Gandhar Oil Refinery (India) Limited (NSE: GANDHAR) Q4 2025 Earnings Call dated May. 23, 2025
Corporate Participants:
Unidentified Speaker
Aslesh Parekh — Joint Managing Director
Indrajit Bhattachary — Chief Financial Officer
Analysts:
Viraj Mehta — Analyst
Unidentified Participant
Rajiv Roy
Kevin Mehta — Analyst
Presentation:
Operator
Ladies and gentlemen, you have joined the Gandhar Oil Refinery India Limited Conference Call. Please stay connected. The call will begin shortly. I repeat, you have joined the Gandhar Oil Refinery India Limited Conference Call. Please stay connected. The call will begin shortly ladies and gentlemen, good day and welcome to Q4 FY ’25 Earnings Conference Call of Kandar Oil Refinery India Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Viral Sanke Shah from MUFG in Time. Thank you, and over to you, sir.
Unidentified Speaker
Thank you. Thank you. Good afternoon, ladies and gentlemen. I welcome you to the Q4 and FY ’25 Earnings conference Call of Oils Refinery India Limited. To discuss the Q4 and FY ’25 business performance, we have from the management, Mr Aklesh, Joint Managing Director; and Mr, CFO. Before we proceed with this call, I would like to mention that some of the statements made in today’s call may be forward-looking in nature and may involve risks and uncertainties. For more details, kindly refer to the investor presentation and other findings that can be found on the company’s website and stock exchanges. Without further ado, I would like to hand over the call to the management for their opening remarks. And, and then we’ll open the floor for Q&A. Thank you, and over to you, sir.
Aslesh Parekh — Joint Managing Director
Thank you. Thank you very much. Good afternoon, everyone who is present on this conference call. I Ashlesh Parak, Joint Managing Director of Gander Oil Refinery India Limited. I’m joined by my CFO, Mr Indrajit. We appreciate your time and interest as we review our financial performance for the 4th-quarter and the full-year of FY ’25. Today, I will provide an overview of our business performance amidst a dynamic economic landscape. During the quarter-four ended FY ’25, we recorded a revenue of INR9,617 million. For the full-year ending FY ’25, our revenue stood at INR38,969 million. In volume terms, we saw a healthy increase of around 3% from FY ’24 to FY ’25, a clear sign of stable operational throughput. However, revenues from operations were affected primarily due to a reduction in average realization from INR82,824 per kil in FY ’24 to 76,223 per in FY ’25. The contraction was mainly driven by softening prices, reduced demand in FMCG and pharma segments and the broader impact of global geopolitical challenges that we have been facing. Our international business remains a cornerstone of our strategy.
Our overseas sales still contributed to around 40.2% of the total sales in the sales both in Q4 FY ’25 and for the full financial year. However, export revenue decreased from INR24,028 million in FY ’24 to INR15,656 million in FY ’25, largely due to shipping disruptions in the Red Sea and the ongoing conflicts such as the Russia-Ukraine war. Despite this, we successfully mitigated the impact by strengthening our domestic market presence, leading to a rise in the domestic sales. This shift in sales mix is part of a deliberate and agile approach to-market dynamics showing our ability to add-up quickly and to protect our overall top-line performance. On the operational front, our consolidated manufacturing volumes remained stable with while standalone manufacturing volume grew to 99,934 KL in-quarter four ended FY ’25. While pricing headwinds affected our top-line, we maintained a cost discipline with reduction in both finance cost and our employee cost in absolute and percentage terms, demonstrating our focus on efficiency.
There has been a slight increase in other expenses, mainly due to the higher shipping freight rates arising from the — from the global disruption. However, these are expected to stabilize in the coming quarters. And Gandhar oil, we are — we remain firmly committed and focused through our long-term growth strategy. Our focus continues to be in expanding our presence in the White oil segment, particularly in the PHPO, that is a personal care, Healthcare and the performance health segment where we are driving product diversification, geographic expansion and even deeper customer with position — positioning us for sustainable growth and amid an evolving macroscopic landscape. While shipment delays and freight cost escalations have presented near-term challenges, we have this as a very one-off and disruption.
We are confident in gradual improvement in the quarter side as the global gains are stabilizing. In terms of forward-looking developments, we are excited to share that your company has signed a non-binding agreement with the Port Authority, that is the GNPA for the proposed Vadwan Port project, a greenfield deep rough major port being developed in district of Maharashtra in collaboration with the Maharashtra Maritime. The port slated for the port, which is expected to be — have its completion by FY ’24 of 23 million tons per annum. Sorry to interrupt, sir, but your voice dropped in the middle after the port. Okay. The post landed to complete — is expected to be completed by FY 30 is designed to handle a significant cargo volume, including 23 million tons of containers per app. It will host multiple terminals, including container, liquid cargo and coastguard birth all the three. We intend to set-up a terminal for the storage of our base oil, chemicals and other liquids along with blending plant at the. The investment stands at around INR1,000 crores, subject to necessary — regulatory clearance and successful bidding outcome.
