Gulshan Polyols Limited — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

Gulshan Polyols reported a strong Q2 FY26, demonstrating a significant turnaround with 23% YoY revenue growth, 140% YoY EBITDA jump, and nearly 1,000% YoY PAT growth. The company is in a 'U-turn recovery mode,' driven by improved operational efficiencies and grain price corrections. While the grain processing segment faced challenges due to overcapacity, the company is optimistic about its recovery and expects to achieve ₹2,800 crores in revenue by FY27, supported by ongoing PLI receipts and additional ethanol allocation cycles.

Highlights

  • Revenue grew 23% YoY on the revenue front.

  • EBITDA jumped 140% YoY.

  • PAT showed a multiple growth, almost 1,000% YoY.

  • Company is in a 'U-turn recovery mode' with better margins quarter-on-quarter.

  • Received ₹5.34 crores PLI in October, to be factored into Q3 results.

Concerns

  • Grain processing division (starch business) was incurring losses and temporarily put on hold.

  • Overcapacity in the grain processing sector in India and competition from China are leading to skewed margins.

  • Borrowings have increased to ₹250 crores for working capital, up from ₹157 crores in March 2025, due to revenue growth and advance payments for FCRIs.

  • Lower than expected ethanol allocation (17.5 crore litres vs. 23 crore litres capacity) in the initial tender, expecting to make up in additional cycles.

Key financials

  1. Revenue Growth 23% +23%YoY
  2. EBITDA Growth 1.4% +140%YoY
  3. PAT Growth 10% +1,000%YoY

What they filed

Q1 FY27: revenue up 7.9%, net profit up 315.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue440 610 515 593 542 +23%627 +3%551 +7%640 +8%
EBITDA16 27 29 37 42 +163%85 +215%66 +128%85 +130%
Net profit1 7 7 13 16 +1500%41 +486%38 +443%54 +315%
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

  • Grain Processing (Starch)
    10% Revenue ContributionTemporarily on hold due to losses string Status
  • Mineral Processing
    23% EBITDA Margin23-24 % EBITDA Margin Range
  • Ethanol
    ₹17.5 Cr Allocation ESY 2025-26₹23 Cr Capacity

Capital allocation

medium confidence
  • Debt Debt disclosed
    See, we presently are borrowing working capital to the tune of Rs. 250 crores. And if you see our borrowing in March 2025 also, we, working capital borrowing stood at Rs. 157 crores versus turnover of around Rs. 2,020 crores. So you can see that we are the most conservative company looking into the borrowing.We always depend on our collection itself. But to fund sometime because of some seasons and requirement of raw material in the peak season, we need to enhance our working capital requirement. So from Rs. 157 crores, we now presently are RS.250 crores. And I think another Rs. 25 crores Rs. 30 crores, maximum Rs. 50 crores, we will not go beyond Rs. 250- Rs. 275 crores or Rs. 300 crores during this year at maximum.

Guidance & targets

Other Income

  • PLI from MP Government Other Income · Q3 FY26 · High confidence ₹5.34 crores
    Yes, so we have received a PLI of Rs. 5.34 crores in the month of October, which will get factored in in quarter three results. And this will be treated as other income in our P&L account.

    — Aditi Pasari

  • Pending PLI from MP Government Other Income · H2 FY26 · Medium confidence ₹14-15 crores
    Yes, so we have another from MP government, we have already received a sanction of about Rs.14 crores to Rs.15 crores, which will also we are expecting to come in the second half of this financial year.

    — Aditi Pasari

  • Pending PLI from Assam Government Other Income · H2 FY26 / next FY · Medium confidence ₹5 crores
    Apart from that, from the Assam government, we are looking at receiving another Rs. 5 crores from the NEETs, the North Eastern, the NEETs policy, which is about Rs. 5 crores from there. And the PLI will also start coming maybe in the second half of the year or first half of the next following year.

    — Aditi Pasari

Ethanol Raw Material Mix

  • Production from FCRIs Ethanol Raw Material Mix · ESY 2025-2026 · High confidence 40%
    So in the current tender, which is the ESY 2025-2026, so the OMCs have made it mandatory for the ethanol industry to produce 40% from FCRIs.

