Ladies and gentlemen, good day and welcome to Gokul Agro Resources Limited Q2 and H1 FY 2027 earnings conference call. 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. I now hand the conference over to Ms. Krishna Patel from EY. Thank you and over to you, ma'am.
Thank you, Iqra, and good afternoon, everyone. A warm welcome to all participants joining the Q2 FY 2027 and H1 FY 2027 earnings conference call of Gokul Agro Resources. Joining us today is Mrs. Dhara Chhapia, the Chief Financial Officer, who will discuss the company's operation and financial performance for the quarter and half year and address your questions thereafter. Before we begin, I would like to remind you that certain statements made during this call may constitute forward-looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. With that, I would like to hand over the call to Mrs. Dhara Chhapia for her opening remarks. Thank you, and over to you, ma'am.
Thank you, Krishna, and good afternoon, everyone. On behalf of Gokul Agro Resources Limited, I warmly welcome all of you to our earnings conference call to discuss the financial and operational performance for Q2 financial year 2027 and H1 of financial year 2027. This is an important milestone for us. As this is our first earnings conference call, we are pleased to begin a more structured and regular engagement with the investor and analyst community. Since this is our first earnings call, before discussing our quarterly performance, I would like to spend some time introducing the company. Our journey from edible oil processor to an integrated agri-processing platform. The roots of our business go back over four decades in the edible oil industry.
Gokul Agro Resources Limited became an independent company following the demerger of the edible oil business from Gokul Refoils and Solvent Limited, and was subsequently listed on the NSE and BSE. Since then, our journey has been one of consistent expansion across capacities, geographies, products, and customer segments. Over the years, we have progressively expanded our refining capacity, developed seed crushing capabilities, entered castor derivatives and specialty fats, created large liquid storage infrastructure, and built an increasingly diversified processing platform. Between financial year 2022 and financial year 2024, we expanded our geographic footprint by establishing a refinery near Krishnapatnam Port in Andhra Pradesh and acquiring the Haldia refinery in West Bengal. In financial year 2025, we acquired our Mangalore refinery, giving us a manufacturing presence on India's southwestern coast. We also initiated our oil palm plantation program under the National Mission on Edible Oils – Oil Palm.
In financial year 2026, we entered biodiesel with a 300 ton per day facility at Gandhidham and increased our focus on building our branded consumer business. Today, we have evolved from a regional edible oil processor into a pan-India integrated agri-processing platform with four strategically located manufacturing facilities at Gandhidham, Krishnapatnam, Haldia and Mangalore. A diversified product basket, a nationwide distribution network, and an international presence across multiple markets. To put the scale of this transformation into perspective, revenue from operations increased from approximately INR 8,387 crores in financial year 2021 to INR 24,077 crores in financial year 2026, representing a five-year CAGR of 23%. Over the same period, EBITDA, including other income, increased from approximately INR 157 crores to INR 716 crores, representing a five-year CAGR of 35%, while PAT increased from INR 45 crores to INR 387 crores, representing a five-year CAGR of 54%. Business model.
At its core, our business is built around three fundamental strengths. First, sourcing. Second, manufacturing and processing scale. Third, market access. Our integrated value chain spans sourcing, seed crushing, refining, storage, value-added processing, packaging, branded products, domestic distribution, and exports. This integration is important because edible oil and agri-commodities operate in a dynamic environment influenced by global commodity prices, crop availability, currency movements, freight rates, government policy, and import duties. Our sourcing capabilities, port linked infrastructure, large storage capacities, and diversified product portfolio allow us to respond to these market dynamics and allocate our resources across products and markets. Today, our business broadly comprises edible oils, castor oil and derivatives, specialty fats, biodiesel, and various agri-processing by-products. Edible oils, the core engine of scale. Edible oil remains by far our largest business.
