India Glycols Ltd (NSE: INDIAGLYCO) Q4 2025 Earnings Call dated May. 21, 2025
Corporate Participants:
Unidentified Speaker
Ranveer Singh — Associate Director
Rupark Sarswat — Chief Executive Officer
Anand Singhal — Chief Financial Officer
Raju Vaziraney — Adv PRESIDENT -IMFL
S. K. Shukla — Head – Liquor Business
Manish Pant — Sr. Vice President and Group Head (MIS)
Analysts:
Unidentified Participant
Rohit Nagraj — Analyst
NEIL BAHAL — Analyst
Saket Kapoor — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome TO India Glycols Limited Q4NFY 25 Earnings Conference Call hosted by Nirvama Wealth Management and Investment 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 the conference call, please signal an operator by pressing Stars and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anveer Singh. Thank you. And over to you sir.
Ranveer Singh — Associate Director
Thank you. Good evening everybody. Thank you for joining us on India Glycol Limited Q4, FY25 and full year FY25 result conference call. So I would like to thank the management for giving us this opportunity to host the call and congratulate them for a good set of numbers. We are joined on this call with India Glycol’s management represented by Mr. Rupak Saraswat CEO Mr. Anand Singhal, CFO Mr. Rajesh Marwa Head Sales and Marketing, BSPC segment, Mr. S.K. sukla which Head Liquor Business and Mr. Ankur Jain who is head legal and company secretary. I would like to invite Mr.
Rupak Sarasw to initiate this proceeding with his opening remarks post which we will have a Q and A session. Thank you. And over to you sir.
Rupark Sarswat — Chief Executive Officer
Yeah. A very good afternoon to all of you and thank you for joining us on this investor call once again. So I will take this opportunity to give you an overview of the quarterly as well as yearly performance. This is also the call after the financial year end. So it will be a good time to kind of do a high level catch up on that as well. We will talk a little bit about aspects of the business. Issues, opportunities, broad actions that we are taking and I am sure you had a look at the results and then we can take your questions.
Am I audible to everybody? Can you just confirm?
operator
Yes sir, it’s audible. You may go ahead.
Rupark Sarswat — Chief Executive Officer
Thank you. Just give me a second. So looking at, I will first talk about the performance for the quarter briefly then touch upon the performance for the year. We’ll talk about financials and we will have some commentary on various segments as well. So when we look at Q4.25 compared to Q4.24 we had a net revenue of 863 crores in Q4 FY2025 versus 926 crores in Q4 FY24. Overall there has been strong growth in biofuels which increased by 48% to 273 crores. Portable spirits is up by 14.8% year on year to 284 crores and the chemicals business for bio based specialty chemicals is at 250crores 54crores.
From an EBITDA perspective it has been a very good quarter with 35.1% increase at 148% crores from 109 crores. It has also been a very healthy EBITDA margin as you can see at 17.1% against 11.7% in Q4 of last year. So it is a surge of 532 basis points. So our margins have been good. The EBIT margins have improved from 16.2 for portable spirits the EBIT margins have improved from 16.2 to 27% and there has been a marginal increase in the BSPC EBIT margins as well which has expanded by 368 basis points to 11.4% for the quarter.
PAAS for the quarter stood at 64 crores which is up 51.7% with PAT margins of 7.4% against 4.5% last year which is up by 287 basis points. And at a gross revenue level we have grown from 2039 to 2189 crore which is up 7%. And I had already mentioned net revenue and part margins as well. So at a gross revenue level we reported a decent growth of 7% while the net revenue for the quarter reported a margin decline. As I mentioned biofuels saw very strong growth with BSPC and NHA BioPharma segments reported softer quarter in terms of the top line and when we look at the full year performance, net revenue increased by 14.4% for the full year 25 to 3768 crores.
Particularly portable spirits is up 22.8% year on year to to 1163 crores. So which includes our country liquor business as well as our IMFL business, our biofuels business has really stood top line growth which is up 103% to 1044 crores. And from a top line perspective nnature biopharma also grew by approximately 7%. So while at an overall level you know BSPC stood at 748, 42 crores. But we have seen that some of our core focus segments within chemicals have done well in terms of growth and particularly in terms of when we look at internally in terms of margins as well, our EBITDA for the year increased by 22.8 crores to 525 crores.
EBITDA margin expanded by 100 basis points to 13.9% and EBITDA margin percentage has improved. Portable spirits, biofuels as well as chemicals in nature Biopharma has had price pressures which has resulted in suppression on margins as well. So if you see our EBIT and EBITDA margins both improved by 100 basis points to 10.8% and 12.9% respectively. For portable spirits, the EBIT margins improved by 471 basis points to 32%. For the chemicals business, which is BSPC, EBIT margins improved by 91 basis points to 9.3%. And for the biofuels business, our EBIT margins have been 5.4%. So we’ve had a very good fat performance for the year which is at 231 crores, up 33.5%.
