Q1 2027 Zuari Industries Ltd Earnings Call Transcript
Key Points
- Sugar sales volume increased 29% year-on-year to 4.7 lakh quintals, with average realizations improving to INR4,116 per quintal.
- The St. Regis Residence project in Dubai reached 100% completion, with profit repatriation commenced and INR142.58 crore already received in the current quarter.
- The company is on track to receive up to INR900 crore in profit repatriation from the Dubai project during FY27, which will significantly aid deleveraging.
- The value of listed strategic investments rose 15% quarter-on-quarter to INR4,223 crore as of June 30, 2026.
- The average cost of borrowings declined by 56 basis points year-on-year to 9.73%, reflecting improved financial management.
- The ethanol joint venture, Zuari NBN Bioenergy, has stabilized operations and secured orders until October 2026.
- The real estate subsidiary has a development management order book of about INR6,000 crore, with a new 14.8-acre plotted development project in Bangalore and marketing activities underway for the Hyderabad project.
- Sugar prices have spiked 10% over the past month to record highs, with a supportive pricing environment expected to boost realizations.
- The company expects repayment of the INR258 crore loan from Zuari Agrochemicals in the current quarter.
- The company is actively exploring inorganic growth opportunities and digital/AI-led initiatives to improve efficiency.
- Sugar margins remained under pressure due to an 8% increase in sugarcane prices (SAP), which rose to INR400 per quintal.
- Consolidated profit after tax was marginal at INR0.05 crore, with a loss before tax of INR5.4 crore, reflecting weak core profitability.
- Standalone profit after tax widened to a loss of INR9.5 crore from INR3.9 crore in the same quarter last year.
- Ethanol realizations remained static, weighing on margins, and the company had to forgo purchasing outsourced molasses due to uneconomical prices.
- Simon India's total income declined to INR11.7 crore from INR15.9 crore, impacted by deferred CapEx in the engineering and construction sector due to the West Asia crisis.
- The insurance broking business saw gross return premium drop to INR20.8 crore from INR33.3 crore year-on-year.
- The furniture division continues to incur losses, with no clear revival plan yet, and a decision is expected only by the end of the fiscal year.
- Land monetization plans in Goa have been put on hold due to regulatory hurdles and increased circle rates.
- The company faces a potential exposure of INR507 lakh related to an ethanol export fee case in Uttar Pradesh, though no provision has been made.
- The company's ethanol expansion plans remain on hold due to significant overcapacity in the sector, with no clarity on future demand.
Ladies and Gentlemen, good day and welcome to Q1 FY27 earnings conference call of Zuari Industries Limited. (Operator Instructions)
I would now hand the conference over to Mr. Aryan from MUFG Intime. Thank you and over to you, sir.
Thank you, Muskan. Good afternoon, everyone, and a very warm welcome to all participants on the Q1 FY27 earnings conference call of Zuari Industries Limited. Today on this call, we have Mr. Athar Shahab, Managing Director; Mr. Alok Saxena, Executive Director; Mr. Jatin Jain, Chief Financial Officer; Mr. Yadvinder Goyal, Company Secretary; and Mr. Alok Banerjee, Chief Executive Officer of Zuari Infraworld India Limited, a wholly owned subsidiary, and the real estate arm of Zuari Limited.
[Ashlema], before we start this call will contain some forward-looking statements which may be based upon our beliefs, opinion, and expectations of the company. As of today, these statements are not a guarantee of future performance and will involve unforeseen risks
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