Gandhar Oil Refinery (India) Ltd has announced a significant change in its business structure, deciding to terminate its joint venture agreement with ESPE Oils FZC. The company's Board of Directors approved this decision during a meeting held on September 23, 2025, which will result in the winding up of the joint venture company, Texol Oils FZC.

Joint Venture Details

Gandhar Oil Refinery currently holds a 50% stake in Texol Oils FZC, which operates under a Commercial License from Hamriyah Free Zone Authority Sharjah. The joint venture company was established to leverage synergies between Gandhar Oil Refinery and ESPE Oils FZC, but recent developments have led to a reassessment of this partnership.

Reasons for Termination

According to the company's disclosure, the decision to terminate the joint venture was reached mutually by both parties. The primary reason cited for this move is that the separate structure was no longer beneficial to either party due to changed circumstances.

Regulatory Approvals and Next Steps

The termination of the joint venture agreement and the subsequent winding up of Texol Oils FZC are subject to regulatory approvals. Gandhar Oil Refinery will need to obtain approval from the Registrar to terminate all existing licenses of the joint venture company.

Board Meeting Details

The decision was made during a board meeting that commenced at 7:30 p.m. and concluded at 8:15 p.m. on September 23, 2025. The company has duly informed the stock exchanges about this development in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Impact on Operations

While the immediate impact on shareholders is not explicitly stated, the company's decision to wind up the joint venture suggests a strategic realignment. As the situation develops, more details may emerge regarding the timeline for the joint venture's termination and any potential financial implications for Gandhar Oil Refinery.

Revenue Performance

Gandhar Oil Refinery 's consolidated revenue for Q1 stood at ₹9,029.61 crore, marking a decrease from ₹9,617.25 crore in the previous quarter. This represents a quarter-on-quarter decline of approximately 6.11%.

Profit Surge

Despite the revenue dip, Gandhar Oil Refinery witnessed a remarkable surge in its bottom line. The company's consolidated net profit more than doubled to ₹262.29 crore in Q1, compared to ₹116.72 crore in the previous quarter, showcasing a substantial growth of about 124.72%.

EBITDA and Margin Improvement

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a significant increase:

This improvement in EBITDA and EBITDA margin indicates enhanced operational efficiency and cost management by the company.

Segment Performance

Gandhar Oil Refinery primarily operates in the manufacturing and trading of petroleum products and specialty oils. The company's focus on this segment has allowed it to maintain its market position despite challenging market conditions.

Balance Sheet and Financial Position

As per the LODR data, the company's board meeting approved the unaudited standalone and consolidated financial results for the quarter. The company's financial position remains robust, with a paid-up equity share capital of ₹195.76 crore (face value ₹2 per share).

Management Commentary

While specific management comments were not provided in the available data, the significant improvement in profitability and operational metrics suggests that the company's strategic initiatives and cost optimization efforts have yielded positive results.

Outlook

The substantial increase in profitability, despite a slight revenue decline, indicates Gandhar Oil Refinery's ability to navigate market challenges effectively. The company's focus on operational efficiency and its strong presence in the petroleum products and specialty oils segment position it well for future growth.

Investors and stakeholders will likely keep a close watch on how Gandhar Oil Refinery maintains this profitability trend and addresses the revenue challenges in the coming quarters.