And before I jump into the segment and other highlights, maybe I can talk about other highlights and then Anuji can take you through the financials. In terms of the year, we’ve also reported a good year from the joint venture where several things have been better. So net revenue has grown by 13%. EBITDA is up 70% compared to the price previous year. I’m sure we’ve had these discussions many times in our previous calls. We talked about two prime drivers to improve profitability in the joint venture. One of them of course is the cost of the key raw material which has increased for IGL as well as the joint venture which is ethylene oxide, which has been much better controlled than before.
So that has been one factor. The other factor of course has been as the joint venture has been functioning for a couple of years, there has been increased involvement of Clarity International business. So there has been increased indigenous manufacture of product as well as improvement of product mix. So these two factors primarily have led to a sharp recovery in the performance of the joint venture. Another green shoot that we keep talking about is the new specialties business which we have been focusing on to develop businesses which are much more value added, which are based on partnerships which are in some ways derisking the business from commodity prices and also costs of ethanol and ethnoxide.
So there though it is a smaller business still to start with. But I’m happy to report that we’ve done very good progress in terms of developing products. We’ve developed a portfolio of products, each one of them with the potential to grow in several areas. And we are working with good international partners and that will help us drive the business forward in the years to come. As you already heard, we’ve had very strong growth in Country Liquor and imfl. Of the two segments, Country Liquor is as of now largest for us. So there is of course we’ve tried to retain our market share, improve our product portfolio, improve our margins, decrease our costs in Kashmir which has led to a strong performance in another growth engine in the portable spirit segment for us of course is IMFL where our focus has been moving up the ladder in terms of dignamization.
You know that we have had a partnership with Dumrus which has allowed us to introduce several brands and we are seeing good traction. And we have also looked at expanding in new areas which is paramilitary. Now we are working on CSC as well as selectively new geographies. And we hear more about this later. And our biofuel business continues to do well. It has been in line with what we spoke about over the last few years in terms of how the business would grow, what the dynamics of the business are. And if you look at the track record over the last three years it has by and large gone.
By and large gone as the plan. Of course, like any other business it has had its ups and downs and we margins going up and margins going down. But we’ve always been positive and the capacities that we’ve added to support this business have been well utilized. Are being well utilized. We will talk a little bit about this subsequently when I talk about the business segment. But before that let me hand over to my colleague Mr. Anand Singhal to take you through a summary of financials. Good afternoon.
Anand Singhal — Chief Financial Officer
I will take the yearly performance first. So the gross revenue for this year is 9037 crore or 38 crore. Visa vis 7918 crore in the last year which is up by 14%. The net sales in the current year is 3767 crores. Visa vis 3291 crores again up by 14%. The EBITDA in the current year is 521 crores. This is on a standalone basis. Visa based 423 crores in the last year up by 23% and PAT is 180 crore. Visa based 151 crore in the last year up by 19%. So overall growth and overall good performance in all the fields by the company.
In respect of the Q4 performance, the Q4 performance, the gross revenue is 2188 crore. If I compare this with the corresponding quarter of last year, so it is up by. It is sorry down by 10%. The EBITDA in the current quarter is 145 crore. Visa which is 109 crore. In the corresponding quarter quarter last year which Is up by 12%. The net sales is 862 crores. Visa vis 923 crore in the last quarter which is down by 12%. The PAT is 50.36 crore. Visa was 37.74 crores in the last corresponding quarter Last year more or less on consolidated basis the income or the share of the net profit from the joint venture in the current year is 46.4 crores.
Visa is 16.66 crore which is almost, I will say what three times. So the JV has performed very good and rest of the data is more or less same. So overall the company has shown a very good results. And in the board of directors meeting on 16th, the board of directors has recommended dividend of 10 rupees per share with the approval of the shareholders. So this is the brief and later on we’ll take the questions.
Rupark Sarswat — Chief Executive Officer
So let me give you a quick update on various segments. So starting with bio based specialties and performance chemicals. So for the quarter, so net revenue for the quarter Milestone is down 17.6%. EBIT is lower by 8.7% and our margin however in terms of percentage ebit margin is up 91 basis points to 9.3%. Now part of it is also to do with the lower top line in terms of some of the businesses that we did not DO, traded businesses etc. So the revenue at 1342 crores and EBITDA at 125 crores in the quarter chemical sales were down and they were.
It was a relatively shorter month for glycols and glycoliter and glycol ether acetate. However, I can say that certain businesses that we call our focus businesses, our four chemical businesses which are of course part of the businesses unlike others, have done reasonably well. So if I look at a combine of glycolithors, glycols, new specialities, gases, this for the 12 month has actually shown an increase of 6%. And while we do not get into, you know, report those details, but at a gross margin level internally we’ve seen a healthy growth of 30 plus percent in this segment.
So overall numbers do tell us that chemicals have been somewhat stagnant. But I think in terms of some of the interesting businesses, the segment has been doing quite well and we expect that those trends will continue. The other segment which has been of interest, of course is the biofuel segment where we’ve seen a very, very good growth in terms of top line, which is up 103% at 1044 crores and our EBITDA at 57 crores is actually up 83.7%. So we saw that there’s been excellent growth in biofuels. The capacity that we’ve added have served our purpose to drive growth in this area.
