Gokul Agro Resources Ltd (GOKULAGRO) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Gokul Agro Resources Limited Q2 and H1 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Krishna Patel from E&Y. Thank you, and over to you, ma'am.
Krishna Patel (Ernst & Young): Thank you, Ikra, and good afternoon, everyone. A warm welcome to all participants joining the Q2 FY '27 and H1 FY '27 earnings conference call of Gokul Agro Resources. Joining us today is Mrs. Dhara Chhapia, the Chief Financial Officer, who will discuss the company's operational and financial performance for the quarter and half year and address your questions thereafter. Before we begin, I would like to remind you that certain statements made during this call may constitute forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties that could cause actual results to differ materially from those expressed or implied. With that, I would like to hand over the call to Mrs. Dhara Chhapia for her opening remarks. Thank you, and over to you, ma'am.
Dhara Chhapia (Gokul Agro Resources Ltd): Thank you, Krishna, and good afternoon, everyone. On behalf of Gokul Agro Resources Limited, I warmly welcome all of you to our earnings conference call to discuss the financial and operational performance for Q2 financial
Dhara Chhapia (Gokul Agro Resources Ltd): 27 and H1 of FY27. This is an important milestone for us as this is our first earnings conference call. We are pleased to begin a more structured and regular engagement with the investor and analyst community. Since this is our first earnings call, before discussing our quarterly performance, I would like to spend some time introducing the company, our journey from an edible oil processor to an integrated agri-processing platform. The roots of our business go back over four decades in the edible oil industry. Gokul Agro Resources Limited became an independent company following the demerger of the edible oil business from Gokul Refoils and Solvent Limited and was subsequently listed on the NSE and BSE. Since then, our journey has been one of consistent expansion across capacities, geographies, products, and customer segments. Over the years, we have progressively expanded our refining capacities, developed seed crushing capabilities, entered castor derivatives and speciality fats, created large liquid storage infrastructure, and built an increasingly diversified processing platform. Between FY22 and FY24, we expanded our geographic footprint by setting up a refinery near Krishnapatnam Port in Andhra Pradesh and acquiring the Haldia refinery in West Bengal. In FY25, we acquired our Mangalore refinery, giving us a manufacturing presence on India's southwestern coast. We also initiated our oil palm plantation program under the National Mission on Edible Oils - Oil Palm. In FY26, we entered bio-diesel with a 300 ton per day facility at Gandhidham and increased our focus on building our branded consumer business. Today, we have evolved from a regional edible oil processor into a pan-India integrated agri-processing platform with four strategically located manufacturing facilities at Gandhidham, Krishnapatnam, Haldia, and Mangalore, a diversified product basket, a nationwide distribution network, and an international presence across multiple markets. To put the scale of this transformation into perspective, revenue from operations increased from approximately ₹8,387 crores in FY21 to ₹24,077 crores in FY26, representing a five-year CAGR of 23%. Over the same period, EBITDA including other income increased from approximately ₹157 crores to ₹715 crores, representing a five-year CAGR of 35%, while PAT increased from ₹45 crores to ₹387 crores, representing a five-year CAGR of 54%. Business model: At its core, our business is built around three fundamental strengths: First, sourcing. Second, manufacturing and processing scale. And third, market access. Our integrated value chain spans sourcing, seed crushing, refining, storage, value-added processing, packaging, branded products, domestic distribution, and exports. This integration is important because edible oils and agri-commodities operate in a dynamic environment influenced by global commodity prices, crop availability, currency movements, freight rates, government policies, and import duties. Our sourcing capabilities, port-linked infrastructure, large storage capacities, and diversified product portfolio allow us to respond to these market dynamics and allocate our resources across products and markets. Today, our business broadly comprises edible oils, castor oil and derivatives, speciality fats, bio-diesel, and various agri-processing by-products. Edible oils: the core engine of scale. Edible oils remains, by far, our largest business. Our portfolio spans palm oil, soybean oil, sunflower oil, mustard oil, groundnut oil, cottonseed oil, rice bran oil, palmolein, and vanaspati, among others. During H1 FY27, edible oils accounted for approximately 85% of consolidated volume. Importantly, we are not dependent on one edible oil category. Within our operating portfolio, palm and soybean oils are the largest categories, complemented by sunflower and several other edible oils. This provides flexibility in both sourcing and sales depending upon relative commodity economics and consumer demand. Our objective in edible oils is not simply to chase
