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    Modi Naturals

    519003
    Fast Moving Consumer Goods·29 May 2025
    Management Summary

    Modi Naturals delivered a strong Q4 and FY25 performance, achieving significant growth across revenue and profitability metrics, driven by a strategic revival of its business operations. The company successfully met its ambitious targets, with the Ethanol division showing robust progress and the Consumer and Bulk divisions demonstrating recovery and planned growth. Improved operational efficiencies and strategic marketing investments underpinned this strong financial turnaround.

    Highlights

    8

    • FY25 marked a landmark year of reversal, resurgence, and renewed growth, with all ambitious targets for Revenue, EBITDA, and PAT met.

    • Consolidated Revenue from operations for Q4 FY25 grew 58.5% YoY to Rs. 189.9 crore.

    • Consolidated EBITDA for Q4 FY25 grew 189% YoY to Rs. 16.1 crore, with EBITDA margins at 8.5%.

    • Consolidated PAT for Q4 FY25 grew 550% YoY to Rs. 8.2 crore.

    • For FY25, consolidated Revenue grew 65.8% YoY to Rs. 662.9 crore, and EBITDA grew 517% to Rs. 56 crore (8.4% margin).

    • FY25 PAT turned positive at Rs. 31 crore, compared to a loss of Rs. 1.4 crore in FY24.

    • The Ethanol division's first phase (130 KLPD) is operating optimally, and the second phase (180 KLPD) is on track for Q3 FY26 commissioning, bringing total capacity to 310 KLPD.

    • Net working capital days improved significantly to 66 days in March '25 from 111 days in March '24.

    Key financials

    Metrics

    13

    Periods

    3

    Headline

    1
    • Net Working Capital Days (March '25)
      66 days

    Q4 FY25

    4
    • Revenue from Operations
      ₹189.9 Cr
      YoY+58.5%
    • EBITDA
      ₹16.1 Cr
      YoY+1.9%
    • EBITDA Margin
      8.5%
    • PAT
      ₹8.2 Cr
      YoY+5.5%

    FY25

    8
    • Revenue from Operations
      ₹662.9 Cr
      YoY+65.8%
    • EBITDA
      ₹56 Cr
      YoY+5.2%
    • EBITDA Margin
      8.4%
    • PAT
      ₹31 Cr
    • Cash Flow from Operations
      ₹48.8 Cr

    Segment breakdown

    • Consumer Division₹48.5 Cr25.5%
    • Bulk Division₹56.1 Cr29.5%
    • Ethanol Division₹85.3 Cr44.9%
    Donut· Share of Revenue (Q4 FY25)

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹250 crores

    Equity part for both phases funded through internal accruals; debt of Rs. 105 crores for Phase 1 and Rs. 88 crores for Phase 2.

    Debt

    1.2x EBITDA

    Guidance & targets

    9
    CategoryTargetPriority
    Revenue
    Consolidated Revenue
    ₹850-880 crores
    		High
    Profitability
    Consolidated EBITDA
    ₹80-85 crores
    		High
    Profitability
    Consolidated PAT
    ₹42-48 crores
    		High
    Capacity
    Ethanol Phase 2 Commissioning
    Commence by Q3 FY26
    		High
    Capacity
    Total Ethanol Production Capacity
    310 KL per day
    		High
    Utilization
    New Ethanol Capacity Utilization
    50-60% in Q3, 90% in Q4
    		Medium
    Margin
    Ethanol Division EBITDA Margin
    12-15%
    		High
    Margin
    Branded Division EBITDA Margin
    8.5-9%
    		High
    Ad Spend
    Above-the-Line Advertising Spend
    Double FY25 spend
    		High

    Ethanol Phase 2 Capacity Commissioning

    By Q3 FY26
    CurrentOn track for Q3 FY26
    TargetCommencement of 180 KLPD capacity

    Why it matters

    This is a significant capacity addition that will drive future revenue and profitability for the Ethanol division.

    We are now progressing rapidly with the second phase of our ethanol facility, which is on track to commence by Q3 FY '26. This expansion will add 180 KL per day to our current capacity, bringing our total ethanol production capacity to 310 KL per day.