And I think what has been good is that if you look at from 2014 to 2024, the iNow blending program has actually, you know, done quite well. Let me give you a bit of an update on that. So if you look at the isanol blending program in the country, I think it is good to get that perspective because it gives you hopefully some confidence in terms of how we have thought about the strategy for this business, how it has panned out and hopefully how it will continue to be an area of interest and growth for IPL in the years to come.
So in 201920 government of India had a target of 5% blending and it met 5% blending. And this continued in 2024. There was a target of 15% blending and we met 14.6% blending target. In 2526 the target is 20% blending and I think the expectation is that this 20% blending target will be met. Now it is also interesting to note that earlier, as per the policy and statement made by the government, this was a plan which was targeted for 2030. However it was brought forward and I think it is very commendable from a nation’s point of view that a plan which was brought forward from 2030 to 2025 was met again in 2025.
So that’s very interesting. We also keep track of overall capacities in terms of it’s now that have been put up. Broadly, of course, I don’t have exact figures for all capacities. So I may tell you that by and large the demand and capacities have more or less been aligned. My indications are that there may be a very small surplus in capacity, which is a healthy thing, so that the demand continues to be met because the demand is expected to grow. Even if the blending continues at 20%, you would imagine that demand will continue to grow.
And it also gives us the signal that at the same Time there is no huge surplus capacity which may present a risk to the business in the years to come. And as far as I understand, you know, at one point in time India used to produce ES ethanol primarily from molasses or almost entirely from molasses. Still the government came up with a grain program a few years ago essentially based on damaged food, grain, FCI rice and subsequently also moving into corn. Right now compared to say approximately about 1150 crore litres, 750 actually comes from grain which is a much bigger contributor now.
And I think in line with this macro trend we also invested as you know, in grain based capacities. And that has been a good decision from the business as you would kind of agree with me now. So there are various things happening on this front including focus on possibly second generation external subsequently which is as of Pradhan, Mantri, Jeevan, Yojana and the country is also looking at potentially blending much more. It’s now going up from 25% to 30% maybe by 2030. But I think there’s a task force which is looking at that. There are no specific announcements which have happened but I think this is a direction which the country would be taking potentially also moving into flex fuel for senior vehicles and that will be an interesting growth opportunity for us in the years to come.
And then let me talk to you about briefly about Portable Spirit and then I will, okay, let me cover nnature Biopharma first and then we’ll go to Portable Spirit so that Rajujit can then add on and we can take that as a segment. So NH Biopharma for us in terms of top line has grown by about 7%. And there are two major projects of products of course for us apart from others. One is the thiocolgicoside broadly and nicotine. So while we have been able to push volumes and grow these areas, I think in general there has been significant pricing pressure partly because there is softer demand in the international market and also because there is increased competition.
But then in any new business these are the practicalities, we have a strategy. I think broadly our strategy is to focus on value added businesses, to look at branded products, look at collaborations, to look at various certifications and so on. So that as far as the NHL biopharma business is concerned, as far as the portable spirit business is concerned, I have already given you the top line comments for Country Liquor as well as portable spirits and broadly how we are doing, what we are focusing on. But in order to give you a little more flavor on what’s happening in this Space.
Let me request Rajuji to comment.
Raju Vaziraney — Adv PRESIDENT -IMFL
Okay, thank you Rupakji. I’m Raju Guzirani speaking. See there is increased focus on IMFL in particular because country liquor has been our traditional business and has been our base, if I may say that. But it is important that in keeping with the aspirations of the consumers and the need gap as we say in marketing, there is definite growth in the premiumization of the sector. And you know, liquor sector is galloping, if I may use that word and very, very bullish. Because you see in India, India is the biggest whiskey market in the world. The consumer is young. Every year Australia is being added into the consumer class.
These all demographic dividends as you know are applicable in our country. And the consumer is young and trendy and wants to try new products at higher price point. So in keeping with this insight, consumer insight, the board and the management decided that we should get into premiumization. But there is a challenge in premiumization in whiskey in particular because the two giants, if I may use the word porno and Diageo are fighting for market share. And it’s like Pepsi and Coke. With the result it is very difficult for any other Indian company to make its presence felt.
So we thought what we will do is we will get into inorganic growth. After our initial success of amazing vodka, amazing whiskey and also Zumba Limon which is a challenger brand to the leader brand, we were thinking that why not complement our organic growth in organic growth. And we were able to sign up as our CEO said, partnership with AMRUT from the 1st of April 2024. And by the time the stocks came in and the stocks saw the light of the day, it was about July or August. Just for the benefit of everyone. The understanding is in order to harness the quality excellence of Amrood we have ensured that the entire liquid comes from Amrud Bangalore which is their headquarters.