    — Aditi Pasari

  • Production from Maize Ethanol Raw Material Mix · ESY 2025-2026 · High confidence 45%
    So 40% will be from FCRIs and when I see the average between MP and Assam plant, 40% is FCI, about 45% is from maize and 15% is from DFG.

    — Aditi Pasari

  • Production from DFG Ethanol Raw Material Mix · ESY 2025-2026 · High confidence 15%

    — Aditi Pasari

Revenue

  • Total Revenue Revenue · FY27 · Medium confidence ₹2,800 crores
    So, we do look forward at 80% to 90% of capacity utilization in 2026, 2027 of all our divisions, which will definitely give us revenue of about Rs. 2,800 crores. So, that is our target.

    — Aditi Pasari

Capacity Utilization

  • Overall Capacity Utilization Capacity Utilization · FY27 · Medium confidence 80-90%
    I think the guidance for FY 2027 is working on 80%-90% capacity utilization, all subject to allocation from the tender.

    — Aditi Pasari

  • Overall Capacity Utilization Improvement Capacity Utilization · FY26 · Medium confidence 20%
    No, we are expecting an improvement by at least 20% in FY 2026. Yes.

    — Aditi Pasari

Revenue Growth

  • Revenue Growth Revenue Growth · FY26 · Medium confidence 20%
    We are looking at a 20% revenue growth from last year, from FY '25.

    — Aditi Pasari

Working Capital

  • Maximum Working Capital Borrowing Working Capital · Current FY · Medium confidence ₹300 crores
    And I think another Rs. 25 crores Rs. 30 crores, maximum Rs. 50 crores, we will not go beyond Rs. 250- Rs. 275 crores or Rs. 300 crores during this year at maximum.

    — Rajiv Gupta

What to watch in Q3 FY26

PLI from MP Government (pending)

H2 FY26
Current ₹14-15 crores sanctioned, awaiting receipt
Target Receipt of ₹14-15 crores

Why it matters

Significant non-operating income that will boost profitability.

Yes, so we have another from MP government, we have already received a sanction of about Rs.14 crores to Rs.15 crores, which will also we are expecting to come in the second half of this financial year.

Risks & concerns

  • Overcapacity and competition in grain processing

    medium

    Overcapacity in India and competition from China are leading to skewed margins in the grain processing business, necessitating temporary halt of starch production.

    Management acknowledged

  • Working capital increase due to advance payments for FCRIs

    medium

    Shift to 40% FCRIs for ethanol production requires advance payments, increasing working capital requirements and borrowings.

    Management acknowledged

  • Lower initial ethanol allocation from OMCs

    low

    Received 17.5 crore litres allocation against 23 crore litres capacity, but management expects to make up the difference in additional tender cycles.

    Management downplayed

Q&A highlights

7 direct
Accounting treatment of PLI Direct
Yes, so we have received a PLI of Rs. 5.34 crores in the month of October, which will get factored in in quarter three results. And this will be treated as other income in our P&L account.

Clarifies how significant PLI income will be recognized, impacting profitability.

Asked by Subh Sharma

Pending PLI incentives from state governments Direct
Yes, so we have another from MP government, we have already received a sanction of about Rs.14 crores to Rs.15 crores, which will also we are expecting to come in the second half of this financial year.Apart from that, from the Assam government, we are looking at receiving another Rs. 5 crores from the NEETs...

Provides visibility on future non-operating income streams from government incentives.

Asked by Subh Sharma

Nature of government incentives (PLI vs. investment subsidy) Direct
It will be referred as a PLI only. The Production Linked Incentive. It will be part of the other operating revenue.

Confirms the classification of incentives as PLI and its impact on operating revenue.

Asked by Sushil Kumar

Raw material mix for ethanol production Direct
So in the current tender, which is the ESY 2025-2026, so the OMCs have made it mandatory for the ethanol industry to produce 40% from FCRIs. ... So 40% will be from FCRIs and when I see the average between MP and Assam plant, 40% is FCI, about 45% is from maize and 15% is from DFG.

Details the mandated and actual raw material composition, crucial for understanding input costs and supply chain.

