India Glycols

India Glycols reported a robust Q1 FY26 with net revenue increasing 7% YoY to ₹1,040 crores, and gross revenue up 10% to ₹2,503 crores. Profitability saw significant improvement, with EBITDA growing 18% to ₹151 crores and PAT up 21% to ₹73 crores. This led to an EBITDA margin expansion of 128 basis points to 17.7% and PAT margin expansion of 80 basis points to 7.0%. The Bio-Fuel segment's top line surged 45% to ₹348 crores, while Potable Spirits revenue grew 22% to ₹342 crores, with its EBIT margins improving from 17.5% to 21.1%.

The Potable Spirits business continues its strong performance, with Country Liquor's flagship brand, Bunty Bubli, maintaining its position as the highest-selling liquor brand in India for three consecutive years, holding 24-25% market share in UP. The company is strategically expanding its premium portfolio through the Amrut partnership, adding brands like Prestige Whiskey and achieving over 10% market share for Maqintosh White and Black Labels within a year of launch. IGL also plans to enter new states like Kerala and 2-3 more in the current fiscal, alongside targeting the CSD channel.

India Glycols expressed satisfaction with the government's Bio-Fuel strategy, noting that the 20% ethanol blending target, originally set for 2030, is now expected to be achieved by '25-'26. The company reported blending rates progressing from 5% in '19-'20 to 19% in '24-'25. Management believes the business will continue to grow due to increased consumption, penetration, and potential for an enhanced blending mandate of 25-30% by 2030, supported by a well-thought-through administrative price mechanism for feedstocks.

The joint venture demonstrated strong sales growth and excellent profit numbers, with its contribution to profit increasing 73.7% YoY to ₹19 crores from ₹11 crores. This turnaround is attributed to a significant reduction in the Ethylene Oxide (EO) price gap between Reliance and IGL, which narrowed from 42% in mid-'23 to 12-14% in Q1 FY26. Additionally, improved trading of Clariant's manufactured products through the JV and an enhanced product mix from Kashipur contributed to better margins and sales growth.

The Ennature Biopharma segment faced pressures, with sales being weak and margins under pressure, dropping to 2.38% from 33% in 2021. Management attributed this to increased feedstock cultivation, new market entrants, slowing demand in developed markets for molecules like thiocolchicoside, and competition from China. The strategic response involves differentiation through impurity profiling, securing regulatory approvals for developed markets (US, Europe, Japan), and a plan to introduce branded nutraceuticals directly in these markets from Q3 FY26 to substantially improve margins.

For the current fiscal year, India Glycols plans a conservative CapEx of approximately ₹40-50 crores, primarily for rollover and maintenance, with no plans for significant new investments. The company aims to consolidate its financial position, with current year loan repayments projected at about ₹300 crores, which will be funded entirely through internal cash accruals. This strategy is expected to reduce the overall debt, with only ₹100-150 crores of debt remaining after these repayments.