And we only add extra neutral alcohol which is our own and make a world class quality brand like Amrut does all over the world. So you know we have the best of both the worlds. Our extra neutral alcohol which is, which is very known. Bacardi International, our partners, we co pack for them more than 200,000 cases per month. Uses all of our Ena. So our good quality Ena as well as the malt used of Amrud makes it a very good combination. And the initial reports are very encouraging. As our CEO rightly said, we have got two brands.
One is Amruth McIntosh which is a 35 year old brand of Amrut distilleries. Now what we have done is we. Are making it, we are selling it. We are putting our working capital, everything we are doing, we are giving them a certain fixed royalty which is, you know, the more we sell, the more volume we get. We are able to give only per case loyalty in addition to the of course the liquid cost. In other words we are able to, it’s like our brand extension. So you know we are, we will be investing in these brands from long term point of view because our understanding is long term. And now there is a third brand available in the market that is Amrut IGL Amrut in addition to the two diets which so we have an inherent advantage because the stamp of Amrut and they allowed us to use Amrut’s name on the brands.
The second brand is what we have done cleverly is we have made another brand, Amrut White Label. So there are two price points which we are addressing because in the market there are two price points in Blender’s Pride Reserve and Blender’s Pride Regular or Rockford Reserve and Rockford Regular. To give you a perspective, 1000 rupees is the higher one and the Lower 1 is 850. What we have done by positioning our brands smartly, if I may use the word is having a price premiumness and put our Amrut McIntosh Black Label at 1100 instead of thousands of competition.
Price premiumness is what talks about. The consumer wants to try all the time, higher price products being very aspirational. So these two. It is still early days but we have made a good inroads into our mother mother in our mother mother states of up, Uttarakhand and also Delhi. And now we are expanding into Haryana and other government controlled markets. The second big achievement is our paramilitary, if I may use the word paramilitary is basf, CRPF and itbp. Earlier it used to be fragmented and small, small tenders would come but a couple of years back now it is called cpc.
They do one tender all over the country. So if your brand is approved, it is approved for two years and you get orders all over the country. See this gives us a platform to sell our brand all over the country from our Kashipur unit. And I take lot of satisfaction in mentioning that we are among the top three brands, top three companies selling to the paramilitary forces. The business is very stable, the duties all paid by the paramilitary forces. We only have to pick up the cost of the COG and it is very handsome price as far as pricing is concerned.
The third is the CSD Canteen stores department as we call it. I again take satisfaction in mentioning that after a gap of over two years CSV has introduced new brands and two of our brands, we applied for two brands. Both the brands have been approved by the board of. By the preliminary screening committee which consists of the board members and the chairman. And our soulmate Whiskey which is our traditional brand which is a millionaire case brand has been approved. And also our Zumbal Limon which is high priced opposite Bacardi Internationals Bacardi Le Mans also has been approved.
This CSD business is very stable business. It is lifetime registration duties are all paid by the government and we have to just pick up the cost of the product and we get All India reach. So once you get all India footprint then in CSD and paramilitary it gives very good foothold to us from long term point of view. Because there is a common saying that if an army officer endorses a brand he or she understands good quality drinking. So if paramilitary and military approves our brand and it goes all over the country, it has a definite rub off effect into the civil trade.
So we are going stepwise but definitely we are making our presence felt. Just to conclude, our direction is very clear. We will not open new states till we. Whatever state we enter, we want to be among the top three. Then only we go to the next state. Because the success story of one state will give us, you know, snowballing effect in the other state and in the other other state to a third state. And as our CEO rightly said there will be at least three more states we will be adding this year after the initial success in North.
So we are on the right track. It is very. It is. Brand building is a difficult and expensive proposition. But we are lucky we got Amrud so we don’t have to sell it. China celebrity costing us a bomb or going through the motions. And the fertility rate of our brands in IMFL brands in our country is so high. So we are able to ensure that with Amrut name on the label and IGL making the brand, the success is almost guaranteed. So our track is right and money is not. The resources are not the limiting factor.
I’m very confident that in the years to come, particularly in the current year, we will be marching forward. And the multiple of IMFL is known to all of you. It will definitely give us very good results. Thank you.
Rupark Sarswat — Chief Executive Officer
Thank you. Rajiv. I must also request just for a couple of minutes at least. Shuklaji, are you here on the line?
S. K. Shukla — Head – Liquor Business
Yes, I am here.
Rupark Sarswat — Chief Executive Officer
I think. Can you please give a quick update on country liquor that’s also an important part of the portable business.
S. K. Shukla — Head – Liquor Business
Thank you. Thank you. Good afternoon. My name is Jaska Shukla. So country liquor business is very important for India Glycols. And not for only the India Glycol but also for the state government. Because more than 60% revenue collects state from the branded Cantilika cell. So branded cantilika sale in which the Ideal’s contributions in last two years become more recorded. First we have the very prestigious brand name is Bunty Bubbly. This brand last two years continuously getting the highest India’s selling Kantilikar brand. And we have awarded twicely from the India book of record if we talk about the market share.