Dhara Chhapia (Gokul Agro Resources Ltd): segments to progressively improve the quality of our business. One of the major strengths of Gokul Agro is our multi location manufacturing platform. Our Gandhidham plant is our largest and most diversified location, with approximately 3,400 tonnes per day of refining capacity, 3,200 tonnes per day of seed crushing capacity, 300 tonnes per day of biodiesel plant and substantial storage infrastructure and value-added product capabilities. Kakinada provides approximately 1,400 tonnes per day of refining capacity, while Haldia provides approximately 1,350 tonnes per day. We also have our Mangalore facility on India's west coast. The significance of these locations is strategic. They provide us access to multiple ports, multiple consumption centres and different regional markets. The reduced dependence on any single manufacturing base provide supply chain flexibility and enable us to serve customers more efficiently across India. Another strength is that we operate across multiple channels. Historically, B2B has been our largest business, serving institutional as well as non-institutional customers. Today, however, we are deliberately building additional engines around exports and branded B2C. During H1 FY '27, approximately 79% of channel revenue came from B2B, 13% from exports and 8% from B2C retail. By comparison, B2C represented around 5% in FY '26, demonstrating the direction in which we are gradually moving. Our institutional customer base includes some of India's established food and consumer companies, such as Parle Biscuits, ITC, Britannia, Balaji Wafers and others. B2B gives us scale. Institutional relationships improve the quality and stability of the customer mix. Exports provide geographic diversification and additional opportunities. And B2C has the potential to improve brand strength and the margin profile over the long longer term. That combination is central to how we think about the future of Gokul Agro. Building a consumer franchise. Historically, our biggest strengths have been sourcing and manufacturing. We are now working to translate these strengths into a much stronger consumer franchise. Our principal consumer brands include Vitalife, Mahek, Sunrich and Zaika, covering soybean, sunflower, mustard, groundnut, cottonseed, rice bran, palm and other edible oils. Vitalife is being developed as a broader pan-India growth brand, while Sunrich has an established focus in Karnataka. The incremental challenge is to deepen consumer awareness, expand retail availability and create stronger brand preference. Our overall network comprises more than 650 dealers and distributors, with our products reaching 28 states and union territories. During Q2, we made further inroads into Jammu and Kashmir by appointing a C&F depot and distributors, while strengthening Vitalife's presence across Punjab, Haryana, Gujarat and Karnataka. We have initiated brand visibility through modern retail formats, strengthened social media and point of purchase communication, and launched sales force automation to improve secondary sales visibility, stock movement and field force productivity. Our objective is to build distribution first, create repeat consumption and consumer trust, and progressively improve the contribution from branded sales. Exports are another important element of our strategy. We have international presence across 33 countries, encompassing Asia, Europe, Middle East and America. During H1 FY '27, export markets represented 13% of revenue. Our H1 exports were diversified across markets, including Singapore, China, Germany, UAE, USA and several European and Asian countries. This geographic diversity is increasingly important as our portfolio moves further towards value-added products, castor derivatives and biodiesel. Castor derivatives form another differentiated part of our portfolio. We manufacture castor oil as well as several value-added derivatives, including 12-HSA, hydrogenated castor oil, ricinoleic acid and other specialty products. These products
Dhara Chhapia (Gokul Agro Resources Ltd): a variety of industrial and specialty applications and provide us participation beyond conventional food oils. Our long-term objective is to progressively enhance value addition by moving for- further downstream from basic processing towards derivatives and specialty formulations. Our specialty fats portfolio addresses bakery, confectionery, food processing and institutional applications. Our range includes products such as Crispell, Pride, Biscopride, Puffpride, and the newly introduced Rich Care. Although specialty fats represent a smaller proportion of our current overall volume, we will see them as strategically important because they allow us to leverage our existing edible oil processing expertise for more specialized customer requirements. This is again consistent with our wider strategy of gradually improving our value-added product mix. Biodiesel is our newest export revenue growth platform and has already begun making a meaningful contribution. We commissioned our 300 ton-per-day biodiesel facility at Gandhidham, which got fully operational during Q1 of FY '27. The facility allows appropriate residues and non-edible fractions from the broader processing ecosystem to be converted into a renewable fuel product. Our biodiesel facility is ISCC certified, supporting access to eligible international markets, subject to regulatory and market requirements. During Q2 FY '27, biodiesel generated revenue of Rs 237 crores, while during H1, the revenue of Rs 596 crores. We see biodiesel as one of the newer growth pillars and that can complement our established edible oil franchise over the medium term. Another long-term initiative is our oil palm program. Under the National Oil Palm