Asked by Sushil Kumar

Jump in borrowings and working capital management Direct
So basically, the requirement which has jumped is basically because of working capital requirement, not because of the Term loan, because Term loan is already, we have availed in 2022 and 2023.So the jump was only to fund our working capital requirement because of the jump into revenue also.

Explains the reason for increased debt, linking it to revenue growth and the shift to advance payments for FCRIs, which impacts cash flow.

Asked by Sherwani Mishra

Recovery of the grain processing segment Partial
So, you see, we had mentioned in the last call that the grain processing division was a starch business, which was incurring losses and bringing the grain processing division down, you know. So that we have temporarily put the division on hold because we were unable to even cover the variable cost in that particular division. So that has helped in bringing the losses down and, you know, making the division into positive.

Addresses the underperforming segment, its temporary halt, and the expectation of recovery in the second half of the year due to raw material price correction.

Asked by Saurav Shah

Sustainability of mineral processing margins Direct
This is our most stable business actually. It is our oldest business, the mineral processing business. It's almost a 40-year-old division for us. So, yes, definitely, we are maintaining the margins in this business. ... I think 23% to 24% is a reasonable margin for this division. We are really maintaining this.

Provides confidence in the stability and margin profile of a key, long-standing business segment.

Asked by Maitri Shah

Ethanol allocation and making up for shortfalls Direct
No, the OMC has not released its entire requirement. So, they do require about 200 crore liters more than what was released in this tender. So, for which they will be coming up with additional cycles.

Indicates potential for higher ethanol sales in future tenders, crucial for capacity utilization and revenue targets.

Asked by Sushil Kumar

2 min read 6 chapters

Detailed narrative

Strong Financial Performance and Turnaround

Gulshan Polyols reported a robust Q2 FY26, marking a significant turnaround. The company achieved a 23% year-on-year growth in revenue. This strong top-line performance translated into a substantial 140% year-on-year jump in EBITDA. Profit After Tax (PAT) saw an even more impressive surge, growing by almost 1,000% year-on-year, indicating a strong bottom-line recovery and improved operational efficiencies.

PLI and Government Incentives

The company is benefiting from government Production Linked Incentives (PLI). A PLI of ₹5.34 crores was received in October and will be recognized as other income in the Q3 FY26 results. Additionally, Gulshan Polyols expects to receive another ₹14-15 crores from the MP government and ₹5 crores from the Assam government in the second half of the current financial year or early next year, further bolstering its financial position.

Ethanol Business Dynamics and Raw Material Strategy

The ethanol segment is adapting to new mandates, with OMCs requiring 40% of ethanol production from FCRIs (Food Corporation of India rice) for ESY 2025-2026. The company's raw material mix averages 40% FCI, 45% maize, and 15% DFG across its MP and Assam plants. Current maize prices are around ₹21. While the initial ethanol allocation for ESY 2025-2026 was 17.5 crore litres against a capacity of 23 crore litres, management anticipates making up the shortfall in upcoming additional tender cycles, as OMCs still require about 200 crore litres more.

Grain and Mineral Processing Segments

The grain processing division, particularly the starch business, had been incurring losses and was temporarily put on hold, contributing to the overall positive results this quarter. Management expects this division to recover and restart production in the second half of the calendar year due to corrections in raw material prices. The mineral processing business, a 40-year-old segment, continues to be stable, maintaining EBITDA margins in the 23-24% range, even if it means losing some customers to preserve profitability.

Working Capital and Borrowings

The company's working capital borrowings have increased to ₹250 crores, up from ₹157 crores in March 2025. This increase is primarily attributed to funding higher revenue growth and the shift to advance payments for 40% of raw materials sourced from FCRIs. Management stated that working capital borrowings are not expected to exceed ₹300 crores during the current financial year, indicating a controlled approach to funding growth.

Outlook and Capacity Utilization

Gulshan Polyols targets a revenue of ₹2,800 crores for FY27, based on an expected 80-90% capacity utilization across all divisions. For FY26, the company projects a 20% revenue growth over FY25 and anticipates at least a 20% improvement in capacity utilization. The management expressed confidence in turning out strong numbers quarter-on-quarter, driven by operational efficiencies and favorable market conditions.

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