So we have the around business in the basically up which contributing around 55,000 crore to the state. The country liquor business is approximately in this year one crore cases in a month which is the four times more than the foreign liquor business. So I am growing year by year around 11%. Last year if you compare to 52324 visa vis 2425 the total growth in the country liquor business in the state of UP is reported 11% out of 11% India glycol business growth is 17%. Whatever the industries increase as compared to 2324 via 24259 lakh cases out of 9 lakh cases.
Our business share is 35%. So we secure 3 lakh cases growth year by year which is the whole the industry margin is 17%. So you can say this is the. We are maintaining our leadership position since last three years in the country liquor segment. So we have the world class facilities, production facilities. That’s why we exact capacity. We can produce 40 lakh pack per day in one roof. This is the capacity of India Glycols. We have the high speed machines. So that’s why we are able to dispatch and produce around 1 lakh cases in a day.
So this is all about from the clinical side this year the target we are expecting growth of the industries around 10 to 12%. And this year probably we are targeting more than that. So as far as country leader business is concerned Ideal leadership is maintained. And we hope that next year same will be maintained. Thank you. From my side.
Rupark Sarswat — Chief Executive Officer
Thank you. A very good summary. I think very good to see that while industry is growing at 11% which is very good. Ideal has grown at 7% and 35% of the growth which came in the industry actually came from ideal. We’ve also had a similarly very strong business in Utrakhand which is smaller. But we are the dominant Player in Uttarakhand as well. Interestingly, Country Liquor in terms of its quality has been improved both by efforts by the government in terms of making it higher quality as well as by the players. So it’s a completely different business from what it used to be 15, 20 years ago.
And that is one of the reasons why there is increasing expansion in this space. Not only in terms of the same state of people drinking, but also some of the people in some of the higher income groups, relatively higher income groups, not higher income groups, also shifting to some of these good brands. So that’s today we had a slightly longish update but I’m sure even then you would have found it useful because it helps you to get it in a much more comprehensive manner. I’m sure you’ll have questions. We’ll be happy to take them.
operator
Shall we start the Q and A, sir?
Rupark Sarswat — Chief Executive Officer
Yes, Yes. I hope we’ve not made everybody understand everything and people have no questions. On a lighter note,
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 char and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press char and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Rohit Nagaraj from BNK Securities. Please go ahead.
Rohit Nagraj
Yeah, thanks for the opportunity and congrats on good set of numbers for FY25 and an elaborate summary of the businesses. So first question is on the in nature Pharma, given that the market is well supplied, as you said in your commentary, is it that structurally the margin profile will now be changed and lower than what it used to be historically. Thank you.
Rupark Sarswat
Yeah, Rohit, that’s. You know, I recognize where you are coming from and I would like to imagine that there is a market which is in transition and there’s an organization which is in transition. So our effort, of course it is difficult to give a prediction is that we will continue to move up the value chain and we have concrete efforts in that direction that we have been doing in terms of doing several things. For example, we received the establishment inspection report with no observations from us FDA for nutraceutical products at Adheiradun plant. And both are Maxituma, Xanthuk, Denso Green are now clean label verified projects reinforcing our commitment to enhance product safety and quality in global market.
So broadly, two or three things. One is we are looking at the broader range of products. We are looking at branded products. There is a time frame it takes to work with global partners to get your product approved. There is a high focus on demonstrating differentiation both in terms of product performance as well as quality standards and certifications. We believe that these kind of challenges in businesses, a pressure to commoditize as we enter the business are expected to come especially when you grow. But we have a clear plan to look at moving in terms of higher value spaces.
There is enough space in the world for this in terms of nutraceutical supplement that you imagine apart from this, the chemical API. The world is looking more and more at natural alternatives for health, not only as nutritional supplements, but also as APIs to heal diseases. So that is the broader macro trend. That is not only a global macro trend, but that’s also increasingly an India domestic macro trend. However, in this space, as in every case, people, more and more people will try and get into and you know, obviously it will become a game of differentiation, collaboration and demonstrating quality and product efficacy.
So we have enough plans there. So I would not say that this is the norm for future and that’s the new normal. I think that is the. Those are the dynamics of the business. We entered this business, we are moving up that business. The business is there to stay. The business has the fundamentals to help it grow. And that is how I would like to state that. Manish, you are more involved in the business and let me know what to add to that.
Manish Pant
I fully agree with you.
Rupark Sarswat
Does that answer your question a little bit?
Rohit Nagraj
Yes. Yes. Second question is on the JV front. So we have done extremely well during the year. But again in the recent past the crude prices have slipped back to 60 odd dollars and probably the now the your dynamics is more favorable towards the base. So how do we foresee this particular to pan out in the next possible future? We will still have some challenges in terms of the performance or is it that in terms of the product slate, in terms of the efficiencies, at least part of that can be taken care of in the form of better utilization rates or efficiencies.
Thank you.
