Ladies and gentlemen, good day and welcome to the Nava Limited Q1 FY26 earnings conference call hosted by ICICI Securities. 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 touch-tone phone. Please note that this conference is being recorded. Now I hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you, and over to you, sir.
Thank you, Shubham. Good evening. On behalf of ICICI Securities, I welcome you all to the Q1 FY26 earnings call of Nava Limited. Today, we have with us from the management, Mr. Ashwin Devineni, CEO, Mr. G.R.K. Prasad, Executive Director, Mr. Nikhil Devineni, Executive Director, Mr. K. V. S. Vithal, CFO, and Mr. V. S. Raju, Company Secretary. We will begin with the opening remarks from the management, which will be followed by Q&A. Thank you, and over to you, sir.
Thank you. Good afternoon, ladies and gentlemen, and thank you for joining us today. I am delighted to share that Nava has once again set a new benchmark, delivering its highest-ever quarterly profit in Q1 FY26, a clear reflection of strong and consistent operational performance across all businesses. Consolidated revenues reached INR 1,213 crores, rising nearly 15% sequentially, while net profit surged over 61% quarter- on- quarter to INR 490 crores. This exceptional growth was driven by robust energy operations, higher realizations in our metal businesses, and disciplined cost control. One of the most notable achievements this quarter was the sharp improvement in Maamba Energy Limited's receivables position, where arrears of $75 million were successfully collected. Equally significant was the maiden dividend of $32.5 million declared by MEL, further strengthening our balance sheet and enhancing cash flow visibility. On the growth front, we are making steady, tangible progress.
The MEL Phase 2 expansion, adding 300 megawatts of capacity, and the 100-megawatt solar project in Zambia are moving forward on schedule. Our commercial agricultural initiatives in Africa are advancing, with avocado plantations poised for their first commercial harvest later this year, and the integrated sugar project progressing as planned. In India, our strategy to convert captive power plants in Telangana and Odisha into independent power producers will enable higher PLFs and open new market opportunities. This quarter's performance highlights not just the resilience of our business model and the strength of our execution capabilities, but also the clear momentum in our strategic growth initiatives. We are building on this foundation to deliver even greater value in the quarters ahead. I now welcome your questions. Thank you.
Thank you very much. We will now begin with a question-and-answer session. Anyone who wishes to ask a question may press star and one on the touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. 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 comes from the line of Anukul from InCred. Please go ahead.
Yeah, hi, sir. Thanks for the opportunity. Sir, congratulations on the success in recovering the receivables that were due in MEL. I just wanted to know that the outstanding receivables are now $85.5 million. So how much of this are you expecting for this year, basically for FY26?
Yes. So I think with regards to arrears, like I've mentioned on the previous calls too, this is a constant discussion process with ZESCO. We expect to receive the entire $85 million in arrears before the end of this financial year.
Okay. So entire receivables would be receivables by this entire year, basically?
Yes.
Got it. Got it. Another question that I had was last con call, you told that there are tax exemptions will continue for the entire financial year. But this year, the tax was there. Could you just throw some light on the same?
Yeah. So we have revisited the tax position in consultation with the local tax authorities in Zambia. And we have received a confirmation that from this year onwards, which is financial year 26 onwards, part of the tax concession will not be available. So just to clarify, up to last year, we had 100% of the power profits, profits generated out of the power business, were exempted. For the next three years, which is FY26, 27, and 28, we will be taxed at 50% of the tax rate, which is 15%. And the last two years, we will be taxed at 75% of the tax rate, which is 22.5%.
All right, sir. Got it. Got the clarification. Thank you so much on that.
Thank you. The next question comes from the line of Viraj Mahadevia from MoneyGrow. Please go ahead.
Hi, sir. Questions on stable results. Just if you could elaborate, please, a little bit on the sugar cane or the sugar plant in Zambia. You mentioned the power plant has been set for relocation. You can elaborate what that is, why you decided to enter sugar in Zambia, and how this 200 million will be funded as an equity?
See, the sugar plant, the co-generation power plant has been with us in Nava since 2017 in an ideal way. What we found is we could actually have that relocated as part of the KSL integrated project to obtain two benefits. One, to meet full power requirement of the sugar project, and also to provide an opportunity to sell power in that region, which is very short in terms of power. That's how the proposal is to relocate the 20-megawatt power plant to Zambia.
