Deccan Gold Mines LtdQ1 FY26Non - Ferrous Metals

Deccan Gold Mines Ltd

Q1 FY26 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 1

Fundraise

Yes

Order

N/A

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Jonnagiri project expected to produce around 600 kg of gold in FY2027, increasing to 800 kg in FY2028, with potential to reach 1 ton annually thereafter.
→FY2027 revenue forecast for Jonnagiri is approximately Rs. 900 Crores with an EBITDA margin of 75%.
→Expansion plans include increasing plant capacity beyond current 1000 tons/day to 2000+ tons/day, subject to obtaining necessary permissions.
→Additional projects like Bhalukona, Spain, Tungsten, Finland, Tanzania, Mozambique are progressing; Mozambique drilling planned soon.
→Kyrgyzstan project requires Rs. 100 Crores investment in near term to operationalize; expected production ramp-up by end of FY2027.
→Potential large funding needs Rs. 500-700 Crores for progress across projects.
→Overall, company targets scaling up production across multiple mines over 3-5 years leading to significant growth in sales and volumes.

Margin guidance

Category 1

→FY2027 profitability expected around Rs.180 Crores, translating to an EPS of about Rs.10 on the current equity base.
→Expansion in Jonnagiri project aims to increase gold production from 600kg (FY2027) to 800kg (FY2028), potentially reaching 1 ton annually.
→EBITDA margins for gold mining projects are forecasted around 70-75%, with PAT margins at about 45% at peak production, reflecting strong profitability.
→Geomysore project expected to generate Rs.120 Crores PAT, though dividends may not be declared during initial expansion years.
→Kyrgyzstan project anticipated to improve PAT margins from ~30% in FY2027 to 40-45% in subsequent years.
→Future growth supported by expansions, resource upgrades, and new projects including Bhalukona and Spain.
→Possibility of unlocking value through IPO of Geomysore down the line.
→Capital raising plans (QIP, FPO) target Rs.500-700 Crores to fund expansions and sustain growth momentum.

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Fundraise plans

Yes

→Deccan Gold Mines is planning capital raising primarily through equity and debt to fund projects.
→They anticipate a funding requirement of approximately Rs.800 to Rs.1000 Crores (~$100 million) over the next year, particularly for setting up two projects.
→Equity raising is expected via Follow-on Public Offer (FPO), complemented by debt funding.
→Management is preparing for FPO paperwork in advance and targeting a capital raise around Dhanteras to leverage gold buying season.
→Rs.100 Crores is needed for operationalizing the Kyrgyzstan project by August 2026.
→Internal accruals from existing operations like Geomysore and Kyrgyzstan projects are expected to fund underground mining expansions, reducing the need for additional immediate funding.
→Promoters, including Australian investors, are interested in participating through debt or equity infusion.
→Management acknowledges the need to expedite fund raising with merchant bankers to avoid delays.

Order book

The transcript provided from Deccan Gold Mines Limited's Q4 FY 2025-2026 investor call does not explicitly mention details regarding the current or expected order book or pending orders. Most discussions focus on: - Capital requirements for various projects (Kyrgyzstan, Bhalukona, Spain). - Plans for funding through rights issues, FPOs, and promoter contributions. - Project timelines and progress updates for Jonnagiri, Altyn Tor, and other mines. - Regulatory, operational, and policy engagements. - Production guidance and financial performance forecasts. No specific data on order books or pending contractual orders has been disclosed in the available transcript.

Capex plans

Yes

→Capital intensive nature of mining acknowledged; ongoing need for capital infusion.
→Next year funding requirement estimated at Rs.800 to Rs.1000 Crores (~$100 million) for two projects.
→Typical capital expenditure (capex) per mine around Rs.350-400 Crores for 1000 tonnes per day operational capacity (similar for Bhalukona).
→Underground mining in Kyrgyzstan to start after 3-4 years; incremental capital of Rs.50-100 Crores expected for shaft development.
→Rs.100 Crores planned for Kyrgyzstan project operationalization (by August).
→Bhalukona project estimated to need Rs.400 Crores to reach mine lease application stage.
→Strategy to raise funds includes equity (FPO, QIP, rights issue) and debt; potential first FPO targeted around Dhanteras.
→Internal accruals expected to partially fund expansions, especially in Geomysore and underground mining in Kyrgyzstan.
→Ongoing land acquisition progressing for Jonnagiri; no immediate further dilution anticipated for Geomysore.

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