We believe this project has the potential to significantly enhance our logistics efficiency and strengthen our long-term supply-chain capability. With this, I hand over my call to Mr Indarjit, who is the CFO, who will take you through the financials in detail. Thank you once again. Over to you, Mr Pata Chari.
Indrajit Bhattachary — Chief Financial Officer
Thank you, by and everyone who has joined us on this call. I shall now take you through the financial performance of Gander Oil Refinery for the 4th-quarter and the full-year of FY ’24-’25. In Q4 ’25, our consolidated revenue stood at INR96 million compared to 10,392 million in Q4 ’24.
Operator
Sorry to interrupt, sir again, but your voice dropped. Okay. Ladies and gentlemen, we have lost the management line. Please stay connected while we rejoin the management We have — we have the management back online with us. Please proceed, sir.
Indrajit Bhattachary — Chief Financial Officer
Yeah. Sorry for the interruption. Carry-on for the full-year ending on FY ’25 consolidated revenue stood at INR38969 million. On a consolidated basis, EBITDA for Q4 FY ’25 stood at INR336 million for the full-year ended FY ’25, EBITDA totaled at INR1756 million. Consolidated profit-after-tax for the Q4 FY ’25 was INR123 million and for full-year ended ’25 stood at INR835 million. In a — on a consolidated basis, there has been marginal increase in inventories and debtors and a reduction in credities. The current ratio remains healthy. The debt-equity ratio stays at nominal levels. Thank you for all your attention. This concludes my summarization. And with that, we’ll open the floor for any questions that you may have.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone if you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Viraj Mehta from Enigma. Please go-ahead.
Viraj Mehta
Yeah, hi, sir. Sir, you said that — I mean, if I look at the presentation, there is a gross profit has actually increased this quarter. This is in-spite of our raw-material prices correcting, which would have led to inventory losses. So can you explain how did this happen or and what is the quantum of inventory losses we had in Q4 and what would be the inventory losses we are already having in Q1 till now?
Indrajit Bhattachary
As far as inventory losses are concerned, I would like to that we hardly carry any significant inventory. So the question of inventory losses practically is minimum. And yes, the gross margin, the gross margin did improve because it also had led to an improvement in the procurement basis and the procurement terms
Viraj Mehta
Okay. So this 1,130 kind of gross margins in your view, is it kind of sustainable
Aslesh Parekh
That the endeavor is to have a increased gross margin. So obviously, this is not a reflection of the gross funds that we would like to keep. Obviously, we would — I mean, internally we have a benchmark of what gross margins we are — we would like to achieve. Being a forward-looking statement, I would in-going in giving a forward-looking statement. But yes, you would like to say definitely improve the gross margin from where we are today in the quarter-four.
Viraj Mehta
All right. And sir, post our IPO, if I see — and again, I’m probably new to your company, sir, please pardon me if my question is not correct. But if I look at post-IPO from FY ’23, our sales have essentially remained constant or fallen a little bit because of decreasing realization, but our EBITDA from INR320 odd crores has fallen off the clip to INR175 crores. And in your view, once the gross margins are stabilized and you will not see any temporary issues like freight, what’s the sustainable gross margins you think you can do and EBITDA margin?
Aslesh Parekh
Yeah, sure. See, although the revenue has been constant or a slight increase or basis, but if you see the volume, if you compare it vis-a-vis or volume, we have shown a volume growth even in FY ended — in the current year — in the last year ended FY ’25. So there has been an increase in the volume basis. So that is would be a real indicator in terms of the performance of the company because revenue is a component of the raw materials that we use, which are subject to changes in the price because of the fluctuation. So there has been an increment in the volume terms, which we are — which we already highlighted during my speech going — and can you just repeat your second question.
Viraj Mehta
So EBITDA margins have significantly fallen since our IPO days. So as an outside investor, I don’t know what is the sustainable EBITDA margin because like are they — are they what you were doing earlier as in high-single-digits or are they — today 5%, 6% is a real reflection of our numbers. So I don’t know. So I’m asking.