Rupark Sarswat
So Rohit, you know, let me answer this question. We had a positive and a thriving JV which was absolutely newly formed when the difference between idea zero price or you know, which is what goes to the JV and Reliance’s yield price in the market was in excess of 40%. Even then our fledgling new JV was if not galloping, thriving and surviving and growing. Now that difference has come down and has been hovering in the range of around 17 to 18 to 19% broadly I don’t remember the exact numbers as of today, so that is one factor.
We don’t see it going back to the levels of 42 at least. I don’t see it because I am sure you were there definitely when we spoke about our imported ethanol costs going up from something like 35 rupees a litre landed to in excess of 65 rupees a litre in terms of spot. Subsequent to that we have taken several actions, I have spoken about it before. We have taken actions to invest in grain based capacities and we’ve also looked at specializing, diversifying, etc. Another thing that has happened over the last three or four years also is that if crude goes down it also has a downward pressure on external prices.
I’ll tell you why and you will probably understand that, but let me restate that. One of the things that happened over the last five plus years or about around that time is external prices because of it being a fuel for blending in petrol has got coupled to crude. So once crude starts to go down there is of course just from a viability perspective, the pull to blend ethanol comes down as well globally. And we’ve. Seen this in France and Brazil earlier, if crude goes up, people start to blend more ethanol and that tends to put ethanol prices up. So there are things on both sides. In nutshell, this kind of green transition challenges are going to be there. I don’t see it going back to the severe gap levels that we were seeing more than a couple of years ago. One second thing we’ve done, we’ve taken actions to at least mitigate these risks to some extent. Thirdly, there has been a coupling of food and ethanol and one of the reasons ethanol prices go up is when food goes up, if crude comes down, there is a downward effect as well.
And thirdly, the JV also is much more established. It’s working on establishing products and putting them into the global market. I think that is being done better. It’s greater focus on indigenization and improve product mix. So whilst you raise a valid point, I think there are factors on both sides and I don’t see that shifting that drastically to start to be a big concern for the jv. These pressures will remain but there are other things which I spoke to you as well.
Rohit Nagraj
Thanks for the detail on answer sir. Thank you so much and all the best. Thank you.
Rupark Sarswat
Thank you Rohit.
operator
Thank you. The next question is from the line of Neil Bahal from Nigen PMS Please go ahead.
NEIL BAHAL
Hi everyone. Congratulations on a good set of numbers. I had a couple of questions to begin with the spirits division of ours. I saw in Q4 that our EBIT was 78 crores. This also was coinciding with a substantial jump in margin. So first question was, do you think this kind of a margin is sustainable going forward in the coming couple of years?
Rupark Sarswat
You mean for the spirit business?
NEIL BAHAL
Yeah, I think as per your presentation, the margin showed 27.6% on the EBIT side.
Rupark Sarswat
So look, there is nothing in terms of the broader makeup of the business and I will, you know, request my finance and portable spirits people to jump in to give an answer that structurally we faced some challenges a couple of years ago which was higher ethanol costs, getting price increases, etc. Now that has been happening. I don’t see fundamentally anything happening in cost which will drastically get overall margins down. Yeah, there is from time to time some variations in local ethanol prices, etc. There is a lag in terms of getting price increases. That is the nature of the ethanol because you can’t just go to the market and increase the price.
You need to get these approvals. And from our side, while these kind of pressures continue, we mentioned to you that we have been focusing on moving up the value chain in terms of premiumization. So whilst I’m not only commenting on one quarter, our finance guys can tell if there was something exceptional. I think broadly in the couple of years to come, there is no red flag that I see immediately to say, oh, suddenly, you know, portable spirit margins are going to come under pressure. I’ll pause. I think there are other people who may add some more granularity to this.
Raju Vaziraney
See, just to substantiate to what our CEO rightly said, one major reason for our very good profit in last year has been Uttarakhand. Uttarakhand is our home state and we have leadership in not only Kundrilika but we are among the top three companies in Uttarakhand. It’s a well known fact that Kantralikar, we have, I mean almost 8 out of 10 bottles sold in Kantralikar. Tetra packs sold in country liquor are from our company and we are, we are having, since we are in Kashipur, which is a part of Uttarakhand, we are able to augment lot of, lot of, lot of volume and put it in the market and we are known for quality.
So there has been a, there has been a substantial jump in Kandry liquor which is very profitable as we mentioned earlier. And I’m sure To what Shuklaji said in up we are doing a wonderful job. In terms of volume here though the market is smaller. But in terms of bottom line the business is very interesting and of course we have top line supremacy. So this will. There is no reason as our CEO said for us to not work closely on this growth. And I’m sure in the next two years we are able to harness the potential.
I would request my colleague Mr. Manish Pant who oversees the Uttarakhand market in addition to his current responsibilities also to give his inputs on Uttarakhand success.
Manish Pant
So since we were the first mover in the tetra in Uttarakhand as Raju Ji says that we are commanding the market with the 80% of the total volume in country liquor. Apart from that the as is the premiumization of the our branded this MFL segment and tie with the Amrut and with the more volume from the Bacardi has given a substantial boost to our bottom line.
