REGAAL

Regaal Resources reported a robust FY26, with operating income growing 23.9% year-on-year to INR 1,134.2 crores and PAT reaching INR 55.6 crores, representing a 4.9% margin. The company successfully commissioned a significant expansion of its manufacturing infrastructure on May 26, 2026, scaling crushing capacity to 1,650 tons per day. This expansion positions Regaal as the largest maize milling facility in Eastern India and strengthens its long-term growth prospects.

The recent expansion includes new derivative manufacturing facilities for liquid glucose (180 TPD) and maltodextrin powder (50 TPD), diversifying the product portfolio. Concurrently, the captive co-generation power plant was expanded by an additional 10 MW, bringing the total capacity to 15.8 MW. This significantly strengthens the company's energy self-sufficiency, with approximately 81% of FY26 electricity requirements sourced internally.

The company demonstrated improved financial health in FY26, with the net debt-equity ratio improving to 1.1x from 1.9x in FY25. The cash conversion cycle also saw significant improvement, reducing to 50 days from 93 days in FY25, driven by tighter working capital management. The Board recommended a dividend of INR 0.25 per share for FY26, reflecting confidence in sustained performance.

Regaal employs a three-pronged procurement strategy, sourcing directly from farmers during the Rabi season (April-July), through Farmer Procurement Centers (FPCs) across 27 locations, and from traders. The company maintains substantial storage capacity, including 65,000 MT in silos and 240,000 tons in warehouses, ensuring supply security. Management noted that maize prices have softened considerably by about 10% compared to the previous year, which is favorable for the industry.

Regaal benefits significantly from the Bihar Industrial Investment Promotion Policy (BIIPP), which provides interest subvention (up to 10% on loans) and State GST reimbursement, lowering the effective cost of capital. The total capex envisaged for completion in 2026-27 is INR 540 crores, with INR 401 crores already spent by March 31, 2026, and the remaining INR 140 crores to be spent in FY27. This capex is primarily for further value-added products like dextrose and modified starches.

Management decided to refrain from providing a formal earnings outlook for FY27, citing the need for stabilization of the newly commissioned capacities and evolving input cost dynamics. They anticipate providing a more comprehensive view of the earnings trajectory by the end of H1 FY27, after observing stabilized operations and clearer trends in corn prices. This approach aims to provide guidance grounded in demonstrated operating performance rather than early-stage assumptions.

The company is strategically shifting towards higher value-added maize derivatives, with an expectation for their contribution to revenue to increase from 3% in FY26 to 20-25% in FY27 and potentially 35% in FY28. This significant increase in value-added products, coupled with economies of scale from the doubled crushing capacity, is expected to drive margin accretion and position Regaal as a more complete maize processing platform.