Aslesh Parekh
See, as you are well aware, you know, there across-the-board, including all the chemicals, specialty chemical industries, there was COVID related incremental margins, which was there by all the companies, I mean, which was even reported by us. So obviously, we would ensure that we would like to — obviously, the endeavor is to have high-single-digit or double-digit of gross margins going-forward — EBITDA margin going-forward. That is the endeavor that where we like to benchmark ourselves against. And we are trying our level best by optimizing our cost, optimizing our optimizing our inventory, adding new products as well to achieve this gross margin.
Indrajit Bhattachary
Just to take that, we are in the process of getting into higher-value addition products, which will contribute to higher EBITDA.
Viraj Mehta
Thank you. Best of luck.
Aslesh Parekh
Thank you.
Operator
Thank you. The next question is from the line of Isha from IM Capital. Please go-ahead. Sir,
Unidentified Participant
As you mentioned that you target high EBITDA. So like considering the stabilization in the global supply-chain, you have also mentioned that. So what is your outlook in the financial year ’26?
Indrajit Bhattachary
So financial year ’26, on a volume basis, we are projecting an increase a increase — increment of about 10% to 12% and we anticipate that the realizations, which are currently are at INR76,000 per kL will also improve. Further, there is a big component of cost increase on account of the Red Sea issue. We are hopeful that should get — that should get stabilized. If that happens, the freight costs also will come down substantially. So yes, we are looking positive towards the next year.
Unidentified Participant
Okay. And my second question would be like, how do you expect your product mix to evolve in like financial year ’26, especially with PHPL currently contributing about 47.27 percentage?
Aslesh Parekh
See we have been trying to optimize our product mix by focusing on more value — margin value-added products, which are primarily in the PHPO segment. So our endeavor is to further increase — strengthen our PHPO revenues and also further increase our PHPO revenue from where we are today.
Unidentified Participant
Okay, okay. Thank you.
Operator
Thank you. The next question is from the line of Rajiv Roy from RR Investment. Please go-ahead.
Rajiv Roy
Hi, am I audible? Yeah, yeah. Yeah, sir, thank you for the opportunity. I have a couple of questions. Sir, first is, how are we managing our raw-material procurement and the pricing volatility, especially in lubricant and PIO segments? Second question is, sir, what is our current utilization rate across our — the manufacturing facilities? And do we see any foresee in capacity constraints?
Indrajit Bhattachary
Yes. Okay. Taking your last question first, no. No capacity constraints at all because we have enhanced capacity at our Taloja plant last year itself and we have not yet reached that peak capacity utilization of the Taloja plant. So capacity is not a problem. Raw-material, as you know, is mostly procured from refineries across the globe. And this is an index-based procurement and I mean, this entire pricing is index-based and even with the movement in the price of crude, it gives us enough time to anticipate that movement and work it out. So it’s a pretty tried and tested method, which has worked out for us.
Rajiv Roy
Okay. I have one more question. Sir, could you give — give me some color on any international markets which are driving our growth as of today, which are driving out?
Indrajit Bhattachary
Yeah.
Rajiv Roy
I mean — and which are helping us in driving the growth
Aslesh Parekh
See, is exporting its product to 100 plus countries across the globe, you know. The exports are almost evenly spread-out across the various regions, including Asia-Pacific including in the Americas, including the Africa. But if you look at the evenness, the majority of the sales actually coming in from Africa and South America . But we are trying to still strengthen our existing PHPU base of customers, including our multinational customers like Unilever or Procter; Yamble and our local multinationals, where we are like — we are adding new products and we are growing in terms of volume with the existing customers.
Rajiv Roy
Okay, sir. Okay, sir. Thank you for asking — sorry, thank you for answering the question. This is — that’s it from my side. Thank you so much.
Operator
Thank you. The next question is from the line of Ankita Agarwal from Securities. Please go-ahead.
Unidentified Participant
Hello. Yeah. Am I audible, sir? Yeah, you’re audible. So my question is regarding CSPO segment, which continues to lead the revenue. So are there any plans to expand the capacity or launch new products in this segment?
Aslesh Parekh
So see, we had undertaken a capacity expansion, which is — which has just come to stream from I think late last year or early this year. So obviously, there is no current requirement of capacity enhancement to be, but we are — enough — we are covered for this next couple of years for the capex in — as far as the capacity is goes. But in case if we are able to sell our products quickly and if there’d be a need of doing a capacity expansion, we have enough strength in our balance sheet to take care of the future capacity expansion. Coming to your second question in terms of the PHPO, we are working on the product lines. We are trying to add new products as well. We will soon come back to you with what all products we are adding in the near-future, which will further strengthen our margins? It’s a little bit too early for me to discuss on what products you know be coming up with?
