Gulshan Polyols Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Gulshan Polyols reported a strong Q3 FY26, with significant growth in revenue and PAT, driven by the robust performance of its ethanol segment and favorable raw material prices. Consolidated EBITDA margins expanded to 13.7%. While the grain processing segment faced headwinds due to overcapacity in starch, the company is implementing mitigation strategies and focusing on future growth in specialty chemicals. No new capex is planned until FY28, with a focus on cash flow and operational efficiency in the interim.

Highlights

  • Q3 FY26 consolidated EBITDA margins stood at 13.7%, and for the nine-month period, it was 9.4%, consistent with stated guidance.

  • PAT grew by 504% YoY to ₹40.9 crores in Q3 FY26, reflecting improved operating performance and margin recovery.

  • Revenue for Q3 FY26 stood at ₹626.7 crores, primarily driven by ramp-up in the ethanol segment.

  • Received ₹21.8 crores from MPIDC towards state and industry promotion incentives, strengthening cash flows.

  • Ethanol segment delivered its strongest results to date, with sustainable EBITDA margins of 12-13% per litre expected for future quarters.

Concerns

  • Grain processing segment faced headwinds due to industry-wide overcapacity in starch, leading to stressed margins.

  • Starch prices remain under pressure, though sorbitol and fructose segments are still EBITDA positive.

  • Lower ethanol allocations than applied for due to overcapacity of ethanol production in the country, though management expects allocations to increase.

Key financials

3 periods

Headline

  • Revenue
    ₹626.7 Cr
  • EBITDA
    ₹85.6 Cr
    YoY +211%
  • EBITDA Margin
    13.7%
  • PAT
    ₹40.9 Cr
    YoY +504%

Q3 FY26

  • Net Subsidy Benefits
    ₹16.44 Cr

9M FY26

  • EBITDA Margin
    9.4%

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

  • Ethanol
    ₹1,200 Cr Orders (ESY 25 & 26)₹17 Cr Litres Ordered (ESY 25 & 26)₹26 Cr Production Capacity₹1,400 Cr Current Year Revenue Contribution0.25 % of ethanol revenue By-product Revenue (DDGS)70 % of capacity Current Allocation₹9 EBITDA per litre (sustainable)10% Operational Margins (FY26)
  • Grain Processing
    ₹800 Cr Current Year Revenue Contribution60% Revenue Mix - Sorbitol & By-products30% Revenue Mix - Starch20% Revenue Mix - Fructose
  • Mineral Chemical
    — Performance
  • Overall
    65% Current Capacity Utilization (Ethanol & Grain Processing)60% Revenue Mix - Ethanol

Capital allocation

high confidence
  • Capex Capex disclosed
    • Future capex in specialty chemical space with value-added products and import substitutes
    Any fresh capex will come in FY28. In FY27 we will be in a planning stage for the next set of capex, which will come in FY28.
  • Debt Debt disclosed Cost 7.2%
    Working capital borrowing is around 7.5% from three banks from where we have inducted our working capital requirement. And now over the last two months, it's further reduced to 7.25% working capital interest, i.e., ROI which we are borrowing from the banks. ... Debt equity ratio is 0.6.
  • Liquidity Liquidity disclosed Received ₹21.8 crores from MPIDC towards state and industry promotion incentives, strengthening cash flows.
    I would like to highlight that the company has received a total amount of Rs. 21.8 crores from MPIDC towards state and industry promotion incentives related to our Madhya Pradesh operations. This receipt strengthens our cash flows

Guidance & targets

Profitability

  • Consolidated EBITDA Margins Profitability · FY26 · High confidence 9-10%
    For Q3 FY26, our consolidated EBITDA margins stood at 13.7%, and for the nine-month period, it was 9.4%, consistent with our stated guidance range of 9% to 10%.

    — Aditi Pasari

  • Consolidated EBITDA Margins Profitability · FY27 · High confidence 9-10%
    Consolidated margins, we are expecting in the range of 9% to 10%. For FY27 as well, yes.

    — Aditi Pasari

  • Ethanol Operational Margins Profitability · FY26 · High confidence 10-11%
    ethanol segment delivering 10% to 11% operational margins.

    — Aditi Pasari

  • Ethanol Segment Sustainable EBITDA per litre Profitability · future quarters · High confidence Rs. 9-10
    The adjusted EBITDA per litre in this quarter in ethanol was Rs. 9. Is this sustainable for the future quarters? Yes, it is very much sustainable as there is ease off on the raw material prices which has improved the overall margins. We are expecting in the current quarter and coming quarters, similar kind of EBITDA margins in the ethanol division.

