradeep Phosphates. So the underlying asset is really Paradeep Phosphates.
- We have put our capex plans on hold but tomorrow if the country decides to roll up the policies and increase ethanol blending and we have flex fuel vehicles and what not, we again can see whether we want to grow our business both organically and inorganically.
- The good news is that the prevailing prices of sugar are quite high and it's easy for anybody to do some math around what would it do to the numbers of sugar companies. We also hear that the sugar cane crop particularly in Uttar Pradesh is doing quite well.
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