Unidentified Participant
Okay. Okay, sir. Thank you. And also what factor contributed to this strong 19% year-on-year growth in standalone manufacturing volume,
Aslesh Parekh
Right. As informed in the call, we had a drop-in the export volume. So we — our sales team was capable enough in terms of distributing the product to the domestic customers. So obviously, there has been incremental customers — new customers which has been added across the various categories. Plus we have — we had — because of the global disruption in exports, the team was versatile enough to focus on the domestic sales.
Unidentified Participant
Okay, sir. Thank you. You. Thank you so much for answering.
Operator
Thank you. The next question is from the line of Kevin Mehta from Star Investment. Please go-ahead.
Kevin Mehta
Hello. Am I audible, sir?
Indrajit Bhattachary
Yeah, yeah.
Kevin Mehta
Yeah. Thank you for the opportunity. So sir, I have two broadly questions. So first is, can you elaborate on the strategic rationale or expected benefits of INR1,000 crore MOU with JNPA PA for the port project.
Aslesh Parekh
See, currently, there is the — there has just been a non-binding MOU which has been signed, okay. Subject to you know, we getting — we avoiding the tender being awarded in the bidding. Obviously, we’ll be setting up a state-of-art of state-of-art blending facility and also tank storage terminal over there. It is too early for me to tell you in terms of what could be the because the project itself is getting started by end of 2030. It’s too early for us to give you a ballmark amount of savings that we may have or the sales that we need from also. Yeah.
Kevin Mehta
Got it, sir. So any sort of planning regarding the funding sources you are considering for this investment.
Aslesh Parekh
We — obviously, it would be a combination of — it would be a combination.
Indrajit Bhattachary
We’ve kept our options open over there, okay. So obviously, we will be the major equity partner in that. We are also open — we will also have available term-loan facilities available for this. And if required, we could also have a set-up an SBB with some other partner to get-in strategic and financial help in that matter.
Aslesh Parekh
And just to add one more line, even if you see today, we don’t have any long-term debt. Long-term debt is zero. So obviously, we have enough trend in the balance sheet as we are able to take care of even this specific new project as well.
Kevin Mehta
Okay, got it. That was really helpful. And sir, can you help me with the — any sort of revenue guidance or key volume growth in coming years like FY ’26 and beyond?
Aslesh Parekh
See, obviously, as Mr highlighted, the endeavor is to grow in double-digit in terms of volume for FY ’26 as well. And we would like to, you know, keep this as a benchmark not only in top-line, but even in bottom-line.
Kevin Mehta
Okay. Okay, sir. That answers my question. Thank you so much.
Operator
Thank you. The next question is from the line of Mok from Aurum Capital. Please go-ahead. Please go-ahead.
Unidentified Participant
Hello. I would like to know, currently we have as a result. What is the feedback which we are anticipating?
Indrajit Bhattachary
Sorry, sorry, we lost you in-between. Can you speak a bit? Can you speak a better? Can you speak a little bit?
Unidentified Participant
Hello, is this better now?
Indrajit Bhattachary
Much better.
Unidentified Participant
Yeah. So we currently have around INR300 cR of debt. So what — could you give some color on debt reduction plan or is this the peak debt?
Indrajit Bhattachary
No, no, no, no. So this is most of the debt that you see over here, there is no debt on the standalone level. Most of the debt that you see over here is on account of a subsidiary at Shahja it is expected to reduce as we go-ahead because the utilization, the churning will be quicker. So I don’t see us having debt beyond this. If not — if it could be incremental slightly, otherwise this is the peak debt.
Unidentified Participant
Okay. And what is the current capacity utilization? Yes?
Indrajit Bhattachary
So in the Indian plant, the capacity utilization would be around that 87%, 85%, 86% and on account of the recently installed capacity at the Indian plants. At the Shahja plant, the capacity is around 60% 65%.
Unidentified Participant
Okay. And when would we look at CapEx at what capacity utilization are we — we would look at capex,
Indrajit Bhattachary
If see like just explained right now. We have in — and we have installed capacity right now which is spare. See what capacity we build-up at the end of last year, last year was ’24, okay, that all that will come, it will take us two, three years to catch-up to that capacity. So I — we don’t see any capacity enhancement required in the next two to three years. After that, we see the capex.
Unidentified Participant
Okay. And could you give last question, could you give some color on we are getting into some value-added projects. So generally how like our current comparing to our current gross margins, these value-added products, how gross margin improvement we can see in the —
Indrajit Bhattachary
So these value-added products are mostly in PHPA — PHPO and lubricants. And these — if and when they do happen, this will generate additional gross margin by — we expect the gross margin to go up about 4% to 5%.
