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Regaal Resources Limited — Q4 FY26 earnings call

Call held 28 May 2026

Management summary

Regaal Resources reported strong growth in FY26, with operating income increasing by 23.9% YoY to INR 1,134.2 crores and PAT reaching INR 55.6 crores. The company successfully commissioned a significant expansion of its manufacturing capacity to 1,650 TPD and expanded its captive power generation, strengthening its energy self-sufficiency. Despite improved profitability and operational scale, management has deferred providing FY27 guidance, citing the need for stabilization post-expansion and evolving corn prices.

Highlights

  • Full year FY26 Operating income grew by 23.9% YoY to INR 1,134.2 crores.

  • Full year FY26 Operating EBITDA margin stood at 11.2%, reflecting better realizations.

  • Q4 FY26 Operating EBITDA margin improved to 13.3% and PAT margin to 6.8%, reflecting sequential improvement.

  • Net debt-equity ratio improved to 1.1x in FY26 from 1.9x in FY25.

  • Cash conversion cycle improved significantly to 50 days in FY26 from 93 days in FY25.

  • Successful commissioning of manufacturing infrastructure expansion to 1,650 tons per day capacity.

  • Captive co-generation power plant expanded by 10 MW, taking total power capacity to 15.8 MW, strengthening energy self-sufficiency.

  • Board recommended a dividend of INR 0.25 per share for FY26.

Concerns

  • Margin expansion in FY26 was partly offset by higher freight and forwarding costs and higher shutdown days in March '26.

  • Management refrained from providing FY27 guidance due to new capacities ramping up and evolving input cost dynamics.

  • Analyst noted a Q-on-Q margin decline (Q4 vs Q3), though management clarified EBITDA margin increased despite ramp-up costs.

Key financials

2 periods

Q4 FY26

  • Operating Income
    ₹244.6 Cr
  • Operating EBITDA
    ₹32.5 Cr
  • Operating EBITDA Margin
    13.3%
  • PAT
    ₹16.5 Cr
  • PAT Margin
    6.8%

FY26

  • Operating Income
    ₹1,134.2 Cr
    YoY +23.9%
  • PAT
    ₹55.6 Cr
  • Operating EBITDA
    ₹126.6 Cr
  • Operating EBITDA Margin
    11.2%
  • PAT Margin
    4.9%
  • Net Debt-Equity Ratio
    1.1×
  • Cash Conversion Cycle
    50 days

What they filed

Q1 FY27: revenue down 18.2%, net profit up 44.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue205 257 259 247 320 +56%323 +26%245 −5%202 −18%
EBITDA31 31 27 24 35 +13%35 +13%33 +22%31 +29%
Net profit13 14 11 9 17 +31%13 −7%17 +55%13 +44%
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.

Capital allocation

  • Capex ₹540 Cr Raised — expanding value-added products pipeline and scaling up captive co-generation plant capacity
    • Expansion of manufacturing infrastructure (crushing capacity to 1,650 TPD), new derivative manufacturing facilities (liquid glucose, maltodextrin powder)
    • Expansion of captive co-generation power plant (additional 10 MW)
    • Future additions to value-added portfolio (dextrose anhydrous, dextrose monohydrate, hydrol, modified starch range)

