Gulshan Polyols Reports Strong Q3 FY26 Results with 211% EBITDA Growth
Gulshan Polyols Limited reported exceptional Q3 FY26 results with EBITDA growing 211% YoY to Rs. 85.6 crores and PAT surging 504% to Rs. 40.9 crores on revenue of Rs. 626.7 crores. The ethanol segment drove growth with Rs. 1,200 crores order book and 26 crore litres annual capacity. EBITDA margins expanded 920 bps to 13.7% aided by softening raw material costs and government FCI rice mandate. The company received Rs. 21.8 crores in state incentives and targets FY26 revenue of Rs. 2,300 crores with 9-10% EBITDA margins, while FY27 guidance stands at Rs. 2,600-2,800 crores assuming 80-90% capacity utilization.
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Gulshan Polyols Limited delivered exceptional financial performance in Q3 FY26, demonstrating strong operational recovery across key business segments. The multi-product company, operating nine manufacturing facilities across India, reported significant improvements in profitability driven by ethanol segment strength and favorable raw material dynamics.
Financial Performance Highlights
The company's Q3 FY26 results showcased remarkable growth across key financial metrics:
| Metric | Q3 FY26 | Growth (YoY) |
|---|---|---|
| Revenue | Rs. 626.7 crores | - |
| EBITDA | Rs. 85.6 crores | +211% |
| EBITDA Margin | 13.7% | +920 bps |
| Profit After Tax | Rs. 40.9 crores | +504% |
For the nine-month period, consolidated EBITDA margins stood at 9.4%, aligning with the company's stated guidance range of 9-10%. The margin expansion was primarily attributed to softening raw material prices and improved operational leverage.
Ethanol Segment Drives Growth
The ethanol division emerged as the primary growth engine, delivering the company's strongest results to date. Key performance indicators for the segment include:
| Parameter | Details |
|---|---|
| Current Orders | Rs. 1,200 crores |
| Volume Allocation | 17 crore litres |
| Total Capacity | 26 crore litres per annum |
| Long-term Contracts | 13 crore litres |
| EBITDA per Litre | Rs. 9-10 |
The segment benefited from successful capacity ramp-up at plants in Madhya Pradesh and Assam, with current utilization levels at 65-70%. The company expects full utilization of distillery capacity in FY26 and FY27, supported by improving industry demand.
Policy Support and Raw Material Benefits
A significant policy development impacting operations was the government mandate requiring ethanol producers to procure 40% of rice requirements from FCI at fixed prices. This policy created positive spillover effects by softening open market prices for key raw materials including maize and broken rice. Current maize prices range between Rs. 18-21 across different locations, with Madhya Pradesh operations benefiting from Rs. 18-19 per kg rates.
The grain mix for ethanol production comprises 40% FCI rice (mandated), 45% maize, and 15% broken rice. Additionally, by-products contribute approximately 25% additional revenue on top of ethanol sales, with DDGS being a key revenue contributor.
Segment-wise Performance Analysis
The company operates across three main segments with varying performance trajectories:
Ethanol Division: Expected to contribute Rs. 1,400-1,500 crores in FY26, representing over 60% of total revenue. The segment maintains sustainable EBITDA margins of 12-13% excluding incentives.
Grain Processing Division: Generated Rs. 147 crores in Q3 FY26 but faced margin pressures due to industry-wide overcapacity in starch. The division's product mix includes 60% sorbitol and by-products, 30% starch, and 20% fructose. While sorbitol remains EBITDA positive, starch operations face challenges.
Mineral Chemical Division: Delivered steady performance with consistent margins, providing predictable cash flows and operational stability.
Financial Incentives and Cash Flow
The company received Rs. 21.8 crores from MPIDC towards state and industry promotion incentives for Madhya Pradesh operations. This includes PLI benefits for FY24 and FY25, with FY26 incentives expected in Q2-Q3 FY27. The company also reversed Rs. 5.36 crores in interest subvention provisions, adopting a cash-received basis for accounting.
Forward Guidance and Strategic Outlook
Management provided comprehensive guidance for upcoming fiscal years:
| Period | Revenue Target | Key Assumptions |
|---|---|---|
| FY26 | Rs. 2,300 crores | Current capacity optimization |
| FY27 | Rs. 2,600-2,800 crores | 80-90% utilization |
| Maximum Potential | Rs. 3,000 crores | Full capacity utilization |
Consolidated EBITDA margins are expected to remain in the 9-10% range for both FY26 and FY27. The company plans no incremental capex until FY27, focusing instead on cash flow improvement and working capital optimization. Any fresh capex initiatives are planned for FY28, with emphasis on specialty chemicals and import substitution products.
Market Position and Future Strategy
With India's ethanol blending program achieving the 20% milestone, the company is well-positioned for future growth. Management expects blending ratios to increase gradually, following Brazil's roadmap toward higher blending levels and flexi-fuel vehicle adoption. The company maintains a debt-equity ratio of 0.6 with working capital borrowing costs at 7.25%.
For the grain processing segment, the company is exploring specialty chemical opportunities and import substitution products, moving away from commodity-based operations toward higher-margin specialty applications. Export markets for starch and derivatives are showing recovery as Indian products regain competitiveness with current raw material pricing.
Historical Stock Returns for Gulshan Polyols
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.60% | +10.62% | +10.79% | -6.20% | -11.71% | +101.97% |
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