Zuari Industries Limited — Q3 FY26 earnings call

Call held 16 Feb 2026

Management summary

Zuari Industries reported a robust Q3 FY26 driven by record sugar crushing volumes and over 100% capacity utilization in its sugar factory. The company's consolidated revenue grew by 9.9% YoY, and its real estate subsidiary, Zuari Infra World, achieved a significant Gross Development Value. While debt reduction efforts are underway with expected inflows from the Dubai project, concerns persist regarding stagnant ethanol prices and overcapacity in the ethanol market.

Highlights

  • Sugar factory achieved highest ever Q3 crush of 67.28 lakh quintal, demonstrating over 100% capacity utilization.

  • Consolidated revenue for Q3 FY26 increased by 9.9% YoY to INR301.5 crores.

  • Ethanol sales saw a significant increase of 17.7% YoY in Q3 FY26.

  • Zuari Infra World achieved a Gross Development Value of INR3,100 crores and expanded into Bangalore.

  • Gross external debt (excluding working capital) reduced to INR1,848 crores from INR1,863 crores in the previous quarter.

Concerns

  • Ethanol prices remained stagnant despite a 16.7% increase in sugarcane SAP, negatively impacting profitability.

  • Significant overcapacity in the ethanol industry is a macroeconomic concern.

  • Regulatory challenges in Goa, including a new law restricting land use change, are delaying land monetization plans.

Key financials

  1. Standalone Revenue ₹254.7 Cr +2%YoY
  2. Standalone EBITDA ₹36.3 Cr -3.7%YoY
  3. Standalone PBT (pre-exceptional) ₹4.5 Cr +73.1%YoY
  4. Consolidated Revenue ₹301.5 Cr +10%YoY
  5. Consolidated PBT (pre-exceptional) ₹-18.6 Cr -21.5%YoY

What they filed

Q1 FY27: revenue up 21.2%, net profit up 110.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue237 235 272 257 241 +2%263 +12%284 +4%312 +21%
EBITDA4 -7 28 25 11 +175%-8 −8%30 +9%14 −44%
Net profit-15 -25 -21 -0 164 +1212%-26 −5%-32 −52%0 +110%
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

Share of Income
₹68.1 Cr Total
  • Zuari Infraworld Limited ₹36.4 Cr 53.5%
  • Simon India (EPC) ₹24.3 Cr 35.7%
  • Oil Tanking Joint Venture ₹7.4 Cr 10.9%

Capital allocation

high confidence
  • Debt Gross ₹1,848 Cr
    • Repayment Expected major portion of external debt repayment from inflows from Dubai project (INR800-900 crores) and an associate company (INR273 crores).
    Excluding working capital, the gross external debt of the company and its subsidiaries was INR1,848 crores, which was a shade lower than INR1,863 crores for the previous quarter.
  • Liquidity Liquidity disclosed Value of listed strategic investments as on 31st December 2025 was INR4,600 crores.
    The value of our listed strategic investments as on the 31st of December 2025 was INR4,600 crores, and which was a shade lower than the previous quarter because of the market movement.

Guidance & targets

Project Completion

  • St. Regis Dubai project completion Project Completion · by end of this financial year · High confidence 100% completion

    From 98% today

    Our flagship project which is St. Regis Dubai project is now nearing completion. The target was about 98%, but we have done 93.4%. We are now expecting to complete the project in all respects by the end of this financial year and commence the handovers by April of 2026.

    — Athar Shahab

Project Handovers

  • St. Regis Dubai project handovers Project Handovers · April of 2026 · High confidence commence handovers
    We are now expecting to complete the project in all respects by the end of this financial year and commence the handovers by April of 2026.

    — Athar Shahab

Ethanol Contracts

  • Zuari Envien Bioenergy contracts locked in Ethanol Contracts · through October · High confidence 20,000 kilo liter
    And we have locked in about 20,000 kilo liter of contracts, which will take us through October and then hopefully we will have the next round of OMC tenders which will give us the revenues in the coming financial year.

    — Athar Shahab

Distillery Operations

  • Distillery operating days Distillery Operations · FY27 · Medium confidence 300 plus days
    This year also if we are looking at, you can say, sugar season of '25-'26 or maybe let's say FY27, so we are operating our plant in a manner that we have sufficient our captive molasses availability to operate the plant for at least 300 plus days.

    — Nishant Dalal

Real Estate GDV

  • Zuari Infra World Gross Development Value (GDV) Real Estate GDV · current financial year · Medium confidence INR10,000 crores
    Our target itself has been we had set ourselves an internal target to do DM projects for at least INR10,000 crores in the current financial year itself.

    — Nishant Dalal

Debt Reduction

  • Repayment of external debt Debt Reduction · throughout the next financial year · Medium confidence major portion
    The inflows from Dubai project and an associate company are expected in the first quarter of the next financial year, which should help us repay major portion of the external debt. We are also working on other plans to de-leverage the balance sheet.

    — Athar Shahab

What to watch in Q4 FY26

St. Regis Dubai project completion and handovers

by end of this financial year (completion), April 2026 (handovers)
Current 93.4% complete, nearing completion
Target 100% completion, commencement of handovers

Why it matters

Crucial for realizing expected inflows (INR800-900 crores) which are key to debt reduction.

Our flagship project which is St. Regis Dubai project is now nearing completion. The target was about 98%, but we have done 93.4%. We are now expecting to complete the project in all respects by the end of this financial year and commence the handovers by April of 2026.