Our portfolio spans palm oil, soybean oil, sunflower oil, mustard oil, groundnut oil, cottonseed oil, rice bran oil, palmolein, and vanaspati, among others. During H1 financial year 2027, edible oils accounted for approximately 85% of consolidated volume. Importantly, we are not dependent on one edible oil category. Within our operating portfolio, palm and soybean oils are the largest categories, complemented by sunflower and several other edible oils. This provides flexibility in both sourcing and sales, depending upon relative commodity economics and customer demand. Our objective in edible oils is not simply to chase throughput. We want to use scale, sourcing efficiency, our pan-India manufacturing network, stronger institutional relationships, and an increasing presence in the branded consumer segment to progressively improve the quality of our business. One of the major strengths of Gokul Agro is our multi-location manufacturing platform.
Our Gandhidham plant is our largest and most diversified location, with approximately 3,400 tons per day of refining capacity, 3,200 tons per day of seed crushing capacity, 300 tons per day of biodiesel plant, and substantial storage infrastructure and value-added product capabilities. Krishnapatnam provides approximately 1,400 tons per day of refining capacity, while Haldia provides approximately 1,350 tons per day. We also have our Mangalore facility on India's west coast. The significance of these locations is strategic. They provide us access to multiple ports, multiple consumption centers, and different regional markets. They reduce dependence on any single manufacturing base, provide supply chain flexibility, and enable us to serve customers more efficiently across India. Another strength is that we operate across multiple channels. Historically, B2B has been our largest business, serving institutional as well as non-institutional customers. Today, however, we are deliberately building additional engines around exports and branded B2C.
During H1 Financial 2027, approximately 79% of channel revenue came from B2B, 13% from exports, and 8% from B2C retail. By comparison, B2C represented around 5% in Financial 2026, demonstrating the direction in which we are gradually moving. Our institutional customer base includes some of India's established food and consumer companies, such as Parle Biscuits, ITC, Britannia, Balaji Wafers, and others. B2B gives us scale. Institutional relationships improve the quality and stability of the customer mix. Exports provide geographic diversification and additional opportunities. B2C has the potential to improve brand strength and the margin profile over the longer term. That combination is central to how we think about the future of Gokul Agro. Building a consumer franchise. Historically, our biggest strengths have been sourcing and manufacturing. We are now working to translate these strengths into a much stronger consumer franchise.
Our principal consumer brands include Vitalife, Mahek, Sun Premium, and Palm Jyothi, covering soybean, sunflower, mustard, groundnut, cottonseed, rice bran, palm, and other edible oils. Vitalife is being developed as a broader pan-India growth brand, while Sun Premium has an established focus in Karnataka. The incremental challenge is to deepen consumer awareness, expand retail availability, and create stronger brand preference. Our overall network comprises more than 650 dealers and distributors, with our products reaching 28 states and union territories. During Q2, we made further inroads into Jammu and Kashmir by appointing a C&F depot and distributors while strengthening Vitalife presence across Punjab, Haryana, Gujarat, and Karnataka. We have initiated brand visibility through modern retail formats, strengthened social media and point-of-purchase communication, and launched sales force automation to improve secondary sales visibility, stock movement, and field force productivity.
Our objective is to build distribution first, create repeat consumption and consumer trust, and progressively improve the contribution from branded sales. Exports are another important element of our strategy. We have international presence across 33 countries encompassing Asia, Europe, Middle East, and America. During H1 Financial 2027, export markets represented 13% of revenue. Our H1 exports were diversified across markets including Singapore, China, Germany, UAE, USA, and several European and Asian countries. This geographic diversity is increasingly important as our portfolio moves further towards value-added products, castor derivatives, and biodiesel. Castor derivatives form another differentiated part of our portfolio. We manufacture castor oil as well as several value-added derivatives, including 12 HSA, hydrogenated castor oil, ricinoleic acid, and other specialty products. These products serve a variety of industrial and specialty applications and provide us participation beyond conventional food oils.