    How to verify

    guidance_and_targets[category='Capacity'][metric='Ethanol Phase 2 Commissioning']

    Risks & concerns

    4
    RiskSeverity

    Input cost volatility for Consumer division

    Input cost volatility and macroeconomic challenges posed headwinds for the Consumer division in the past. — Management acknowledged

    medium

    Government-imposed oil price reductions and inventory corrections for Bulk division

    These were past challenges for the Bulk division but are now behind the company, with a strong revival in business activity. — Management acknowledged

    low

    Quarterly seasonality in Ethanol EBITDA due to agri-based raw material prices

    Ethanol EBITDA margins are expected to be 12-15%, but with quarterly seasonality due to agri-based raw material prices. — Management acknowledged

    medium

    Initial operational challenges during ethanol plant rollout

    The company faced initial challenges during the plant's operational rollout but swiftly addressed them, and the plant is now running at optimal capacity. — Management acknowledged

    low

    Q&A highlights

    8

    “As far as the capacity utilization goes, we are running at full capacity utilization currently. And with the expansion coming in, we are expecting higher capacities later in the year. ... In the Consumer division, the run rate of growth has increased. So, if you see over the quarters, we have grown Q1 at 3%, Q2 at almost nil, Q3, we started ramping up 7.7 and Q4 at 15.2% growth. And Q1, we are expecting further growth increase.”

    Clarifies the current operational status of the ethanol plant and outlines the growth trajectory and drivers for the Consumer division in the near term.

    asked by Gunit Singh

    2 min read6 chapters

    Detailed Narrative

    01

    Strong FY25 Performance and Strategic Turnaround

    Modi Naturals reported FY25 as a landmark year, achieving a significant turnaround with consolidated revenue growing 65.8% to Rs. 662.9 crore. EBITDA surged 517% to Rs. 56 crore, resulting in a positive PAT of Rs. 31 crore, a substantial improvement from a loss of Rs. 1.4 crore in FY24. This performance is attributed to the company's agility, relentless focus on operational efficiency, and a favorable demand environment across all divisions, successfully meeting ambitious targets set for the year.

    02

    Ethanol Division: Capacity Expansion and Growth Outlook

    The Ethanol division is a key pillar of Modi Naturals' long-term growth strategy. The first phase of the ethanol plant (130 KLPD) was commissioned in November '23 and is currently operating at optimal capacity. The company is rapidly progressing with the second phase, which will add 180 KLPD, bringing the total capacity to 310 KLPD, expected to commence by Q3 FY26. Management anticipates 50-60% utilization for the new capacity in Q3, gradually increasing to 90% in Q4, with sustainable EBITDA margins of 12-15%.

    03

    Consumer Division: Marketing Investment and Distribution Expansion

    The Consumer division demonstrated ramping growth, with Q4 FY25 revenue increasing 15.2% YoY. Modi Naturals significantly enhanced its marketing spend, onboarding Karishma Kapoor as Brand Ambassador, and plans to double its above-the-line advertising in FY26. This, coupled with expanded distribution into modern trade and e-commerce platforms, aims to drive further growth and maintain EBITDA margins of 8.5-9% for the division, aligning with evolving consumer preferences for quality and health.

    04

    Bulk Division: Recovery and Improved Profitability

    After two challenging years marked by government-imposed oil price reductions and inventory corrections, the Bulk division has shown a strong revival. Q4 FY25 EBITDA turned positive at Rs. 0.9 crore, compared to a loss of Rs. 2.3 crore in Q4 FY24. This recovery is driven by softening commodity prices, improved monsoon, fresh crop inflows, and favorable macroeconomic trends, leading to a marked improvement in EBITDA and sustainable profitability.

    05

    Financial Health: Improved Working Capital and Debt Management

    Modi Naturals significantly improved its financial health, with cash flow from operations rising to Rs. 48.8 crore in FY25 from a negative Rs. 6.8 crore in FY24. The net working capital days were reduced to 66 days in March '25 from 111 days in March '24, reflecting strict management practices and efficient inventory. The debt-to-equity ratio also improved to 1.22 in FY25 from 1.87 in FY24, with the second phase of ethanol expansion funded through internal accruals and a secured Rs. 88 crore long-term debt.

    06

    FY26 Consolidated Guidance and Strategic Focus

    For FY26, Modi Naturals projects consolidated revenue in the range of Rs. 850-880 crore, driven by increased volumes across all portfolios and higher ethanol capacity utilization. EBITDA is targeted at Rs. 80-85 crore, supported by improved product mix and operational efficiencies. PAT is expected to be Rs. 42-48 crore, aided by cost rationalization, margin expansion, and improved working capital management, indicating a continued focus on sustainable growth and profitability.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.