Risks & concerns

  • Stagnant Ethanol Prices

    medium

    Ethanol prices have remained stagnant despite a 16.7% increase in sugarcane SAP, negatively impacting profitability.

    Management acknowledged

  • Ethanol Market Overcapacity

    medium

    The overall macroeconomic situation in the ethanol market is a concern due to significant overcapacity in the industry.

    Management acknowledged

  • Regulatory Hurdles for Goa Land Monetization

    medium

    New laws restricting land use change in Goa are creating regulatory challenges for monetizing land holdings, not factored into current deleveraging plans.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Ethanol pricing and blending policy Direct
The overall macroeconomic situation in ethanol market remains a concern. As some of you may have noted, there seems to be significant overcapacity in the ethanol industry and I think a resolution must be found out to deal with it.

Highlights a key external risk to the ethanol business profitability and sustainability, despite internal operational efficiency.

Asked by Viral Jain

Sustainability of increased sugar crushing volumes Direct
if our mill is actually located in a very strategic position where the availability of raw material is not a critical concern for us. So during the season, it all depends on how quickly or how more we can crush. For us, we have been able to improve our cane payment cycle a lot over last three to four years. As a result of which our availability and confidence of farmers in supplying the cane to the company is going up every year.

Explains the underlying factors (strategic location, improved farmer relations) that support the record crushing volumes, suggesting sustainability.

Asked by Viral Jain

Real estate division's contribution to revenues/profits Direct
Our target itself has been we had set ourselves an internal target to do DM projects for at least INR10,000 crores in the current financial year itself. And when you see that those, if we achieve those targets, so even considering the 10% of DM fee which you just stated, it becomes a meaningful size.

Clarifies the scale and potential of the DM model, indicating future revenue potential despite current low contribution.

Asked by Saumil Shah

Land monetization in Goa and its impact on deleveraging Direct
So we are facing some regulatory challenges in Goa and there has been a new law that has been passed which is restricting the land change in land use, etcetera. So we are examining various options, you know, various legal options, etcetera. And therefore, we are not factoring it into our deleveraging plans as of now.

Reveals a specific regulatory hurdle impacting a potential asset monetization strategy, clarifying why it's not part of current deleveraging plans.

Asked by Saumil Shah

IPO plans for Zuari Infraworld Direct
I just want to place on record that there is no such proposal on the table. We are not contemplating any IPO of Zuari Infraworld.

Directly refutes market speculation or analyst assumptions about a potential IPO, providing clarity on the company's immediate plans for the subsidiary.

Asked by Rishi Gupta

Synergies in fertilizer business with Zuari Agro Chemicals Evasive
See, I think this question is best posed to Zuari Agro Chemicals. I don't think it is appropriate that we answer these questions. We are Zuari Agro is an associate company, right? We do not manage Zuari Agro Chemicals. We have an investment, and that's it and I think you should ask this question to Zuari Agro Chemicals.

Highlights the distinct operational management of associate companies, indicating that Zuari Industries does not directly control or manage their day-to-day synergies, which might be relevant for understanding the group structure.

Asked by Pratik Shah

2 min read 5 chapters

Detailed narrative

Record Sugar Crushing Performance

Zuari Industries achieved its highest ever Q3 crush of 67.28 lakh quintal, significantly up from 60.79 lakh quintal last year. The sugar factory operated at over 100% capacity utilization during the quarter, a rare feat in the industry, driven by improved cane development and procurement. This operational efficiency contributed to a robust performance in the Sugar, Power, and Ethanol (SPE) division, with power generation up 6.7% and ethanol production up 4.8%.

Ethanol Business Challenges and Outlook

While ethanol production increased by 4.8% and sales by 17.7% in Q3 FY26, the segment faces headwinds from stagnant ethanol procurement prices. Despite a 16.7% increase in sugarcane SAP, the government has not yet raised ethanol prices, negatively impacting profitability. Management also noted significant overcapacity in the ethanol market, calling for a resolution to ensure the business model's sustainability, and aims to operate its distillery for 300+ days annually.

Real Estate DM Model Expansion

Zuari Infra World, the company's real estate subsidiary, continues to advance its asset-light Development Management (DM) model, achieving a Gross Development Value (GDV) of INR3,100 crores. The company has expanded its presence by entering Bangalore and is actively pursuing DM projects in Hyderabad and Kolkata. Management has an internal target of INR10,000 crores GDV for the current financial year, viewing DM as a key growth area for future revenue generation.

Debt Reduction and Asset Monetization

The company's gross external debt (excluding working capital) reduced slightly to INR1,848 crores from INR1,863 crores in the previous quarter. Significant inflows of INR800-900 crores from the St. Regis Dubai project, expected by April 2026, and INR273 crores from Zuari Agro Chemicals, are anticipated to substantially reduce debt in the next financial year. However, regulatory challenges in Goa, including new laws restricting land use change, are currently preventing the monetization of land holdings there.

EPC and Joint Venture Performance

Simon India, the EPC arm, commissioned a fifth evaporator project for PPL worth INR55.5 crores and secured new orders totaling INR100 crores, focusing on deep expertise in the fertilizer segment. The Oil Tanking joint venture saw its income increase to INR7.4 crores from INR5.5 crores, primarily due to renegotiated rates with OMCs. Zuari Envien Bioenergy, the ethanol JV, commenced operations in January 2026 and has secured 20,000 kilo liters of contracts, contributing to revenues from the current quarter.

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