Our long-term objective is to progressively enhance value addition by moving further downstream from basic processing towards derivatives and specialty formulations. Our specialty fats portfolio addresses bakery, confectionery, food processing, and institutional applications. Our range includes products such as Richfield, Pride, Biscopride, Puffpride, and the newly introduced Rich Chef. Although specialty fats represent a smaller proportion of our current overall volumes, we will see them as strategically important because they allow us to leverage our existing edible oil processing expertise for more specialized customer requirements. This is again consistent with our wider strategy of gradually improving our value-added product mix. Biodiesel is our newest export revenue growth platform and has already begun making a meaningful contribution. We commissioned a 300-tonne per day biodiesel facility at Gandhidham, which got fully operational during Q1 of financial year 2027.
The facility allows appropriate residues and non-edible fractions from the broader processing ecosystem to be converted into a renewable fuel product. Our biodiesel facility is ISCC certified, supporting access to eligible international markets subject to regulatory and market requirements. During Q2 FY 2027, biodiesel generated revenue of INR 237 crores, while during H1, the revenue of INR 596 crores. We see biodiesel as one of the newer growth pillars that can complement our established edible oil franchising over the medium term. Another long-term initiative is our oil palm program. Under the National Oil Palm Program, approximately 560 hectares were completed during FY 2025 and 2026, with another 900 hectares under development for completion during 2027. Oil palm is by its nature a long-duration initiative. We therefore do not look at this program through the lens of near-term quarterly financial returns.
Strategically, it represents an opportunity to participate in development of a domestic raw material base, strengthen backward integration, and contribute towards India's longer-term efforts to reduce dependence on edible oils. Turning now to the financial performance during Q2 of FY 2027. Revenue from operation was INR 7,481 crores, representing year-on-year growth of 13%. EBITDA, including other income, increased by 41% to INR 276 crores. EBITDA margin increased from 2.94% to 3.68%, representing an improvement of approximately 74 basis points year on year. PAT increased 40% to INR 150 crores. PAT margin consequently improved from 1.61% to 2%. Earning per share increased from 3.43 to 4.95. Effective 24th September 2026, the government revised the import duty structure on key edible oils with the objective of reducing landed costs and improving affordability for Indian consumers.
In the period leading up to the announcement, we witnessed some temporary deferment of purchases across the trade as dealers and distributors awaited clarity on the revised duty structure and its impact on domestic edible oil prices. This resulted in lower uptake during September and consequently contributed to higher inventory levels at the end of the quarter. Following the announcement, the market has progressively adjusted to the revised pricing environment and channel activity has started normalizing. We therefore view the increase in inventory largely in the context of this temporary timing impact, rather than an indication of structural weakness in underlying demand. H1 FY 2027 financial performance. Revenue from operations increased by 10% year on year to INR 12,763 crores. EBITDA, including other income, grew 46% to INR 493 crores. EBITDA margin expanded from 2.92% to 3.86%, an improvement of approximately 94 basis points.
PAT grew 54% to INR 274 crores. PAT margin improved from 1.54% to 2.14%. Earning per share increased from 5.86 to 9.11. The important point is that profitability grew materially faster than revenue during the first half. This reflects our continued emphasis on sourcing discipline, operating leverage, customer and product mix, and disciplined management of commodity exposure. A stronger balance sheet to support growth. As our scale has increased, our balance sheet has also strengthened. Our net worth has increased from approximately INR 345 crores in FY 2021 to INR 1,697 crores as of 30th September 2026, representing nearly fivefold growth. Our debt-to-equity ratio, after reaching 0.77 times in FY 2024, reduced to 0.41x at the end of FY 2026, and further to 0.36 times as of September 2026.
This is especially important because this balance sheet improvement has been achieved while we simultaneously expanded our manufacturing footprint and invested in growth. We intend to retain this financial discipline as we execute the next phase of capital expenditure. Capacity expansion: preparing for the next growth cycle. Our existing manufacturing footprint has achieved high utilization in key refining operations. This gives us confidence to invest further behind demand. We are undertaking capacity additions across our four manufacturing locations that are expected to add approximately 8 lakh tons per annum of capacity. For us, the purpose of this investment extends beyond simply increasing nameplate capacity. It should provide greater throughput, better fixed cost absorption, shorter supply chain lead times, improved geographic flexibility, the capacity to support growth in B2B and B2C, and greater ability to serve incremental market demand. Renewable energy and operating efficiency.
