Modi Naturals LtdQ3 FY25Agricultural Food & other Products

Modi Naturals Ltd

Q3 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 3

→**Consumer division:** Anticipated growth driven by new products like ready-to-eat snacks and expanded presence in Tier 2 and Tier 3 markets.
→**Ethanol division:** Expected strong growth supported by favorable industry dynamics, capacity expansion to 310 KLPD starting December 2025, and growing fuel consumption (motor spirit up by 8% YoY).
→**Bulk division:** Expected improvement in the second half of the year due to fresh crop arrivals and price normalization.
→**Overall revenue:** Modest growth in H1 FY’26 with confidence to meet full-year guidance despite short-term GST disruptions.
→**Long-term target:** FMCG division aims to reach INR 500 crores in revenue over the coming years.
→**Volume disclosure:** Management currently does not share volume data but acknowledges underlying volume growth.

Category 3

→Modi Naturals is confident of achieving their full-year guidance for FY’26 with no upward revision announced yet but they are on track.
→They expect a stronger performance in H2 FY’26 driven by growth from all three divisions (consumer, bulk, ethanol).
→Bulk division is expected to be materially stronger in H2 due to fresh crop arrivals and price normalization.
→Ethanol division expects good growth in FY’27 with optimum capacity utilization post expansion and capacity stabilization.
→FMCG division aims for long-term growth to reach INR 500 crores revenue, focusing on premiumization, marketing, new products (e.g., ready-to-eat snacks), and expanding presence in Tier 2/3 cities.
→Advertising investments are strategic for future brand strength and volume growth.
→Operational leverage from ethanol capacity expansion expected to improve margins and EBITDA in FY’27.
→Management has not provided specific FY’27 EPS or operating profit guidance yet.

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Yes

→Modi Naturals currently has the option to raise capital if needed but is fairly okay on the capital front at the moment.
→They expect strong internal approvals over the next 12 to 18 months, which should help manage most of their financing needs, including the option to pay borrowings early.
→No explicit mention of immediate plans for new fundraising through debt or equity was made during the call.
→The company is confident in handling borrowings and capital without requiring additional fundraising at this point.

Yes

→Modi Naturals has secured substantial business visibility ahead of the next ethanol supply year (ESY).
→They have confirmed orders for 49,700 KL of ethanol along with by-product orders worth INR 400 crores from OMCs in the October 2025 cycle 1 tender.
→Additional orders are expected in subsequent tenders to fully utilize their expanded ethanol capacity.
→For the expanded capacity (310 KLPD), some orders are already secured for the first quarter, with plans to secure more in cycle 2 and cycle 3 tenders.
→The company remains confident of fulfilling capacity utilization through existing and upcoming tenders despite overall sector overcapacity concerns.

Yes

→Modi Naturals is currently undergoing a major capacity expansion in its ethanol division.
→The second phase of the 180 KLPD ethanol plant expansion is under trial and expected to start operations by December 2025.
→Upon completion, total ethanol capacity will increase to 310 KLPD.
→Future plans include raising capital if needed, though currently the company is fairly okay on the capital front.
→Management expects strong internal approvals over the next 12 to 18 months to manage borrowings and capital needs.
→The company is also looking at entering the ready-to-eat snacking segment with new products in the pipeline.
→The overall strategy includes continued investment in marketing and advertising to drive brand visibility and consumer engagement.

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