NEIL BAHAL
Okay sir, so just to reconfirm this 78 crores of EBIT that we reported in our portable spirits business, there is no one off. This is largely due to operational efficiency or scaling up of that business. Am I right?
Rupark Sarswat
That’s it. That’s right. Correct.
NEIL BAHAL
Okay. So second question around this would be do you think this is the kind of a run rate we should expect for FY26 or do you think there could be some more growth in FY26?
Raju Vaziraney
It is not that by fluke we got this success. It is by design. And as I mentioned in my earlier discussion a few minutes ago, we are going to address at least three more markets in this current year. So we will definitely get that additional advantage in terms of volume. And we don’t enter any market where there is risk to lose money because the liquor is marred by bad payments. So as a management decision we will enter those markets which are corporation controlled, in other words, where the payment is secure and carry the success story to the other states.
So one is volume. We will increase more states and also the existing brands will definitely grow. And these are our home states, UP and Uttarakhand and Delhi. We have made our presence felt. I’m sure it is a very bright future in the current year.
Rupark Sarswat
Yeah, just to add Neil, I think to be a little conservative may think so. If you see even if you don’t look at quarterly trends at least we have reasons to believe that our annual trends should be maintained. And of course we continue to try and improve on them. And there are factors which come in a business as you know but since you asked the direct question I think there is, you know nothing extraordinary which should concern us at an overall level if not quarterly at least you can look at an annual stand.
NEIL BAHAL
Okay. I mean if that’s the case I must congratulate the team because this is then exceptional performance. I mean this is far ahead of whatever we had in mind. So congratulations on this one. Follow up questions would be would you or would your team would have computed for our spirits business what is our return on capital?
Anand Singhal
Return on capital it is around 17 to 18%.
NEIL BAHAL
17 to 18%. Okay. And talking last question, sorry talking around the scheme of demerger that we have in mind. Would you know how much of our debt will go where in which business will how much debt will get transferred?
Anand Singhal
Just to brief you as of now position we are having say about 1200 crore long term debt in the books of the company out of which about 500 crores will go to the chemical division and 700 crores will go to the liquor division. This has the direct debt also which has been taken for the expansions of the particular unit and this debt also have something like the other debt which has been taken by the company for the other purposes. So as far as the repayment or is concerned so every year we will be having about 150 crores 260 crore debt repayment in the split division that is the liquor division and about 90 crore in chemical division.
So this is what about is going. To going to the companies. Different companies.
NEIL BAHAL
Understood. I mean thank you so much for the time and I think congratulations once again. Thank you.
Rupark Sarswat
Thank you.
operator
Thank you. Before we take the next question we would like to remind participants that you may press star in one to ask a question. The next question is from the line of Saket Kapoor from Kapoor and co.
Saket Kapoor
Please go ahead Namaskar team and thank you for this opportunity. Thank you for a very detailed conversation which answers most of the questions. The point for investors are definitely what Anand sir just alluded to the split of debt and that that answer remains the question remains in our mind is how are we going to repay this debt going ahead and also are we done with the Capex cycle? I think so. For the last two fiscal closer to 1300 crores CAPEX has gone through. So my first question was for directed toward this repayment or lowering of debt exercise.
What’s the thought process behind it?
Anand Singhal
Sake to be very frank in this year the company has earned a cash profit of about 7,360crores and the same run rate suppose is continuing in the next years also then the company will be able to pay the entire debt as per the repayment schedule. Number two, what you said about the Capex is we have almost done with all the big size Capexes because the grain distillery and everything has been completed and in place. So we are not looking at something like a big size Capex in the near future. Accept some of the Capex like maintenance capexes and some of the Capexes which is already going on and is not complete.
But no big numbers you will see in future at least till the demerger. Of the company means next year.
Saket Kapoor
And secondly sir, on the biofuel part of the story which with the blending program being the targets being preponed and also being achievable, what are the price trends in the raw material and also the availability of the raw material and the margin profile for the biofuel segment? Because when we look at the margin profile, although Q on Q basis the margins have moved up from impact doubled from what we did for December quarter to March quarter. But how should the availability and the pricing of the raw material, what’s the outlook especially for the biofuels segment?
Rupark Sarswat
So I will second, I will give a more generic response. First and one of the reasons I commented on the biofuels business over a period of three to four or five years because I think that is how this business ought to be looked at. And I mentioned to you, see this is a business which has been a priority of the government driven by several factors. The first of all being reducing forest outflow, improving farm sector incomes, energy independence. So look, first of all these three priorities are going to remain priorities of the government even more than before if you can look at how the world is shaping up in terms of geopolitics.
And second thing, the fact that the government is already thinking about possibly up to a 30% lending. Of course there are many, many factors to it which I am not discussing right now is the fact that the government is in their assessment quite positive about how the program has gone so far and positive about how the program will proceed into the future. You know, in terms of capacities. Also I mentioned to you that we started with a target of 5% in 1920 met 5% 2021 10% met 8.1% 2122 10% met 10% 2223 target 12% met 12% 2324 15% met 15% or 14.6% 2425 target 20% met 18% 20% 2526 expect it to be so the track record of five or six years of this broad program has been in general a success.