So sorry, just to understand the full thought process, the raw cane stalks from the plantation were used as part of the sugar power plant to generate electricity, which is sold back to the grid. Is that correct?
No, no, no. This power plant has been idle. It has not been generating any power in the Nava. What we are proposing to do is to have that relocated to Zambia to obtain a better value. Otherwise, we need to have it scrapped here. So by doing the relocation, we actually are getting a much value off-site in terms of capturing the entire WDV value of that sugar plant.
Understood. And then what?
The gas from processing the sugar would be used as fuel. Part of the power would be used for captive use by the sugar plant, and the remainder balance would be sold in the open grid.
Understood. Can you elaborate what the 200 million is required then for if the plant is already in existence in India and shipped to Zambia?
I'm sorry. Can you repeat?
The estimated CapEx outlay for the sugar project is $200 million.
Right.
It's being shipped to Zambia.
The $200 million comprises the full plantation. The plantation cost also is included in that $200 million, aside from the actual sugar plant, the co-generation power plant, and distillery.
Okay, and over what period will this investment be made?
Sorry?
Over what period will these investments be made?
This will get spent till April 28th, when we expect the crushing and the sugar production commences.
Next two financial years.
Next two financial years. That's it.
Okay. Thank you. I'll come back.
Thank you. Before we take the next question, we would like to remind participants, if you wish to ask a question, you may press star and one. The next question comes from the line of Nidhi Shah from ICICI Securities. Please go ahead.
Yes. Thank you so much for taking my questions. So my first question is on MEL too. So I just wanted to ask, what is the CapEx that was done in Q1, and what is the CapEx that remains for this plant?
See, MEL started the Phase II works in August 2024. Currently, the process is on, and the incremental CapEx that you see is practically on MEL Phase II. It's about INR 700 crores? Incremental one?
Right.
About 600 crores. Yeah.
All right.
And the balance works will happen over the next four quarters . We expect the bulk of that CapEx getting incurred in that period, with the balance towards the commissioning phase, which is in Q2 of FY27. Q1, end of Q1.
All right. My second question on this is that I recall that 70% of the capacity for Phase II has been tied up. So what was the tariff for that, and what is our plan for the remaining 30% that is currently untied?
Sorry. 100% of the power is tied up.
Okay. So that remaining 30 is another player, or is it the same?
Oh, no. It's always been the same utility, ZESCO. We have a PPA with them for all our power.
All right. What is the tariff of that PPA?
$0.095. Sorry. I'm thinking. $0.095 per kilowatt hour.
Okay. And on ferroalloys, my question is that the volumes and the realization as per the PPT have gone up significantly. Yet we see that PPT is down on a YoY. Were there any, say, extraordinary or one-time costs?
No. So I think in terms of the overall market for ferroalloys, there's. One more time. Hello?
Yes, sir.
Yeah. So in terms of the overall market for ferroalloys, there's been not much of a difference compared to last quarter. It still continues to remain in a fairly subdued manner. But I think over the last quarter, you saw better realizations on two counts. One is the heavy reliance upon the Japanese market, where we have a long-term contract. That has yielded far better results than the spot market. And adding to that is the project diversification into Ferro Silicon. That too has helped us achieve better results, mainly owing to the exports made to the U.S. So both these things jointly have yielded better realizations.
Right. So my question primarily was that the realizations are better and the volumes are better. So why is EBITDA down this quarter for ferroalloys, on a YoY basis?
Sorry, we aren't able to hear you.
Am I audible now?
Give us a second. Yeah. They're just working on numbers.
Silico Manganese's realization was lower year on year, but that's compensated by the Ferro Silicon realizations being higher.
All right. All right. Thank you.
Thank you. The next question comes from the line of Sri Gopal Kakani from SG Kankani & Associates. Please go ahead.
Good afternoon, sir. I just wanted to get reconfirmation that the 100-megawatt solar power plant is to be commissioned by July 26, and 300-megawatt thermal power plant is to be commissioned by August 26. I just wanted to get that reconfirmed.
Yes. So these are correct. That is the plan.
Okay. And sir, one more question. In this quarter, this mining operation, sir, profitability has come down while. Is there any major reason, sir?
One second.