    Previously planned ₹430 Cr

    We are pleased to inform on 26th May 2026, we successfully commissioned a significant expansion of our manufacturing infrastructure. Our crushing capacity has been scaled up to 1,650 tons per day, completed by the addition of new derivative manufacturing facilities, being liquid glucose at 180 tons per day and maltodextrin powder at 50 tons per day. Simultaneously, our captive co-generation power plant has been expanded additionally by 10 MW, taking the total power capacity to 15.8 MW power plant, meaningfully strengthening our energy and self-sufficiency. This commissioning marks a significant milestone in Regaal's journey towards being a diversified maize-based specialty product company. It strengthens our presence in higher value-added maize derivative products and enhances our ability to cater to evolving customer requirements across the food, pharmaceutical, agriculture, and healthcare sectors. At 1,650 tons per day, Regaal now operates as the largest maize milling facility in Eastern India, further strengthening our manufacturing scale and long-term growth prospects. ... We are pleased to inform on 26th May 2026, we successfully commissioned a significant expansion of our manufacturing infrastructure. Our crushing capacity has been scaled up to 1,650 tons per day, completed by the addition of new derivative manufacturing facilities, being liquid glucose at 180 tons per day and maltodextrin powder at 50 tons per day. Simultaneously, our captive co-generation power plant has been expanded additionally by 10 MW, taking the total power capacity to 15.8 MW power plant, meaningfully strengthening our energy and self-sufficiency. ... This led us to revise our capex outlay upwards from approximately INR430 crores to approximately INR540 crores. ... Sir we have already mentioned in my speech that about INR 540 odd crores capex is envisaged for completion in 2026-27, out of which about INR 401 crores we have already spent by 31st of March '26. So balance INR140 crores will be coming in this year.
  • Debt Net ₹545.65 Cr Cost 5%
    From a balance sheet perspective, the net debt-equity ratio improved to 1.1x from 1.9x in FY25 and the company's cash conversion cycle improved significantly to 50 days in FY26 from 93 days in FY25, driven by tighter working capital management, supported by lower inventory and receivable days. ... So at present our net debt is around INR 545.65 crores. Now with the number of capex which is coming during this financial year, so it is expected that it should be around INR 700 crore, INR750 crores of total debt. That includes the working capital debt also, CC etc. ... So, sir, how is this treated in the accounts because what I see interest cost is 5% currently. So is it already deducted from the interest which is debited in the P&L? ... Yes, it is already being deducted from the interest cost which is coming and which you are seeing in your profit and loss account.
  • Dividend ₹0.25/share (final)
    I am pleased to share that the Board has recommended a dividend of INR 0.25 per share, subject to the shareholders' approval.

Guidance & targets

Profitability

  • FY27 Earnings Outlook Profitability · By end of H1 FY27 · High confidence Will be provided
    We look forward to sharing a more comprehensive view of our earnings trajectory by the end of H1 FY27.

    — Anil Kishorepuria

  • Value-added products revenue contribution Profitability · FY27, FY28 · Medium confidence 20% to 25% (FY27), 35% (FY28)

    Previously 3% → 20% to 25% (FY27), 35% (FY28)

    So, I think the ramp-up is happening this year. At the peak capacity we'll be about 35% value-added, but this year will be closer to 20% largely between 20% to 25%. Okay. But as it ramps up. So, it will depend on the commissioning, but it will be anywhere between, hopefully between 20% to 25% this year and 35% around 35% next year.

    — Sanjeev Sancheti

Capacity

  • Optimal Capacity Utilization Capacity · Fairly quickly (post-commissioning) · High confidence 100% of the rated capacity
    we very quickly reach the optimum capacity. So we will reach the optimum capacity, which is literally 100% of the rated capacity, fairly quickly.

    — Sanjeev Sancheti

Input Costs

  • Maize price reduction YoY Input Costs · Current year (FY27) vs last year (FY26) · Medium confidence about 10%
    It should come down to about 10% compared to last year, sir. That is my calculation.

    — Anil Kishorepuria

What to watch in Q1 FY27

FY27 Earnings Outlook/Guidance

By end of H1 FY27
Current Refrained from providing formal guidance
Target Formal earnings outlook/guidance for FY27

Why it matters

Crucial for investor modeling and understanding the company's future performance trajectory post-expansion.

We look forward to sharing a more comprehensive view of our earnings trajectory by the end of H1 FY27.

Risks & concerns

  • New Capacity Stabilization and Input Cost Dynamics

    medium

    Management is at an 'inflection point' with new capacities coming on stream and evolving input cost dynamics, leading them to refrain from formal earnings outlook for a quarter.

    Management acknowledged

  • Higher Freight and Forwarding Costs

    low

    Higher freight and forwarding costs partly offset margin expansion during FY26.

    Management acknowledged

  • Higher Shutdown Days

    low

    Relatively higher shutdown days during March '26 impacted crushing volumes and operating leverage.

    Management acknowledged

Q&A highlights

7 direct
Procurement Strategy and Storage Capacity Direct
We basically have a three-pronged strategy. We buy directly from farmers during the season, during the Rabi season that starts from April to July basically, but there's a spillover also; farmers also supply in August and September, but the main season is from April to July. That's when we procure our maximum requirement. ... We have agreements, with warehouses all around our factory from 500 meters to maximum 80 kilometers, where we are stocking this material. We have 240,000 odd tons of material godowns all across.

