India Glycols Q1 FY27 earnings call

India Glycols Limited commenced FY27 with a robust performance, achieving a net revenue of INR1,130 crores, representing a 9% year-on-year growth. The company's EBITDA reached a record INR170 crores, up 13% year-on-year, with the EBITDA margin improving to 15.0% from 14.3% in Q1 FY26. Profit After Tax (PAT) also saw a significant increase of 32% year-on-year, bolstered by a substantial reduction in finance costs from INR45 crores in Q1 FY26 to INR25 crores in Q1 FY27, attributed to effective debt reduction strategies.

The company has secured NCLT approval for its demerger scheme, which will lead to the separation of the Spirits, Bio-Fuel, and Bio Pharma undertakings into distinct entities. This strategic move aims to enhance focus for each business, allowing for tailored management approaches for consumer-facing (Spirits) and B2B (Chemicals) segments, and providing greater clarity for investors. While the effective date for the demerger is pending, the company is actively progressing with the necessary actions as per the approved plan.

The IGL Spirits entity reported a net revenue of INR694 crores and an EBITDA of INR120 crores, yielding a 17.3% margin. Within this, the Spirits business (IMFL + non-IMFL) generated INR371 crores in revenue with a 22.9% EBITDA margin. IMFL volumes surged 55% year-on-year to 1.4 million cases, with revenue growing 26%. The company's strategy focuses on premiumization, with plans to double IMFL volumes from last year, driven by new launches in deluxe whiskey and semi-premium vodka segments, and expanding its white spirits portfolio. A strategic partnership with Amrut for brand acquisition and distribution in North Indian markets is also a key growth driver.

The India Glycols entity, encompassing chemicals and gases, recorded a net revenue of INR345 crores, up 24% year-on-year, with an EBITDA of INR40 crores and an 11.6% margin. The chemicals business revenue specifically grew 25% to INR332 crores. Green solvents (glycols and glycol ethers) saw volumes increase by 6% and value by 13%, while the glycols business experienced an 83% increase in value. Performance chemicals grew 40%, though this was below target due to challenges in exports and high raw material costs. The company is committed to innovation, being a pioneer in bio-based chemicals and carbon-smart products, and aims for INR150 crores+ EBITDA this year and INR600-700 crores revenue in 4-5 years for the NSU segment.

Ennature Bio Pharma achieved its best-ever quarterly performance, with revenue soaring 53% year-on-year to INR90 crores and EBITDA witnessing a remarkable 188% increase to INR10 crores, resulting in an 11.1% EBITDA margin. This strong growth was attributed to new customer acquisitions, successful nutraceutical launches, and the expansion of its nicotine business. Thiocolchicoside sales showed robust quarter-on-quarter growth of 26%. However, the segment faces ongoing challenges with raw material availability and pricing volatility, particularly noted for Q2 FY27. The company aspires to achieve INR130-150 crores EBITDA for this segment over the next four to five years.

The company discussed the dual impact of global macroeconomic factors, including the war. The spike in crude oil prices, reaching a four-year high, positively influenced the bio-based ethylene oxide business by making it more competitive. Conversely, the war led to severe challenges in raw material availability and pricing, with propylene oxide becoming prohibitively expensive or scarce, negatively affecting the chemicals business, especially in the oil and gas sector and exports to the Middle East and the US. Additionally, freight costs for westbound cargos experienced extreme volatility, increasing 5 to 20 times, further impacting supply chains.