Sustainability investments are also increasingly linked to operating economics. During Q1 FY 2027, we commissioned a 15 megawatts captive solar plant in Gujarat. We are also pursuing additional captive solar projects, including 4 megawatts in Andhra Pradesh, 4 megawatts in Karnataka, and another 10 megawatts in Gujarat. These investments are intended to reduce our dependence on conventional power, lower energy costs, and improve the sustainability profile of our operations. Going forward, we intend to maintain transparent and consistent communication with the capital markets and help investors develop a deeper understanding, not only of our quarterly performance, but also how the underlying business is evolving. As a starting point, we intend to conduct earnings conference calls following our half year and full year financial results. With that, I conclude my opening remarks. Thank you for your time and attention. We will now be happy to take your questions.
Thank you very much, ma'am. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. 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. A reminder to all the participants, if you wish to ask a question, please press star and one. The first question is from the line of Shanaya Jain, an individual investor. Please go ahead.
Hello. Hi, sir. Congratulations on good set of numbers. I just have had few questions. First, revenue increased by 13% year-on-year in Q2 FY 2027 and 10% in H1 FY 2027. How much of this growth came from volume, commodity price realization, and new business such as biodiesel?
Yeah, thank you for your question. The revenue growth of 13% in Q2 and 10% by the H1 ended 30th September 2026 is broadly driven by the price realizations, better price realizations. We have already attained full optimum capacity. The volume growth, we are not expecting volume growth in this year. We are already bringing up new CapEx to expand the capacity for the demand which we have. Yeah.
Sure. Also one more question. Q2 FY 2027 revenue was INR 7,481 crore compared with Q1 FY 2027. So what caused the 42% sequential increase and how much was seasonal versus structural?
42%? Can you again repeat your question?
Shanaya, may I request you to please repeat your question? Shanaya, can you hear us? Ladies and gentlemen, due to no response, we will go ahead. A reminder to all the participants, anyone who wishes to ask a question may press star and one. We will take the next question from the line of Keshav Garg from Counter Cyclical PMS. Please go ahead.
Sir, first of all, I want to congratulate the management for the consistently excellent performance that the company is posting and I believe that the performance of Gokul Agro is way better than any other edible oil company which is listed. Many congratulations for that. Now, sir, the concern is that this quarter we posted possibly all-time high margins of 3.5%. I believe in Q1 the margins were 3.9%, but before that the margins were 2.5% or so. Sir, is this a sustainable margin, 3.5%? Can it sustain or is there some element of inventory gain or Forex gain and so on?
Thank you for your question. Thank you, Keshavji. These margins are sustainable. The margins have been expanding gradually. This margin expansions are a reflection of what we have done, we have done a lot of in branding and value-added portfolio. We have better capacity utilizations. Sourcing procurement has been smarter, and even the cost control measures have been highly sustainable. We expand, and also the B2C segment is what we are widening the distribution reach. This all together has given us a margin expansion, and we expect the same to be sustainable.
Understood, madam. Madam, now the concern is that, madam, there have been many companies like KS Oils, Ruchi Soya, and many others in the past that ultimately face huge inventory loss and basically they become bankrupt. Madam, what are we doing to insulate ourselves from the volatility in the edible oil prices and on the Forex side? I hope that one fine day we will not see a huge loss due to the volatility on these counts.
I appreciate your question, sir. We are not into speculation, sir. These companies which you have referred, the reasons for them was different for being bankrupt or making huge losses. Our inventory is protected by back-to-back selling. We are more into a B2B segment where my inventory is mostly sold and hedged. Either it is sold in the physical forward markets or we hedge it on the overseas exchanges available for the palm and soya. The prices are protected as volatility in commodity prices are protected largely because we are hedging our inventories. Secondly, for the Forex prices front also, same, we hedge all the import payments through a simple forward hedging policies only. There are no derivatives which we use. Hedging mechanism is very strong in our system, which will always protect us from any unlikely movement of commodity or the USD/INR movement.
Understood, madam. Now, madam, another thing is that, madam, since the price of these edible oils are highly volatile, madam, like you mentioned, that 3.5% or so is a sustainable EBITDA margin number. Madam, my question is that whether operating margin is a better way to look at the business or EBITDA per ton? Because if edible oil prices come down, then even if the margin remains the same, which is 3.5%, but due to the realization decline, the absolute EBITDA will fall, even though the margin remains stable. Madam, is that the right way to look at it or is EBITDA per ton right way to look at our business?
Sir, I would prefer that going with the EBITDA per ton is the better way of looking it into the price realizations. But largely, we hedge. We have a proper hedging mechanism where my all purchases are sold by physical forward hedging. That protects us the realization part and all the measures which we have been taking over the years and still progressing with the new CapEx also. I think EBITDA per ton, these are sustainable.
Madam, the thing is that if, let's say, edible oil prices fall by, let's say, 20%, hypothetically, madam, what will be the impact on our EBITDA? Will we be able to hold on to our current EBITDA or our EBITDA will fall by 20%?
Sir, that is what I'm explaining. That my hedging policy, we don't have open inventory levels. We don't keep more than 10%-15% as an open inventory level. Even if the prices fall, if I've sold the inventory in the market, the contracts are to be adhered. Any adverse movements of decline of maybe 20% also, which you assume, may not impact largely because the open inventory is very less. Also we have been hedging on the exchange front. Even if the prices movement is negative, then we can hedge it on the exchanges of CBOT and Malaysia for protecting our margins.
No, madam, I understood that point that we are hedged and we are not speculating and there is back-to-back inventory booking, so there is no inventory loss risk. I understood that, madam. My question is, madam, that the, let's say, last 12 months, our revenue is INR 25,000 crore. So madam, let's say if edible oil prices fall by 20%, so our revenue will decline going forward from INR 25,000 crore to INR 20,000 crore, because the volume is the same. So madam, now the 3.5% margin on INR 25,000 crore is upwards of INR 800 crore and 3.5% margin on INR 20,000 crore revenue will be obviously lesser. So madam, the question is whether, if assuming edible oil prices correcting by 20% price-wise, will our EBITDA margin increase to set off the fall in the absolute EBITDA level?
Right. So EBITDA margin remaining constant, the absolute EBITDA may change, but when the prices fall, we expect higher volumes. So I don't look into declining sales revenue numbers when the prices decline. In fact, the volume growth should be more, so the revenue should be more sustainable also.
So madam, our volumes are already-
I'm so sorry to interrupt, Keshav. You may please rejoin the queue for more questions. Yeah. Thank you. A reminder to all the participants, anyone who wishes to ask a question may press star and one. We'll take the next question from SB Bhaiya. Please go ahead.
Ma'am, congratulations to you for a very nice initiative which you have taken. I think I've been associated with this company during the course of your growth phase, right from 2021 to 2026, so this is one thing which was missing, interaction with the investors community. You have started that and promised to do it once in six months. It is a very welcome step. Actually, coming back to the question, right, you have just said in reply to the first question that your capacities are fully utilized as of now, and you are planning further growth by way of putting some additional capacities in your existing plants.
Ma'am, if you can share with us actually what sort of growth in volumes you are planning for the next at least three years, actually sequentially, that is the first year, second year, and third year, by putting additional capacity and what sort of additional revenues you may be able to generate due to that. Thank you.
Thank you, sir. The capacities which we are adding will be operational only by October 2027, sir. Gradually the capacity at each plant locations will be added. Considering the present commodity prices across India, we expect volume growth of 10% in the next year and continuously, year-on-year also 10% to 15% and so forth.
Okay. That should result into what sort of growth in EBITDA margins or absolute EBITDA. Because your expenditure pattern may not-
Right. EBITDA margins, we expect to remain at a level of 3.5%-4%.
Okay.
Same will be reflected in the absolute numbers of EBITDA.
One more question, actually, your focus on growth, will it be on edible oils or consumer-facing business, or will it be in biodiesel? If you can elaborate on that, please.
Sir, growth drivers remains the B2C segment and the value-added business, which we want to add. Saying that, the volume growth always comes from edible oil. Being a largely populated economy we are, so the growth in the population will also lead to the volume growth in the edible oil business.
Okay. Thank you, ma'am. Thank you.
Thank you. A reminder to all the participants, to ask a question, please press star and one. We will take the next question from the line of Guneet Singh from Counter Cyclical PMS. Please go ahead.
Hello. Am I audible?
Yes. You are audible.
Can you please give us the average realizations per metric ton and EBITDA per metric ton for other key products like soybean oil, palm oil, castor oil, specialty fats, and biodiesels?
Sir, we will not be able to specifically give it. We are into agri-processing, and these are all under the same segment. Average sales realizations for product wise are not possible to provide.
Got it. The average sales realizations in Q2 versus Q1 and Q2 last year, if you can give average, not product wise.
I would say with sales realization, the selling price is linked to the market prices only, and the market prices for all the commodities have increased by 15%-20%.
Got it. This increase in EBITDA margins or EBITDA per ton is attributable to higher commodity prices, right?
Better realizations of the goods.
Got it. When we talk about the B2C segment, if you can share the margins in the B2C segment, and what kind of revenue share are we targeting for the current financial year and for FY 2028? I want to understand how that will improve our margins.
The B2C segment, we are a very new company who has joined the B2C. Saying that, the B2C segment in the medium term, if we look, we being a new entrant, we would be expenses in terms of marketing and branding, advertisements. In the medium term, we do not expect a much higher margin expansion through B2C. But gradually, with the growth in the turnover and with the visibility in the market, we expect a better segment volume increase and margin expansions also in the B2C segment.
Got it.
The growth from 6% which was covered by B2C last year, has already in the H1 has been 8% in the B2C segment, which we expect to expand gradually.
Got it. And currently the margins are similar to the consolidated 3.5% for B2C?
Yeah, those are, sir, more or less in the line.
Got it. What kind of marketing spends are we targeting for the B2C segments? If you can quantify annual marketing spends.
We have earmarked about less than INR 25 crores mostly for the B2C segment. We will be making expenses only gradually, looking at how the market is responding and which market is better to have a growth in B2C.
Got it. How much were they in FY 2026?
That number would be quite specific, sir. We can discuss that maybe after the year completion.
Got it. If we talk about this stock in trade, purchase of traded goods has increased from INR 491 crores in Q1 to INR 2,000 crores in Q2. Can you explain what is this relating to?
Right, sir. We are mostly import dependent. About 80% is my imported raw material procurement. Saying that, we have four plant locations, and being import commodities, the vessels are to be available at a very larger quantity than the requirement maybe at the individual plant level. We sell off some of the quantities outrightly to manage our inventories at the plant locations, and that's the reason why there is a trade. Saying that, the stock in trade sales are largely in the range of 10%-20%. They do not go beyond 20%. The number may be looking larger. Sales is hardly less than 15% also in the instance is comparable to the last instance also.
Got it. Finally, we are doing some backward integration palm oil plantation, you have mentioned in the PPT. What is the current scale of this and how do we scale it up, palm oil plantation, and how will this impact our margins of procurement or inventory levels?
Sir, in palm plantations, once the seeds are sown, it takes about four to five years for the first fruit bunches to come up. This has been only the second year wherein we are expanding. It will still take time. We are slowly and gradually want to increase the spend of the hectares available for us. That is where we are focusing. Currently, those locations are Andhra Pradesh, but any benefits would be only available after a span of three to four years. Today it is a very new entrance, but at a longer tenure, this will be beneficial to the company.
