NAVA LIMITED — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

Nava delivered a record-breaking performance in Q1 FY26, driven by robust energy operations and a significant breakthrough in receivables collection from its Zambian subsidiary, MEL. The company is aggressively expanding its power capacity with 400 MW of new projects (thermal and solar) slated for mid-2026. While mining profitability faced forex headwinds, the overall outlook remains strong with a healthy balance sheet and clear strategic pivots into commercial agriculture.

Highlights

  • Achieved highest ever quarterly profit in Q1 FY26 with Net Profit of ₹490 crore, up 61% QoQ

  • Consolidated Revenue reached ₹1,213 crore, representing a 15% sequential increase

  • Successfully collected $75 million in arrears from Maamba Energy Limited (MEL)

  • MEL declared its maiden dividend of $32.5 million, enhancing cash flow visibility

  • MEL Phase II (300 MW) and 100 MW solar project in Zambia are on schedule for 2026 commissioning

  • Net cash position stands at approximately ₹1,400 crore with gross cash of ₹2,400 crore

  • Relocating a 20 MW idle power plant from India to Zambia as part of a $200 million integrated sugar project

Key financials

  1. Revenue ₹1,213 Cr +15%QoQ
  2. Net Profit ₹490 Cr +61%QoQ
  3. Gross Cash ₹2,400 Cr
  4. Net Cash ₹1,400 Cr

What they filed

Q1 FY27: revenue down 1.5%, net profit up 88.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue331 280 484 530 439 +33%396 +41%559 +15%522 −2%
EBITDA73 62 82 144 69 −5%57 −8%115 +40%152 +6%
Net profit146 47 97 141 156 +7%135 +187%478 +393%266 +89%
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

  • Energy (MEL)
    $75 Mn Arrears Collected$32.5 Mn Maiden Dividend9.5 cents PPA Tariff (Phase II)
  • Metals (Ferroalloys)
    0 improvement Realization Trend
  • Mining
    0 Forex decline Profitability Impact

Guidance & targets

Other

  • MEL Arrears Collection Other · by end of FY26 · High confidence $85 million
    We expect to receive the entire $85 million in arrears before the end of this financial year.

    — Ashwin Devineni, MD & CEO

  • Zambia Power Business Tax Rate Other · FY26-FY28 · High confidence 15%

    Previously 0% → 15%

    for the next three years, which is FY ‘26, FY ‘27 and FY ’28, we will be taxed at 50% of the tax rate, which is 15%.

    — K. V. S. Vithal, CFO

Capacity

  • Solar Power Commissioning Capacity · July 2026 · High confidence 100 MW
    100 MW solar power plant is to be commissioned by July ‘26.

    — Ashwin Devineni, MD & CEO

  • Thermal Power Commissioning Capacity · August 2026 · High confidence 300 MW
    300 megawatt thermal power plant is to be commissioned by August ‘26.

    — Ashwin Devineni, MD & CEO

Capex

  • Integrated Sugar Project Investment Capex · by April 2028 · Medium confidence $200 million
    This will get spent till April ‘28, by when we expect the crushing and the sugar production to come into existence.

    — GRK Prasad, Executive Director

Dividend

  • Dividend Payout Ratio Dividend · Standard Policy · High confidence 25-30%
    Yes. I think our primary dividend policy is between 25% to 30%.

    — Ashwin Devineni, MD & CEO

Risks & concerns

  • Forex Volatility

    medium

    Mining operations profitability was negatively impacted by the exchange rate between USD and Zambian Kwacha.

    Management acknowledged

  • Tax Headwinds

    medium

    The transition from 100% tax exemption to a 15% tax rate in Zambia will impact cash flows.

    Both acknowledged

  • Operational Shutdowns

    low

    Both power units are scheduled for maintenance shutdowns in Q2.

    Management acknowledged

Q&A highlights

3 direct
Tax Exemption Reversal in Zambia Direct
from this year onwards... part of the tax exemption will not be available... we will be taxed at 50% of the tax rate, which is 15%.

Clarifies a significant change in the tax structure for the company's most profitable segment, impacting future net margins.

Asked by Anukool

Ferroalloys Profitability vs Realizations Direct
Silico Manganese realization was lower year-on-year. But that is compensated by ferrosilicon realizations being higher.

Explains why PBT was down YoY despite management's claims of better realizations, highlighting product-specific market dynamics.

Asked by Nidhi Shah

Sugar Project Funding and Relocation Direct
The $200 million comprises the full-fledged plantation... aside from the sugar plant, the co-generation power plant and the distillery.

Reveals the scale and scope of the new agriculture diversification and the strategy to utilize idle Indian assets in Zambia.

Asked by Viraj Mahadevia

2 min read 5 chapters

Detailed narrative

Record-Breaking Financial Performance

Nava achieved its highest-ever quarterly profit in Q1 FY26, with net profit surging 61% sequentially to ₹490 crore. Consolidated revenues grew 15% QoQ to ₹1,213 crore, driven by robust energy operations and improved realizations in the metal business. This performance was supported by disciplined cost control and strong operational execution across all business segments.

Maamba Energy (MEL) Liquidity Breakthrough

A major highlight of the quarter was the collection of $75 million in arrears from ZESCO, significantly improving MEL's receivable position. This liquidity allowed MEL to declare a maiden dividend of $32.5 million, which strengthens Nava's consolidated balance sheet and enhances cash flow visibility. Management expects to collect the remaining $85 million in arrears by the end of FY26.

Strategic Expansion in Power Generation

Nava is on track with its ambitious expansion plans in Zambia, including a 300 MW thermal Phase II expansion and a 100 MW solar project. The solar plant is scheduled for commissioning in July 2026, followed by the thermal plant in August 2026. 100% of the Phase II power is already tied up with ZESCO at a tariff of 9.5 cents per kilowatt hour.

Diversification into Commercial Agriculture

The company is making tangible progress in Africa with its commercial agriculture initiatives, including avocado plantations and an integrated sugar project. The sugar project involves a $200 million investment through April 2028 and includes the relocation of an idle 20 MW power plant from India to Zambia. This relocation aims to capture value from existing assets while meeting the power needs of the sugar project and the local grid.

Metals and Mining Operational Dynamics

The ferroalloys segment benefited from long-term contracts in Japan and product diversification into ferrosilicon for the US market, yielding better realizations despite a subdued broader market. However, mining profitability was pressured by unfavorable forex movements between the USD and Zambian Kwacha. In India, the company is transitioning captive power plants in Telangana and Odisha into independent power producers to improve capacity utilization.

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