Nava

NAVA Limited achieved a strong FY26, with standalone profit after tax increasing by 116% to INR 911 crore, marking one of the company's best performances. This growth was supported by healthy upstream dividend flows from overseas investments and buyback proceeds, contributing to a robust year for cash generation and strengthening liquidity. Reflecting this performance, the company declared its highest-ever dividend of INR 8.50 per share for the year.

Consolidated profitability was impacted by accounting-led deferred tax adjustments at Maamba Energy Limited (MEL). This was primarily driven by approximately 32% appreciation of the Zambian Kwacha, resulting in unrealized foreign exchange gains and a deferred tax liability. Management clarified this is a non-cash, temporary accounting adjustment with no immediate cash outflow or impact on underlying operational performance, and the deferred tax position will be reassessed based on exchange rate movements.

The company's Telangana power operations benefited from a reduction in coal prices by Singareni Collieries since September 2025, aligning with international market rates. This improved cost structure enables NAVA to operate year-round with a higher Plant Load Factor (PLF) and secure more contracts. Domestic power realizations for the current year are estimated around INR 5.50. Additionally, the Maamba power plant experienced a planned shutdown in Q4, which contributed to a QoQ decline in EBITDA due to increased manufacturing expenses and replacement maintenance.

The ferro alloys vertical faced significant pricing pressures due to EU safeguard duties against Indian imports and geopolitical situations in the Middle East, leading to increased material dumping in the domestic market. Despite these challenges, NAVA is largely insulated from these volatilities, with 40% of its production tied to long-term contracts with two major Japanese mills and another 40-50% with big steel producers in India, limiting spot market exposure to 10-15%. The company expects silico manganese production to be about 130,000 tons for the next year.

NAVA is actively investing in new projects, including a 100-megawatt solar plant expected to commence commissioning in July 2026, and a 300-megawatt thermal expansion (Phase 2) at MEL targeted for early January 2027. The solar project has a tariff of $0.078 and is expected to generate $20-22 million in top-line revenue and $6-7 million in bottom-line. The company has committed $130 million in equity and plans for $100 million in Agri-side debt for these ventures, utilizing its INR 1,347 crore financial assets (liquid mutual funds and debt products) for funding.

The avocado and sugar complex is progressing, with the first commercial avocado harvest yielding about 150 tons this year. The company anticipates a harvest of 1,000 tons next year, with volumes doubling annually until 2034, projecting a peak revenue of $22 million from avocado. In its African mining ventures, NAVA has found promising results in manganese exploration in Ivory Coast and expects to secure an exploitation permit within the next year. However, its lithium exploration project faces a hurdle as another company has claimed the license for the same area, leading to a review by the ministry, and NAVA will not proceed until regulatory clarity is achieved.

The appreciation of the Zambian Kwacha has led to deferred tax adjustments but does not affect cash flow from USD-denominated Power Purchase Agreements (PPAs) due to ring-fencing. While local employee costs are now paid in Kwacha, this is largely hedged by Kwacha-denominated coal sales, resulting in minimal delta. The company has successfully collected 90% of its receivables from ZESCO, with the remaining 10% expected within the next six months.