Clarifies the company's robust raw material procurement and storage strategy to support expanded capacity.

Asked by Surya Nayak

Impact of New Capacity on Trading Revenue Direct
Sir, it will come down considerably. It will be near to zero. I will not say that it will not be a crores or 5 crores, it will be near to zero. We don't have any plans to do any trading because we will not be having maize to trade.

Indicates a strategic shift away from trading towards manufacturing, potentially improving margin quality and stability.

Asked by Surya Nayak

Remaining Capex for Dextrose/Hydrol Direct
Sir we have already mentioned in my speech that about INR 540 odd crores capex is envisaged for completion in 2026-27, out of which about INR 401 crores we have already spent by 31st of March '26. So balance INR140 crores will be coming in this year.

Provides clarity on the remaining capital expenditure and the timeline for further product pipeline expansion.

Asked by Surya Nayak

Q-on-Q Margin Performance Partial
EBITDA has gone down because we ramped up our costs for the expansion. But if you have to look at the value-add level, value-add has increased. So this is not reflective of because while the capacity has gone live now, but we had to ramp up to the run-up to expansion commissioning, we had to ramp up the costs. ... if you look at the EBITDA margin, operating EBITDA margin has gone up from 10.7% to 13.3% in spite of, you know, the ramp-up of costs for the expansion.

Addresses analyst concern about margin decline, clarifying that Q4 EBITDA margin actually improved despite ramp-up costs for expansion.

Asked by Keshav Garg

White-labelling Strategy Direct
White-labelling strategy, we are doing small capacity at the moment. We started with one company, now we have four companies enrolled. I would not want to disclose their name at this moment, but we are increasing that and the volumes have increasing of the white-labelling quite a bit. And percentage-wise if you say, we were doing if in volume terms, we were doing at about 6,500, earlier about 2% to 2.5% of the starch quantity as white-labelling, but this will now go up quite considerably within say within H1.

Reveals a new growth avenue and potential for increased volumes and revenue from white-labelling.

Asked by Khushi Parekh

Maize Procurement and Pricing Environment Direct
The availability of raw material in Bihar was never a problem. They have abundant raw material available and Bihar is a net exporter of raw material to all these states. So that is not an issue. And the price of course is a market-driven prices. Compared to last year and this year, the prices of maize has really come down quite considerably, and that is what we expected that it will be good for the entire industry.

Provides insight into favorable input cost trends, which is critical for margin management in a maize-based company.

Asked by Khushi Parekh

Bihar Interest Subvention Scheme Direct
Sir, the Bihar State Promotion Board Policy which came in 2016, which was amended in 2025 and the interest subvention was increased, there was a temporary policy which they had taken out. It gives us whatever capital, whatever money we are taking from scheduled banks for the construction of the infrastructure for making of the factory and production, that entire loan is subvented by the Bihar Board till the tune of 10% per annum rate of interest charged by the government. That is the capping. ... Yes, it is already being deducted from the interest cost which is coming and which you are seeing in your profit and loss account.

Highlights a significant policy benefit that reduces the company's effective cost of capital.

Asked by Harsh Saraswat

Working Capital Intensity Post-Expansion Direct
Inventory, it's a sigma, it's a sine graph which forms it, the working capital requirement increases in Q1, it goes up to maybe in the Q2 and then it will steadily fall down from Q3 to Q4. So cash conversion cycle should be around between, now at present we are at 50 cash conversion cycle and it should roam around between 75 to 50 days.

Provides insight into the expected working capital requirements and cash flow dynamics post-capacity expansion.

Asked by Harsh Saraswat

3 min read 7 chapters

Detailed narrative

Strong FY26 Performance and Strategic Expansion

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.

Enhanced Product Portfolio and Energy Self-Sufficiency

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.

Improved Financial Health and Capital Efficiency

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.

Strategic Raw Material Procurement and Cost Dynamics

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.

Bihar Industrial Policy Support and Capex Outlook

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.

Refraining from Immediate FY27 Guidance

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.

Focus on Value-Added Products and Margin Accretion

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.

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