MODINATUR

Modi Naturals reported robust Q4 FY26 results with consolidated revenue up 28% YoY to INR243 crores and PAT surging 141% YoY to INR19.7 crores. For the full FY26, revenue grew 8.5% to INR719 crores and PAT increased 62.1% to INR50.3 crores. The company successfully commissioned Phase 2 ethanol expansion, increasing capacity from 130 KL to 282 KLPD, and achieved its FY26 guidance across key financial metrics, including revenue, EBITDA, and PAT.

The company's expanded ethanol facility commenced commercial operations in the latter part of FY26, with management expecting operational and financial benefits to become more visible from FY27 as utilization levels improve and operations stabilize. For FY27, the ethanol division targets INR950 crores in revenue, a figure considered conservative based on only 50% utilization of the expanded capacity. Management believes long-term EBITDA margins for this division will be in the range of 12-15%.

Modi Naturals has secured an order of INR400 crores for 47.9 KL for the ongoing Ethanol Supply Year (ESY), which runs until October 31, 2026. The company anticipates receiving more orders from private OMCs and expects fresh tenders for the ongoing ESY to be released by the end of June. Management expressed confidence in fully utilizing the 282 KLPD capacity, noting their strategic location and ability to supply across the country.

The company is actively pursuing value addition initiatives within the ethanol segment, focusing on both the alcohol side (portable/chemical) and byproduct side. One innovation has already been implemented, contributing to improved EBITDA margins, and a second value-added product is currently underway, expected to be completed within a few months. This strategy aims to enhance profitability and mitigate risks associated with potential overcapacity in the core ethanol business.

The consumer division recorded its highest-ever quarterly revenue of INR50 crores in Q4 FY26. Growth is being propelled by new product launches, such as hing, and the strong performance of categories like pasta on quick commerce platforms. The company is expanding its distribution reach across tier 1 and tier 2 cities, covering approximately 50,000 direct outlets and maintaining a channel mix of 50% modern trade, 40% general trade, and 8-10% army channel. E-commerce is expected to ramp up faster, while general trade remains underpenetrated.

Modi Naturals implemented several initiatives to enhance operational discipline, improve procurement efficiencies, and reduce inventory intensity. These efforts resulted in an improvement in working capital days to 62 days as of March 31, 2026, down from 66 days last year. Cash flow from operations increased to INR61.1 crores in FY26, up from INR48.8 crores in FY25. As part of strategic rationalization, one solvent extraction plant in Pilibhit was shut down due to non-viability of operations.

The company's total advertising spend for FY26 was INR12 crores, representing approximately 6.5% of revenue. Management emphasized a targeted advertising approach, utilizing digital platforms like Jio Cinema and Hotstar to reach their core female audience, rather than relying solely on mass television. This strategy aims to build brand awareness and accessibility while segmenting the audience effectively. The company also received an insurance claim of INR4.9 crores in Q4 FY26 for business interruption in FY24.