NAVA LIMITED — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Nava reported a resilient Q2 FY26 despite operational headwinds including a planned semi-annual shutdown in Zambia and a prolonged monsoon in India affecting energy demand. While margins saw temporary compression due to forex and one-off costs, the company is aggressively pursuing growth through its 300 MW Maamba expansion and a 100 MW solar project. Management remains committed to shareholder returns, evidenced by record interim dividends and a disciplined 30% payout policy at the Nava Global level.

Highlights

  • Declared a 300% interim dividend, the highest in the company's history.

  • Energy sales revenue stood at ₹877 crores for Q2, down from ₹1,045 crores YoY due to planned shutdowns and monsoon impact.

  • EBITDA margin compressed to 34% from 48% YoY, primarily driven by adverse forex movements and lower domestic demand.

  • Maamba Phase 2 expansion (300 MW) is on track with $226 million spent out of a total $400 million outlay.

  • Secured a 5-year PPA for the Odisha IPP at a rate of ₹5.95 per unit, commencing February 2026.

  • Employee costs spiked to ₹111.6 crores from ₹65.77 crores due to salary revisions and RSU fair valuation.

  • Nava Global received a $72.8 million dividend from Maamba Energy, distributing $10 million to the Indian parent.

  • Consolidated bank borrowings increased to ₹1,559 crores to fund the Maamba Phase 2 expansion.

Concerns

  • Foreign Exchange Volatility

Key financials

  1. Energy Sales Revenue ₹877 Cr -16%YoY
  2. EBITDA Margin 34% -29%YoY
  3. Employee Benefit Expenses ₹111.6 Cr +69.7%YoY
  4. Consolidated Bank Borrowings ₹1,559 Cr +89.4%YoY
  5. Cash and Cash Equivalents ₹1,800 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
    ₹877 Cr Revenue₹5.95 Odisha IPP PPA Rate
  • Robust qualitative Performance Trend

Guidance & targets

Capacity

  • Maamba Phase 2 Commissioning Capacity · FY27 · High confidence Later part of 2026

    Previously August 2026 → Later part of 2026

    We expect to have both the units commissioned by the later part of next year.

    — Ashwin Devineni, MD and CEO

Revenue

  • ZESCO Arrears Realization Revenue · by March 2026 · Medium confidence $55 million
    we hope to receive it before the end of this financial year.

    — Ashwin Devineni, MD and CEO

Capex

  • Maamba Phase 2 Total Outlay Capex · FY27 · High confidence $400 million
    Total outlay is $400 million for Phase 2. And out of that, currently $226 million has been spent.

    — KVS Vithal, CFO

Volume

  • Avocado Full Production Volume · FY28 · Medium confidence 100,000 trees
    And I think we're looking at probably full production at FY '28.

    — Ashwin Devineni, MD and CEO

Market context

  • Nava Global Payout Ratio Dividend · Ongoing · High confidence 30%
    the dividend policy for Nava Global is adopted by the Board is 30% of PAT would be distributed as dividend.

    — Ashwin Devineni, MD and CEO

Risks & concerns

  • Foreign Exchange Volatility

    high

    Forex significantly impacted EBITDA margins in Q2, though management expects this to reverse.

    Management acknowledged

  • Receivable Delays (ZESCO)

    medium

    $55 million remains outstanding from ZESCO; recovery is expected by fiscal year-end but remains a liquidity watch item.

    Analyst acknowledged

  • Agricultural Gestation Periods

    low

    Avocado plantation will not reach full production until FY28, requiring patient capital.

    Management acknowledged

Areas of evasion (2)

  • Specific margin projections for the new solar and avocado projects.
  • Quantification of the exact revenue loss from the Zambia shutdown.

Q&A highlights

2 direct
Sharp jump in employee costs Direct
It has two components. One is the salary increases... effective 1st of April. And second is we also do the fair valuation of the RSUs.

Clarifies that the 70% YoY jump in employee costs is partly structural and partly accounting-driven (RSUs), rather than a recurring operational inefficiency.

Asked by AM Lodha, Sanmati Consultants

EBITDA Margin Compression Partial
One is the forex has been impacting us... which definitely we feel it will reverse. And the second is in terms of the demand condition.

Management attributes the 1400bps margin drop to external factors (forex and weather) rather than core business deterioration, suggesting a recovery is expected.

Asked by Vansh Jain

Utilization of high cash balances vs. increased borrowing Direct
The borrowings are mainly towards the Maamba Phase 2... A big part of that is still in our cash and cash balance, which will be used subsequently to fund that project.

Explains the apparent contradiction of holding ₹1,800cr cash while borrowing ₹1,559cr, highlighting the phased funding strategy for the $400M expansion.

Asked by AM Lodha, Sanmati Consultants

2 min read 5 chapters

Detailed narrative

Maamba Phase 2 Expansion Anchors Growth

The 300 MW Maamba Phase 2 expansion is the company's primary growth lever, with a total outlay of $400 million. As of Q2, $226 million has already been deployed, and the project is on track for commissioning in the latter half of 2026. Management is funding this through a mix of phased bank borrowings and internal accruals, explaining the recent rise in consolidated debt to ₹1,559 crores.

Energy Segment Faces Seasonal and Operational Headwinds

Energy revenue dipped to ₹877 crores from ₹1,045 crores YoY, impacted by a planned two-month semi-annual maintenance shutdown at the Zambia plant. Additionally, a prolonged monsoon in India dampened domestic demand and price realization. However, the transition of the Odisha plant to an IPP with a secured 5-year PPA at ₹5.95 per unit (starting Feb 2026) provides long-term revenue visibility.

Margin Compression and Forex Volatility

EBITDA margins saw a significant drop from 48% to 34% YoY. Management identified adverse foreign exchange movements as a primary culprit, alongside lower demand conditions. While the drop is sharp, the CFO expressed confidence that these are largely 'one-offs' and that margins should bounce back to higher levels in subsequent quarters as forex pressures ease.

Strategic Diversification into Agri-Business

Nava is scaling its avocado plantation in Zambia, with 100,000 trees currently planted. While initial small-scale production has begun, management expects a gradual ramp-up with full production and revenue contribution slated for FY28. The company is currently evaluating distribution models, including direct sales and distributor partnerships, to optimize margins.

Shareholder Rewards and Capital Allocation

The company demonstrated strong commitment to shareholders by declaring a record 300% interim dividend. This is supported by a robust cash balance of ₹1,800 crores and a disciplined dividend policy at the Nava Global level, which mandates a 30% PAT payout. This strategy ensures that cash generated from international operations like Maamba is consistently repatriated to reward Indian shareholders.

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