Zuari Industries Reports Strong Q2 Performance with 44% Higher Ethanol Production
Zuari Industries Limited (ZIL) reported significant improvements in Q2, with ethanol production up 44% and EBITDA rising from INR 3.5 crores to INR 8.9 crores. The company's sugar realization increased by 5.7% year-on-year, while finance costs reduced by INR 3 crores. ZIL's distillery achieved a record 311 operating days. Despite a slight decrease in revenue, the company turned profitable with a PAT of INR 3.50 crores compared to a loss in the previous year. ZIL plans to expand its bioethanol capacity and is focusing on an asset-light approach in real estate development.
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Zuari Industries Limited (ZIL) has reported a robust performance for the second quarter, marked by significant improvements in ethanol production and financial metrics. The company's strategic focus on its sugar, ethanol, and real estate businesses continues to drive growth and operational efficiency.
Key Highlights
- Ethanol production increased by 44% in Q2
- EBITDA improved from INR 3.5 crores to INR 8.9 crores
- Finance costs reduced by INR 3 crores
- Sugar realization up by 5.7% year-on-year
- Distillery achieved 311 operating days, the highest ever
Financial Performance
ZIL's financial results for Q2 demonstrate substantial improvements across key metrics:
| Metric | Q2 FY26 | Q2 FY25 | Change |
|---|---|---|---|
| Revenue | 204.50 | 207.40 | -1.4% |
| EBITDA | 8.90 | 3.50 | +154.3% |
| PBT (before exceptional items) | 18.60 | 0.40 | +4550% |
| PAT | 3.50 | -23.90 | Turned Profitable |
The company's EBITDA margin improved significantly, driven by higher sugar realizations and increased power rates from UPPCL.
Operational Highlights
Sugar and Ethanol Business
- Sugar sales volume decreased to 3.6 lakh quintals from 4.2 lakh quintals
- Sugar realization improved to INR 4,033 per quintal from INR 3,815 per quintal
- Ethanol production increased by 44%, with the distillery operating for a record 311 days
- Ethanol sales volume up by 7.6% for the quarter
Real Estate
- Zuari Infra World strengthened its position with a gross development value of INR 2,900 crores
- The St. Regis Dubai project is 86% complete, with handover expected by March 2026
Strategic Developments
Debt Reduction Plan: ZIL expects an INR 800 crores cash inflow from its Dubai real estate project starting Q2 FY27, which will be used for debt reduction.
Bioethanol Expansion: The company is set to commission a 180 KLPD distillery through its joint venture, Zuari Envien Bioethanol Private Limited (ZEBPL).
Focus on Real Estate: ZIL is pursuing an asset-light approach in real estate, focusing on the Development Management (DM) model for growth.
Future Outlook
Zuari Industries remains optimistic about its core businesses:
- Sugar and Ethanol: The company expects stable EBITDA margins of 10-12% in the sugar sector, despite recent increases in sugarcane prices.
- Bioethanol: ZIL plans to expand its bioethanol capacity to 1,000 KLPD over the next 3-5 years, subject to regulatory environment and market dynamics.
- Real Estate: The company aims to grow its DM business in the real estate sector, focusing on high-margin projects.
Athar Shahab, Managing Director of Zuari Industries, commented, "We are happy with the progress we have made. Our strategies are yielding results, particularly in improving the operational efficiency of our distillery and diversifying our real estate portfolio."
With a clear focus on debt reduction and strategic growth in its core sectors, Zuari Industries is positioning itself for sustained performance in the coming quarters.
Historical Stock Returns for Zuari Industries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -4.26% | -6.86% | -6.78% | +7.81% | -1.95% | +429.43% |
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