This is mainly on account of the forex impact between USD and Zambian Kwacha.
Okay. Okay. Okay. Thank you, sir.
Thank you. The next question comes from the line of Viraj Mahadevia from MoneyGrow. Please go ahead.
Hi, sir. I'm back again. What is the net cash on the books for Q1? Cash net debt at a consolidated level?
Net cash of close to INR 1,428 crores.
Sorry?
2,400 crores cash.
2,400 cores of net cash?
Crores cash.
Crores cash. Okay. And how much is the debt?
Net cash will be around INR 1,400.
INR 1,400. Okay. Thank you. My second question is, is there a Zambia power plant shutdown for maintenance planned in Q2?
I'm sorry. Can you repeat that?
Is there a Zambia power plant shutdown for maintenance planned in Q2?
Both the units are going to go under shutdown in the next two months for their scheduled biannual maintenance.
Right. Okay. Thank you. Sir, just a suggestion. It would be helpful if we could get in the investor presentation or a press release a table on sources and uses of funds for the various projects that are underway. Because we have four or five projects underway with different timelines, with different amounts. It would be really helpful if we could have a summary table highlighting what is the CapEx we plan to spend over the next two years, and what are the sources for that, and the timelines for which project.
Sure. We'll make sure. Can I?
Thank you very much. All the best.
Thank you. The next question comes from the line of Vijay Peep, an individual investor. Please go ahead.
Hello. Am I audible?
Yes, sir.
Okay. First of all, let me begin with congratulating the CEO of the company on the handsome bonus of $1.5 million declared by the company, and the employees of the company for the RSUs who received the RSUs as per the stock option plan. My first question is regarding the company policy of distributing 25% of the profits to the shareholders as dividend. Does that policy still hold?
Yes. So I think our primary dividend policy is between, I'd say, 25%-30%. I think the last few years, we've been giving 27%-28% of the standalone profits. But that being said, that is our standard dividend policy. But given how our international operations perform and what dividends we receive from the international operations, which sometimes is unknown at this point, we will always be open to considering special dividend in addition to the.
So this 25.
Normal dividend based on the policy.
So this 25% received by Nava Limited will be including the dividend or including the profits of the Zambia operation?
No. So the Zambia operation's profits are shown on the consolidated level. Once Zambia declares a dividend to, say, the Singapore entity, and the Singapore entity in turn declares the dividend to Nava, it comes into the Nava's books anyways. So it's difficult for us to declare a dividend here when we have not received it from the Zambian entity, and that's exactly why our dividend policy is based on the standalone numbers, while we have the leeway to always announce special dividends like we have this time based on dividends we receive from Africa, sorry, the Zambian operation. Sorry.
Okay. But honestly, it was a disappointment that, like last year, there was no interim dividend declared this year. Coming to the next point that I have, it says in strategic updates that Nava Global will directly hold 65% equity in MSEL JV. Now, what is MSEL?
MSEL is Maamba Solar Energy Limited. It's basically the company that's setting up the 100-megawatt solar plant.
I see. So otherwise, the Maamba Energy Limited 65% holding is with Nava Limited?
No. Maamba Energy is also owned by Nava Global. By the way, so Nava Global was previously called Nava Bharat at Singapore, which was the holding entity for all these assets. We changed the name since first of all, well, yeah, I mean, Nava Global also owns 65% of MEL. All we're doing here is moving out MSEL, the solar entity, from Maamba Energy Limited and having a direct shareholding from Nava Global at 65%, and JCM Power owning 35%.
Yeah. So with all this consolidation taking place of Zambia operations under the control of Nava Global Limited, is Nava Global Limited having any intention of listing itself on Singapore Exchange or any of the foreign exchanges or having an IPO?
Currently, that's not in the plans.
But there is a possibility that Nava Global will go global and get listed on foreign stock exchanges?
No. I mean, I don't want to speculate on this call right now, but currently, that's not on the books.
Okay. So in that case, Nava Limited remains the ultimate owner of Nava Global Limited?
Yes.
Thank you. I'll go back in the queue.
Thank you. Are there no further questions from the participants? I now hand the conference over to management for closing comments. Thank you, and over to you, sir.
Thank you for your insightful questions. You may reach out on the wider investor platform for any further queries or clarifications. Thank you.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line. Thank you.