EID Parry — Q3 FY25 earnings call

Call held 12 Feb 2025

Management summary

EID Parry reported a mixed Q3 FY25, characterized by robust growth in the Distillery and Consumer Products segments, offset by a sharp downturn in the Refinery business due to compressed global spreads. The sugar business saw lower crushing volumes as Tamil Nadu operations shifted to the fourth quarter, though recovery rates improved. Management is focused on strategic asset monetization and transitioning the distillery business to a multi-feed model to mitigate feedstock availability risks.

Highlights

  • Distillery segment revenue surged 64% YoY to ₹290 crores, driven by ethanol volumes of 304 lakh litres.

  • Consumer Products Group (CPG) turnover grew 72% YoY to ₹236 crores, with non-sugar branded sales reaching 37% of the mix.

  • Refinery segment faced significant headwinds, reporting a loss of ₹18 crores on revenue of ₹915 crores (down 43% YoY).

  • Sugar crushing volumes declined to 12.7 lakh metric tons from 17.8 lakh metric tons YoY due to shifting Tamil Nadu operations to Q4.

  • Sugar recovery improved to 10.78% compared to 10.14% in the corresponding quarter of the previous year.

  • Management announced the ongoing sale of ~6 lakh shares in Indian Potash Limited, valued at approximately ₹180 crores.

  • Total alcohol capacity stands at 582 KLPD, with 120 KLPD being multi-feed (grain/molasses) capable.

Concerns

  • Feedstock availability in Tamil Nadu and Andhra Pradesh

Key financials

  1. Sugar Revenue ₹392 Cr -10%YoY
  2. Distillery Revenue ₹290 Cr +64%YoY
  3. Refinery Revenue ₹915 Cr -43%YoY
  4. CPG Turnover ₹236 Cr +72%YoY

What they filed

Q1 FY27: revenue down 3.6%, net profit down 217.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue755 848 814 760 754 −0%770 −9%846 +4%733 −4%
EBITDA-41 -34 88 -31 -50 −22%-41 −21%72 −18%-48 −55%
Net profit28 -146 -232 -28 -286 −1121%-54 +63%-340 −47%-89 −218%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Sugar
    12.7 lakh mt Crushing Volume10.8% Recovery Rate₹38.31/kg Avg Selling Price
  • Distillery
    304 lakh litres Ethanol Sales₹65.83/litre Price Realization
  • Refinery
    ₹-18 Cr PBT₹6 Cr EBITDA1.87 lakh mt Sales Quantity
  • Nutra
    ₹43 Cr Consolidated Revenue

Guidance & targets

Margin

  • CPG EBITDA Margin Margin · by end of decade · Medium confidence high single-digit
    we aspire to exit this decade with a much larger business than where we are today with a high digit percentage EBITDA, given it's a food F&B business.

    — Muthiah Murugappan, Whole Time Director

Other

  • Indian Potash Limited Stake Sale Value Other · FY25 · High confidence ₹180 crores
    This transaction value will be around INR 180 crores and something, Rajesh. But as of now, we are in the process of selling it.

    — Y. Venkateshwarlu, CFO

Volume

  • Tamil Nadu Yield Improvement Volume · upcoming year · Medium confidence 1.5 to 2 tons per acre
    We would be positive about a yield improvement anywhere between 1.5 tons to 2 tons on an average in Tamil Nadu.

    — Abdul Hakeem Ashiq, COO Sugar and Biofuel

Capacity

  • Multi-feed Ethanol Capacity Capacity · Current · High confidence 120 KLPD
    The total ethanol capacity is 582 KLPD. Out of that 120 KLPD is basically the multi-feed.

    — Y. Venkateshwarlu, CFO

Risks & concerns

  • Feedstock availability in Tamil Nadu and Andhra Pradesh

    high

    Competitive crop pressure and weather issues have led to lower crushing volumes in these states.

    Management acknowledged

  • Global refinery spreads and external environment

    medium

    Refinery margins are expected to remain challenging in Q4 FY25 due to global market conditions.

    Management acknowledged

  • Ethanol pricing policy

    medium

    Lack of clarity on price increases for ethanol derived from B-heavy molasses and syrup impacts distillery margins.

    Both acknowledged

Areas of evasion (2)

  • Specific timelines for refinery partnerships
  • Detailed breakdown of FMCG profitability vs sugar alcohol

Q&A highlights

2 direct
Capital Allocation and Coromandel Dividend Partial
I guess when the standalone business is loss making, it was difficult to pass-on that dividend... once we see those days, obviously, in terms of the dividend... we would be in a position to start passing through again.

Investors are concerned about the lack of dividend pass-through from the highly valuable Coromandel stake to EID Parry shareholders.

Asked by Manish Beria

Refinery Business Viability and Strategic Review Direct
On the refinery front, yes, we do realize that we need to strengthen the business model perhaps by way of partnerships... these conversations are certainly on, but they are taking a fair amount of time.

The refinery segment is currently a drag on profitability, and management is actively seeking partnerships to de-risk the model.

Asked by Rajesh Majumdar

Ethanol Pricing and Feedstock Diversion Direct
In terms of feedstock between B, C and ethanol, we continuously keep evaluating on a very live basis as a system, and we choose to produce what would be margin accretive to the business.

Highlights the company's flexibility to switch between sugar and ethanol production based on government pricing and market profitability.

Asked by Rajkumar Vaidyanathan

2 min read 5 chapters

Detailed narrative

Sugar Segment: Recovery Gains Amidst Volume Pressure

The sugar segment saw a decline in crushing volumes to 12.7 lakh metric tons, down from 17.8 lakh metric tons YoY, primarily because Tamil Nadu operations were shifted to the fourth quarter. Despite lower volumes, the recovery rate improved significantly to 10.78% from 10.14%. However, the landed cost of cane increased to ₹3,899 per metric ton due to higher Fair and Remunerative Price (FRP) impacts, which rose from ₹3,152 to ₹3,400 for the current season.

Distillery Outperformance Driven by Ethanol

The distillery segment was a major growth driver, with revenue increasing 64% YoY to ₹290 crores. Ethanol sales volume nearly doubled to 304 lakh litres compared to 159 lakh litres in the previous year. Price realization also improved to ₹65.83 per litre from ₹62.82. The company is strategically moving toward a multi-feed model, with 120 KLPD of its 582 KLPD total capacity now capable of processing grain (rice/maize) or molasses.

Refinery Segment Faces Margin Squeeze

The refinery business reported a challenging quarter with revenue falling to ₹915 crores from ₹1,597 crores YoY. The segment posted a PBT loss of ₹18 crores, a sharp reversal from the ₹17 crores profit in the prior year. Management attributed this to lower global spreads and a deferment of shipment volumes from December to January. They expect Q4 to remain challenging but anticipate a recovery in global premiums in the next financial year.

CPG Segment: Scaling Branded Staples

The Consumer Products Group (CPG) achieved a turnover of ₹236 crores, representing over 70% growth. Branded staples contributed ₹87 crores to this total. Management is focusing on the four southern states for distribution expansion and aims for high single-digit EBITDA margins by the end of the decade. Currently, non-sweetener branded products account for approximately 37% of total branded sales.

Strategic Asset Monetization: IPL Stake Sale

Management confirmed they are in the process of selling approximately 6 lakh shares of Indian Potash Limited (IPL), an unlisted entity. The transaction is expected to yield around ₹180 crores. This move is part of a broader strategy to unlock value from non-core assets and strengthen the standalone business's balance sheet, which has been under pressure from refinery losses and high borrowing costs.

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