Unidentified Participant
Okay. Okay. That’s it from me now. Thank you.
Operator
Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Aditya from Securities Investment Management. Please go-ahead.
Unidentified Participant
Hi, sir. Thanks for the opportunity. Sir, firstly, did we have any forex process in the second-half?
Indrajit Bhattachary
Forex possible.
Unidentified Participant
Possible. Understood. And sir, now freight costs, we mentioned that it has increased because of RC prices. But sir, from what I understand, this issue was in the first-half of FY ’25, post that the freight costs have reduced. So why has it still affected us in Q4?
Indrajit Bhattachary
No, no. The vessels are still not going through the Red Sea. The vessels are still going down all the way down to Purdor to go across. So that is why the freight — freight cost still remains the same. We had expected with the coming of the recent US President that this issue will probably be even out, but it has still not happened and rest still remains an issue.
Unidentified Participant
Understood. And sir, what would be the real differential between going from that two routes? Sorry coming in? Differential between the two routes.
Aslesh Parekh
See, obviously, I mean the differential is the difference. I mean the incremental freight that we had we had incurred, you know.
Indrajit Bhattachary
So just to give you an indicator, we have additional freight costs during this year of close to INR13 crores, which was not there last year.
Aslesh Parekh
But as you rightly said, the freight rates are — have started softening as we see from end March, early-April. So obviously, we — I think we’ll not have this additional freight cost in the quarter coming forward?
Unidentified Participant
Okay. Takes sense. Thanks for answering your questions.
Operator
Thank you. The next question is from the line of Patel from Patel Investments. Please go-ahead.
Unidentified Participant
Thank you for the opportunity and thanks a lot, as well as Abhijit for setting up this call and giving us the opportunity to interact. I hope you will continue this practice. My question is around — you did answer in terms of capex plan that worked out for both Telejail as well as Silvasa and how the margin would expand around it. But is there any impact because of the tariff war that we had — that we are having with US because I do remember we did close-out the US-FDA observations and we were hoping to have some more higher-margin products, especially for US that is number-one. And the second is, why do we diversify into building that Vadwal port terminal rather than growing inorganically, I mean, in terms of buying a smaller companies in our core domain itself. I mean those are the two strategic questions from my side.
Aslesh Parekh
See, as far as you are correct, we got an USFD approval in the month of October last year. The idea was to expand our PHPO portfolio, which we are focused on and which we are doing by adding new products. We have started getting orders from customers after this US-FDA approvals, the volumes have increased. There has been you know there has been traction from the customers as well since the plant is now FDA approved. Coming back to your second question on the tariff war, you know, currently the product that we are exporting, there is no such new tariff being — as of now, while we speak, there is no mean been no such tariff tariffs being added on the product that we are currently exporting. So we are hopeful enough that Trump would not be adding tariff to this kind of product. Now coming to your second — coming to your second question on diversification into, see, majority of our business, if you look at the total net about Gander is into imports and exports. So there would be no substantial amount of saving in case we have a facility in the port, which would help in optimization of our transportation cost, optimization of the resources being required and in terms also help us in achieving the sustainability factor.
Indrajit Bhattachary
So this is more or less a lateral integration in our — on our part because storage is a very important part in our business and this gives us additional storage cost and also this gives us additional storage facility, reducing the storage requirement and also gives us opportunity to lease the additional storage facility that will generate and generate income out of that. So it’s not exactly absolute different field that we’re getting into.
Unidentified Participant
Sure, understood. Thank you. And any — I mean, again, at the right time, but I hope with our strong balance sheet, you’re also looking at inorganic growth as well as because organic growth you’re talking about center of high-teens or double-digits, lower double-digit teens, but basically having organic growth will be far better.
Aslesh Parekh
We are open for inorganic growth as well. So obviously, the team is looking for the right ticket and right-size of the transaction to happen. So we will — we are in our eyes open.
Unidentified Participant
Perfect. Thank you very much and all the very best. Very, very hopeful. Continue up great efforts. Thank you.
Aslesh Parekh
Thank you. Thank you so much.
Operator
Thank you. Ladies and gentlemen, we will take that as our last question. I would now like to hand the conference over to Mr Viral Satlecha from In Time for closing comments.
Unidentified Speaker
Thank you. I would like to thank management for taking this time-out for this conference call today and thanks to all the participants. If you have any queries, please feel free-to contact us. We are India Private Limited, Investor Relation Advisors to Oy Refinery India Limited. Thank you so much.
Indrajit Bhattachary
Thank you. Thank you.
Operator
Thank you. On behalf of Oil Refinery India Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines