NAVA LIMITED — Q3 FY25 earnings call

Call held 7 Feb 2025

Management summary

Nava demonstrated strong operational resilience in Q3 FY25, characterized by significant cash recoveries from Zambia and steady progress on major expansion projects. While the domestic ferroalloys business faced margin pressure, the energy segment remains the primary value driver with high plant availability and a clear roadmap for Phase 2 expansion. Management's focus is shifting toward capital allocation and shareholder rewards as the company achieves a debt-free status at the standalone level.

Highlights

  • Consolidated energy revenue reported at ₹3,513 crores, while standalone energy revenue stood at ₹204 crores.

  • Received $43 million from ZESCO in the last quarter towards arbitration arrears; $160 million remains outstanding.

  • Maamba Energy Phase 2 expansion (300 MW) is on track for commissioning by August 2026 with a project cost of $400 million.

  • The company has become debt-free at the parent level and is evaluating shareholder-friendly actions like dividends.

  • Ferroalloys division reported an EBITDA loss of ₹7 crores in Q3 due to subdued silicomanganese markets, but expects recovery in Q4.

  • Avocado plantation project is progressing with 130,000 trees planted out of a 400,000-tree target; total investment of $45 million.

  • Maamba Energy's shareholder loan to Nava Bharat Singapore reduced from $64 million to $38 million as of December 31, 2024.

Key financials

  1. Consolidated Energy Revenue ₹3,513 Cr
  2. Standalone Energy Revenue ₹204 Cr
  3. Ferroalloys EBITDA Loss ₹-7 Cr
  4. Arbitration Arrears Received $43 Mn

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
    ₹3,513 Cr Consolidated Revenue₹204 Cr Standalone Revenue0.095 USD/unit Phase 2 Tariff
  • Ferroalloys
    ₹7 Cr EBITDA Loss12.5% Price Increase (Q4 Outlook)
  • Agriculture
    1,30,000 Trees Planted$45 Mn Total Investment

Guidance & targets

Capacity

  • Maamba Phase 2 Commissioning Capacity · FY27 · High confidence August 2026
    In terms of the commissioning of Phase 2, both units as per the schedule are to be commissioned by August 2026.

    — Ashwin Devineni, CEO

Capex

  • Maamba Phase 2 Project Cost Capex · FY26-FY27 · High confidence $400 million
    The Maamba phase 2 is expected to cost 400 million. 300 million is the debt portion and 100 million is the equity portion.

    — Ashwin Devineni, CEO

Debt

  • Cost of Debt for Phase 2 Debt · FY26 · High confidence 9%
    It's 9% in dollar terms.

    — GRK Prasad, Executive Director

Volume

  • Total Avocado Trees Volume · by March 2025 · Medium confidence 400,000
    About 400,000 trees, ma'am.

    — Sultan Baig, CFO

Other

  • Exploration Budget Other · Annual · Medium confidence $2 million
    So I think, the cost that we have budgeted for the exploration activities is about USD2 million.

    — Ashwin Devineni, CEO

Risks & concerns

  • Ferroalloys Market Volatility

    medium

    The silicomanganese market was subdued in Q3, leading to an EBITDA loss; recovery depends on volatile global prices.

    Both acknowledged

  • Exploration Uncertainty

    medium

    Manganese exploration in Ivory Coast has yielded mixed results, with one mine being non-encouraging.

    Both acknowledged

  • Domestic Power Tariff Pressure

    low

    Tariffs are currently lower than last year due to the high base effect of the election period in the previous year.

    Management acknowledged

Areas of evasion (1)

  • Specific tariff for the existing power plant was not provided when asked, though the expansion tariff was.

Q&A highlights

3 direct
Arbitration Award and ZESCO Payments Direct
They paid us a total of $43 million in the last quarter towards the arrears. So, I think the total outstanding is about $160 million from ZESCO, which they have indicated that they plan on clearing before the end of the year.

Confirms a significant acceleration in cash recovery from Zambia, which improves liquidity and enables expansion funding.

Asked by AM Lodha

Shareholder Returns and Debt Status Direct
Definitely, I think as a company we are evaluating certain actions that we may take and intimate to the wider group soon.

Signals that management is considering dividends or buybacks now that the parent company is debt-free and receiving cash from subsidiaries.

Asked by Viraj Mahadevia

Ferroalloys Profitability and Raw Material Booking Direct
We picked up large quantities [of manganese ore] at that point which covered up until September... prices have been increasing... about 10% since the price in December.

Reveals a strategic raw material inventory build-up that should protect margins in the coming quarters as finished product prices rise.

Asked by Gargi Singh

2 min read 5 chapters

Detailed narrative

Zambia Energy Expansion and Financial Recovery

The Maamba Energy Phase 2 project is the company's primary growth engine, with a $400 million investment planned to add 300 MW of capacity by August 2026. Financial closure is progressing with a 9% cost of debt for the $300 million debt portion. Crucially, the company received $43 million in arbitration arrears from ZESCO in Q3, reducing the outstanding balance to $160 million, which ZESCO aims to clear by the end of the year. This cash flow has allowed the Maamba subsidiary to reduce its shareholder loan to the parent from $64 million to $38 million.

Ferroalloys Segment Facing Short-term Headwinds

The ferroalloys division struggled in Q3, reporting a ₹7 crore EBITDA loss due to subdued silicomanganese prices and a 15-day shutdown at the Odisha plant. However, management is optimistic about a turnaround in Q4, citing a 10-15% sequential increase in export market prices. The company strategically booked manganese ore at 'rock bottom' prices in late 2024, securing raw material costs through September 2025, which is expected to significantly expand margins as finished product prices stabilize.

Aggressive Diversification into Commercial Agriculture

Nava is investing $45 million into a large-scale avocado and sugar project in Zambia. Currently, 130,000 trees have been planted, with a target of 400,000 trees across four divisions by March 2025. While peak revenue is 4-5 years away, the first commercial fruit is expected by the end of 2025. Additionally, sugar cultivation is slated to begin this year, leveraging land adjacent to the avocado plantations to create a diversified agri-business vertical.

Capital Allocation and Shareholder Value

With the parent company now debt-free and cash flows from Zambia accelerating, management is actively evaluating shareholder-friendly actions. Ashwin Devineni indicated that the company is considering dividends or special dividends as they move past the heavy debt-repayment phase. The monetization of Nacharam lands remains a secondary option, with the company currently 'sitting on it' to enjoy real estate appreciation in the Hyderabad market rather than selling aggressively.

Mining Exploration and Future Pipeline

Nava is maintaining a $2 million annual budget for mineral exploration, focusing on lithium and magnetite. While these initiatives are in early stages (surveys and drilling), they represent the long-term pipeline for the company's mining vertical. In Ivory Coast, the company has been allocated a second manganese mine of 360 square kilometers after the first mine showed discouraging results, with a concrete plan expected in about a year.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Power earnings calls