Program, approximately 550 hectares were completed during FY '25 and '26, with another 900 hectares under development for completion during '27. Oil palm is, by its nature, a long duration initiative. We, therefore, do not look at this program through the lens of near-term, quarterly financial returns. Strategically, it represents an opportunity to participate in development of a domestic raw material base, strengthen backward integration, and contribute towards India's longer-term effort to reduce dependence on edible oil. Turning now to the financial performance during Q2 of FY '27. Revenue from operations was Rs 7,481 crores, representing year-on-year growth of 13%. EBITDA, including other income, increased by 41% to Rs 276 crores. EBITDA margin increased from 2.94% to 3.68%, representing an improvement of approximately 74 basis points year-on-year. PAT increased 40% to Rs 150 crores. PAT margin consequently improved from 1.61 to 2%. Earnings per share increased from 3.43 to 4.95. Effective 24th September 2026, the government revised the import duty structure on key edible oils, with the objective of reducing landed cost and improving affordability for Indian consumers. In the period leading up to the announcement, we witnessed some temporary deferment of purchases across the trade as dealers and distributors awaited clarity on the revised duty structure and its impact on domestic edible oil prices. This resulted in lower offtake during September and subsequent and consequently contributed to higher inventory levels at the end of the quarter. Following the announcement, the market has progressively adjusted to the revised pricing environment, and channel activity has started normalizing. We, therefore, view the increase in inventory largely in the context of this temporary timing impact rather than an indication of structural weakness in underlying demand. H1 FY '27 financial performance: Revenue from operations increased by 10% year-on-year to Rs 12,763 crores. EBITDA, including other income, grew 46% to Rs 493 crores. EBITDA margin expanded from 2.92% to 3.86%, an improvement of approximately 94 basis points.
Dhara Chhapia (Gokul Agro Resources Ltd): crores, PAT margin improved from 1.54% to 2.14%. Earning per share increased from 5.86 to 9.11. The important point is that profitability grew materially faster than revenue during the first half. This reflects our continued emphasis on sourcing discipline, operating leverage, customer and product mix and disciplined management of commodity exposure. A stronger balance sheet to support growth. As our scale has increased, our balance sheet has also strengthened. Our net worth has increased from approximately 345 crore in FY '21 to 1,697 crores as of 30th September 2026, representing nearly fivefold growth. Our debt-to-equity ratio, after reaching 0.77x in FY '24, reduced to 0.41x at the end of FY '26 and further to 0.36x as of September 2026. This is especially important because this balance sheet improvement has been achieved while we simultaneously expanded our manufacturing footprint and invested in growth. We intend to retain this financial discipline as we execute the next phase of capital expenditure. Capacity expansion, preparing for the next growth cycle. Our existing manufacturing footprint has achieved high utilization in key refining operations. This gives us confidence to invest further behind demand. We are undertaking capacity additions across our four manufacturing locations that are expected to add approximately 8 lakh tonnes per annum of capacity. For us, the purpose of this investment extends beyond simply increasing nameplate capacity. It will provide greater throughput, better fixed cost absorption, shorter supply chain lead times, improved geographic flexibility, the capacity to support growth in B2B and B2C and greater ability to serve incremental market demand. Renewable energy and operating efficiency. Sustainability investments are also increasingly linked to operating economics. During Q1 FY '27, we commissioned a 15 MW captive solar plant in Gujarat. We are also pursuing additional captive solar projects, including 4 MW in Andhra Pradesh, 4 MW in Karnataka and another 10 MW in Gujarat. These investments are intended to reduce our dependence on conventional power, lower energy costs and improve the sustainability profile of our operations. Going forward, we intend to maintain transparent and consistent communication with the capital markets and help investors develop a deeper understanding not only of our quarterly performance, but also how the underlying business is evolving. As a starting point, we intend to conduct earnings conference calls following our half year and full year financial results. With that, I conclude my opening remarks. Thank you for your time and attention. We will now be happy to take your questions.
Moderator: Thank you very much, ma'am. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: Ladies and gentlemen, we will wait for a while before the conference starts. Thank you.
Moderator: A reminder to all the participants. If you wish to ask a question, please press star and one. The first question is from the line of Shanaya Jain, an individual investor. Please go ahead.
Shanaya Jain: Hello, hi sir. Congratulations on a good set of numbers. I just have had like a few questions. First, revenue increased by 13% year-on-year in Q2 FY '27 and 10% in H1 FY '27. So, how much of this growth came from volume, commodity price realization, and new business such as biodiesel?
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