    — Aditi Pasari

  • Ethanol Segment Sustainable EBITDA per litre (including PLI) Profitability · entire year · High confidence 12-13%

    Previously 17% → 12-13%

    Ethanol segment's 17% includes the additional PLI, which has been received, has been factored in. Just on this call, I have mentioned that sustainable realisations of Rs. 9-10 per litre is what we're looking at, which is about, I would say, 12% to 13%.

    — Aditi Pasari

Revenue

  • Top Line Revenue · FY26 · High confidence Rs. 2,300 crores
    For FY26, we remain on track to deliver a top line of about Rs. 2,300 crores, driven entirely by optimization and high utilization of existing capacities with no incremental capex planned.

    — Aditi Pasari

  • Revenue Revenue · FY27 · High confidence Rs. 2,600-2,800 crores
    Looking ahead to FY27, we aspire to achieve Rs. 2,600 crores to Rs. 2,800 crores in revenue, assuming 80% to 90% utilization across all divisions.

    — Aditi Pasari

  • Potential Revenue with Current Infrastructure Revenue · Medium confidence Rs. 3,000 crores
    With the current infrastructure, we have the scope to go up to Rs. 3,000 crores, but that again depends on market dynamics and the tender allocation from OMCs.

    — Aditi Pasari

Capacity

  • Distillery Capacity Utilization Capacity · FY26 and FY27 · High confidence Full utilization
    Looking ahead, we remain constructively optimistic and expect to achieve full utilization of our distillery capacity in FY26 and FY27.

    — Aditi Pasari

EPS

  • EPS EPS · full year numbers · High confidence cross Rs. 15
    Going by nine-month numbers, I hope that in full-year numbers, EPS will cross Rs. 15 or something like that. Is it reasonable to think? Yes, it is.

    — Aditi Pasari

Ethanol Blending

  • Blending Ratio Ethanol Blending · Medium confidence 24-25%
    The government can easily blend about 24% to 25% with the current engines without causing any damage to our vehicles.

    — Aditi Pasari

What to watch in Q4 FY26

Grain Processing Segment Margin Improvement

Next three months
Current Stressed, starch business pulling down
Target Improved margins, impact from RDF boiler

Why it matters

Improvement in this segment is crucial for overall profitability and diversification beyond ethanol.

We are trying various ways how we can work on this segment to improve the overall margins. The impact should start coming in the next three months.

Risks & concerns

  • Grain Processing Segment Headwinds

    medium

    Industry-wide overcapacity in starch and competition from China have led to stressed margins in the grain processing segment, particularly for starch.

    Management acknowledged

  • Raw Material Price Volatility

    medium

    Despite recent softening, raw material price volatility (maize, broken rice) remains a factor necessitating careful management and calibrated procurement.

    Management acknowledged

  • Lower Ethanol Allocations

    low

    Overcapacity in ethanol production in the country has led to lower allocations for some units, including Gulshan Polyols, than applied for, though future increases are expected.

    Management acknowledged

Q&A highlights

7 direct
Grain Processing Segment Contribution and Future Margins Direct
In the current year, we are expecting revenue contribution of Rs. 1,400 to Rs. 1,500 crores coming from ethanol division alone, and about Rs. 800 crores coming from grain processing division, and balance from mineral. The revenue mix will remain consistent in this direction even for the next year. More than 60% of the revenue will be coming from the ethanol division, and balance from the mineral and grain processing division.

Clarifies the expected revenue mix and the relative contribution of each segment, highlighting ethanol as the dominant growth driver.

Asked by Nishita

Future Capex Plans and Strategic Focus Direct
Until FY27, we are actually fully focused on improving our cash flow, giving out good results quarter-on-quarter, and improving the cash flows and reducing the working capital utilization. Any fresh capex will come in FY28. In FY27 we will be in a planning stage for the next set of capex, which will come in FY28.

Provides a clear timeline for future capital expenditure, indicating a near-term focus on operational efficiency and cash flow before new investments in FY28.

Asked by Nishita

Competition from China in Starch Exports and Impact on Grain Processing Direct
our grain processing business got hit because India was losing to China in the export market. And as a result, all the production of starch and starch derivatives were getting dumped back in the country resulting in falling price and in the process, these products are running in negative.

Explains the historical challenges and margin pressure in the grain processing segment due to intense competition from Chinese exports.

Asked by Pratik Singhania

Evolution into Specialty Ingredients/Biofuel Platform Direct
any new capex which we are considering to do in FY28 will be in the specialty chemical space with more value-added products and import substitutes which are not being manufactured in India. So, our focus will be to introduce a product which is not being manufactured in the country and is only being exported, it will be in the specialty chemical space.

Outlines the company's long-term strategic shift towards higher-value specialty chemicals, moving away from commodity products for future growth.

Asked by Gaurav Shelar

Sustainability of Ethanol EBITDA per Litre Direct
Yes, it is very much sustainable as there is ease off on the raw material prices which has improved the overall margins. We are expecting in the current quarter and coming quarters, similar kind of EBITDA margins in the ethanol division.

