Q1 2027 Manorama Industries Ltd Earnings Call Transcript
Key Points
- Revenue grew 39.5% year-on-year to INR404 crores, crossing the INR4,000 million quarterly revenue milestone for the first time.
- Profit after tax increased 67.6% year-on-year to INR79 crores, with PAT margin expanding by 326 basis points to 19.5%.
- EBITDA grew 42.2% year-on-year to INR106 crores, with EBITDA margin expanding by 49 basis points to 26.3%.
- Expanded sourcing footprint in West Africa through a new subsidiary in Chad and acquired land in Burkina Faso for a processing facility, enhancing supply chain resilience.
- Successfully completed a QIP, strengthening the balance sheet and providing financial flexibility for growth initiatives.
- R&D center recognized by DSIR continues to drive product innovation, including development of enzymatic cocoa butter equivalent (ECB) for forward integration.
- Capacity utilization is expected to reach 80-85% for FY27, with debottlenecking adding 4,500 tonnes to reach 52,000 tonnes per annum.
- Pricing for value-added products has remained stable despite macroeconomic volatility, supported by a cost-plus model.
- Export-to-domestic mix stands at 60:40, reflecting strong global customer base and healthy domestic demand.
- Management is confident in delivering healthy top-line growth for FY27, with further scope for improvement as the year progresses.
- Gross margins have declined this quarter, though management attributes this to freight cost timing and by-product realization.
- Subsidiaries, particularly in West Africa and Brazil, are still in build-out phase, incurring operating costs without corresponding revenue, which drags consolidated margins.
- The company faces indirect impacts from geopolitical tensions, including higher freight and logistics costs.
- There is a risk of export bans on shea nuts in certain African countries, such as Nigeria, which could affect sourcing, though the company has diversified suppliers.
- Other income includes INR13 crores from forex gains, which may not be sustainable and could normalize in future quarters.
- The new CapEx of INR460 crores will not contribute significantly until FY29, as commissioning is expected around Q3 FY28 with gradual ramp-up.
- Employee costs may see a run rate of INR14-15 crores per quarter, which could be higher than the current quarter's level.
- The company has not provided specific guidance on revenue or margin sustainability, citing business risks and quarterly volatility.
- Working capital requirements are expected to increase significantly with the expansion, though management has secured bank limits and QIP proceeds.
- The recovery of the debit note from a supplier for a quality issue is uncertain, and the company is still in the process of claiming the full amount.
Ladies and gentlemen, good day, and welcome to Manorama Industries Limited Q1 FY27 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Hiral Keniya from EY LLP. Thank you, and over to you, sir.
Thank you, Hudha. Good afternoon, everyone. On behalf of Manorama Industries Limited, I welcome you all to the company's Q1 FY27 conference call. To discuss the performance of the company and to answer your questions, we have with us the management team comprising of Mr. Ashish Saraf, Chairman and Managing Director; Mr. Ashok Jain, Director and CFO; Mr. Pankaj Rathi, DGM, Accounts and Finance; Mrs. Ekta Soni, AVP, Investor Relations; and Mr. Deepak Sharma, Company Secretary and Compliance Officer.
Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain forward-looking statements that are subject to various risks, uncertainties and other factors, which will be beyond
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