Now you are right to say that this has several factors. For example, it has global crude price. Now global crude price because it affects ethanol price, it affects government decisions and so on. It has grain price and I’m sure those variables are always there to consider. But rather than speculate, I think the fact that how it has proceeded over the last few years successfully pre owned and the government is actually thinking about or contemplating a higher blending should give us some confidence. Now in general we have seen that there is adequate food grain in the country.
The government is also saying that while we started with rice, one of the major drivers as far as grain is concerned is going to be corn in future. Indian corn productivity right now is much lower than global standards. Now there are various actions which may happen shape up in future including better varieties, possibly even introduction of GM corn, etc. Or import of GM corn. But I would rather than dive into every specific detail, I would say and the other thing, it is not something where the pricing is determined by the supplier and it is not purely a market driven pricing because of national imperatives.
So what the government has done very interestingly in this case is to balance out and to make sure it also remains viable for manufacturers. There are various sources of ethanol, C heavy molasses, B heavy molasses, damaged food, grain excess. So there is a pricing which is done separately for it coming from all these sources. It is not that it is one is the same price. And the whole idea is to make sure that while it is going to be a rainbow of various sources coming together to meet that national imperative, the government is going to ensure trying to enable both the back end in terms of feedstock supplies as well as the pricing in terms of front end to make sure it is viable for manufacturers.
Given that I have given you a long overall picture but I did not find a short way of answering it to you is there is no reason to believe that suddenly this business is going to become unprofitable. I think if larger objectives of the nation as stated is higher than this are to be met, then the necessary actions in terms of feedstock and pricing will continue to happen.
Saket Kapoor
Thank you for it. Last point is on the EMA price trend. If you could just allude since we have strong profitability in our chemical and the alcohol business, how are the price trend for the ENA currently?
Rupark Sarswat
Yeah, so let me give you one comment and then I’ll ask maybe Shuklaji to comment and maybe Manish can add.
S. K. Shukla
Sure.
Rupark Sarswat
As I said, we have multiple outlets for our economics. One is chemicals, the other is portable spirit which is topmost priority for us because that gives us the biggest bang for the buck. Then of course there is biofuels. So we look at an overall picture in terms of our capacities, in terms of cost, price, viability and then we position for our enn. Also remember that where we have certain important tires like Bacardi, where we prioritize ENA and we also get therefore both stability as well as realization for other advantages that we deliver to our customers.
Now price trend domestically in terms of ENA has been stable. Internationally it has been under pressure because there is a lot of supply from other countries. But for domestic ENA prices and some more details of it maybe I will request Shuklaji to give some comments.
S. K. Shukla
Thank you. Because the domestic DNA prices is very from state to state because estate excise tax involvement is measured. If you are transferring ENF from one state to another state you have to pay export duty likewise import duty. So in the state of up the prices is varying from 64 rupees to 68 rupees per liter and whereas in Uttarakhand it is from 77 to 78 rupees per liter. This is because of inter estate applicable of state excise duty. But I would like to also comment on the last your last question about the price reliability of the ethanol raw material reliability of ethanol.
See Government of India as rightly said by the our co and I am adding to his point that the main behind of the ethanol sustainability is the farmer and government of India linking the farmer income with the ethanol income. So all the in all the state major development program is going on and this year we are expecting more than 25 to 30% production increase in Indian corn. This is because of the state efforts and all the industries are need to purchase the maize on the MSP price and according to that government of India is fixed the ethanol price.
So nowhere this program is going to deactivate rather than very possibility to go for the 30% lending level in a couple of years because central government is focusing on the maize feed stock and the future of the maize feed stock is bright. As said by the CEOs that Indian productivity is 3 ton per hectare as compared to the 10 ton hectare 11 ton per in US. But now because of innovative hybrid seeds still in our area we we are doing the maize development program and we are getting 10 tons. We have started getting 10 tons yield from the corn so farmer is able to get two times, three times more margin than the traditional crop like rice or wheat.
So looking to the all the focus of the government, state government, central government, the canal bending program’s future is very bright. Thank you.
Saket Kapoor
Thank you sir for all the detailed answers and thank you to the board for recommending 100% payout this year. All the best. Thank you.
Rupark Sarswat
Thank you.
operator
Thank you. Participants who wish to ask questions may please press Star in one at this time to ask a question, please press charn one now. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Rupark Sarswat
Yeah. Thank you very much for giving sparing your time, first of all to come to this call. And it’s really the first warm, hot summer day in the month of May and also staying here to listen to us talking about the results, about the company, about our plans, asking us questions, which is also an opportunity for us to learn many times. So thank you for all of that. With that, on behalf of everybody in ieo, thank you once again and wish you all the best. Thank you. Thank you. Thank you very much.
operator
Thank you. On behalf of Nuvama Wealth Management and Investment limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.