Confirms the sustainability of improved ethanol margins, a key driver of current profitability, due to favorable raw material prices.

Asked by Aarav Chheda

Accounting for Interest Subvention and PLI Direct
We have decided to keep on a received basis, cash received basis. Because ISS has been getting delayed from the government side. We have not received ISS of more than one and a half years. So factoring into the P&L was not looking fair to us. So, then in this quarter, we decided to reverse the ISS provision which we had already taken for this year and we have decided to go ahead with a policy of received basis only. Whatever we receive, we will factor in only that.

Explains a significant accounting policy change regarding government incentives, impacting reported earnings and providing clarity on future recognition.

Asked by Manan Shah

PLI Incentives for Madhya Pradesh and Assam Direct
For MP, we have received PLI for FY24 and FY25. The PLI for FY26, which is the current year, is due, which will only be received in second or third quarter of FY27. As far as PLI for Assam is concerned, there is a lot of paperwork... I am expecting at least six months before we can start receiving PLI for Assam.

Provides specific timelines and challenges for receiving crucial government incentives, which directly impact profitability and cash flows.

Asked by Amit Agicha

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Overview

Gulshan Polyols reported a strong Q3 FY26, with consolidated EBITDA margins reaching 13.7%, up 920 basis points year-on-year, and 9M FY26 margins at 9.4%. Revenue for the quarter stood at ₹626.7 crores, contributing to a profit after tax of ₹40.9 crores, a significant 504% increase year-on-year. This robust performance was primarily driven by the ethanol segment and softening raw material prices, aligning with the company's stated guidance.

Ethanol Segment Growth and Policy Support

The ethanol business delivered its strongest results to date, fueled by successful capacity ramp-up in Madhya Pradesh and Assam. The company holds orders worth approximately ₹1,200 crores, translating to 17 crore litres for ESY 25 and 26, against a total production capacity of 26 crore litres per annum. Government policies, including the mandate for ethanol producers to procure 40% of rice from FCI at a fixed price, have softened open market prices for key raw materials like maize and broken rice, leading to meaningful margin improvement. Sustainable EBITDA margins for ethanol are expected to be in the ₹9-10 per litre range, or 12-13% including PLI.

Grain Processing Challenges and Mitigation

The grain processing segment continues to face headwinds due to industry-wide overcapacity in starch, which has kept starch prices under pressure and negatively impacted margins. While sorbitol and fructose remain EBITDA positive, the starch business is a drag. To address this, the company has rationalized loss-making starch volumes and is implementing operational efficiency improvements, including the introduction of an RDF boiler at its Muzaffarnagar plant, with expected positive impact on power and fuel costs within the next three months. The segment is expected to contribute ₹800 crores to revenue in the current year, with a mix of 60% from sorbitol/by-products, 30% starch, and 20% fructose.

Mineral Chemical Segment Stability

The mineral chemical segment delivered steady performance, meeting expectations with consistent demand and operational execution. This segment provides margin resilience and predictable cash flows, contributing to the overall stability of the company's financial profile. It continues to be a reliable part of the revenue mix, balancing the more volatile grain processing segment.

Capital Allocation and Future Growth Plans

The company is focused on improving cash flow and reducing working capital utilization through FY27, with no new capex planned for this period. A planning stage for future capex will occur in FY27, with fresh investments expected in FY28. These future investments will target the specialty chemical space, focusing on value-added products and import substitutes not currently manufactured in India, indicating a strategic shift towards higher-value offerings. The last capex of ₹500 crores in the ethanol segment generated ₹1,500 crores in revenue, setting a benchmark for future investments.

Raw Material Dynamics and Margin Impact

Softening raw material prices, particularly for maize and broken rice, were a key driver of margin expansion in Q3 FY26. The government's policy requiring 40% FCI rice usage for ethanol production has improved overall grain availability and liquidity. While ethanol produced from FCI rice has lower EBITDA margins, the overall availability has allowed for better margins in the remaining 60% of raw material procurement. The company views the import of maize DDGS as positive, as it helps improve price realization for domestic DDGS, which has superior protein and oil content.

Ethanol Blending Roadmap and Future Outlook

Management views the 20% ethanol blending target as just the beginning, with expectations for further increases to 24-25% with current engines and eventually higher levels with flexi-fuel vehicles. The company aspires to achieve a top line of approximately ₹2,300 crores for FY26, with consolidated EBITDA margins of 9-10%. For FY27, revenue is targeted at ₹2,600-2,800 crores, assuming 80-90% capacity utilization, with a potential to reach ₹3,000 crores with existing infrastructure. Full utilization of distillery capacity is expected in FY26 and FY27, supported by improving industry demand.

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