Got it. So in three to four years, if we say what percentage of imports will be substituted by this or what percentage of our raw material consumption would come from this initiative?
It would all depend on how much hectares are allotted by the government to us. As of today, if I would say how many hectares I have developed, basis on that it is hardly 1,000 metric tons per annum, which is very nominal, not even 1% of my requirement. But this is a strategy which the government is promoting. We also being Indian company, we want to promote the government, and it would slowly and gradually reduce the import dependency and outflow of the USD also from the country, if this is being promoted well. That is where the initiative goes.
Got it. Thank you very much for answering my questions, and I wish you all the best.
Thank you, sir.
Thank you. Ladies and gentlemen, to ask a question, please press star and one. Next question is from the line of Bharat Mehta. Please go ahead.
Hi. I had a couple of questions. First one being, what is the company's market share in the key regional markets and product categories?
Sorry, sir. Which segment you are mentioning?
I am mentioning about the edible oils.
Edible oil. Okay. Sir, market share of the company stands about 8% in the edible oil.
Around 8%?
Right, sir.
Okay. Also wanted to check what edible oil volume growth do we expect from the industry and the company over the next coming years? Just wanted to see the overall picture of the market and how we are doing as well.
For the edible oil growth, we expect a volume growth of at least 10% in the coming year, and the growth should remain constant by 10%-15% every year we can add on.
Okay.
The population of India already we have a per capita consumption of 18-19 kilos. That will keep on adding the demand requirement of the edible oil.
Understood. Also on the biodiesel business, what would be the sustainable EBITDA margin or maybe EBITDA per ton that we will look at?
For the biodiesel, the margins are marginally better than the existing product mix. But we-
Yeah. Approximately how much delta would it have from the rest?
How much, sorry? Can you pardon?
Delta would there be, in terms of percentage terms, how much delta would it be from the rest?
Biodiesel is covering about, say, 5% of the sales revenue, contributing 5% to the topline by H1 September 2026.
Okay. The assumption that biodiesel business would be employing more working capital as compared to edible oil, will that assumption be right?
Sir, biodiesel we are exporting, so it is not about working capital requirement. This is being exported under bulk consignments. For a particular time, since the bulk consignment has to go as an export, maybe at a particular time could be a better, higher inventory of biodiesel. That is, the flowing orders would be there.
Understood. It will go as per that cycle.
Yes.
If Gandhidham facility reaches the optimum utilization, does the management plan to expand the biodiesel capacity?
Gandhidham plant has attained the optimum capacity, and then what about biodiesel?
Would we try to expand that biodiesel capacity?
Sir, we have started the capacity only, full-fledged operations have started only in the Q1 of this financial year. Expanding the capacity today or maybe not, that is not the correct time to decide. We still would require and explore some of the other capacities and the broader market demand. Currently, we are not looking into it. We may explore, sir.
Understood. Okay. Thank you so much. That is it from my side. Best of luck. Thanks.
Thank you, sir.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two only. Should you have a follow-up question, please rejoin the queue. We will take the next question from the line of Dhiraj Sachdev from Orbil Capital. Please go ahead.
Yeah, hi. You see, in terms of domestic sourcing like oilseeds, castor, mustard seeds, groundnut or sesame, and even rice bran, which are sourced domestically, and you may be obviously procuring it from agricultural markets like APMCs across Gujarat, Rajasthan. Will the lesser acreage this time or lack of, or deficit monsoon impact our sourcing cost?
Sir, castor, we have seed crushing plants for castor, mustard, and soya. Castor is a product which is grown largely in Gujarat. 80% of the India production is in Gujarat. Sourcing for castor has been round the year. Saying that, mustard and soya seeds, those depends on the price parity, the seasonal impact on the prices, and how the end market of the product would fetch good, better margins. If we do not understand that the margins or the parity is available in the market, we may not go ahead during the season for seed crushing facilities. Because soya is available through imports also, crude soya oil, there is no point in running the operating plant for the seed crushing facilities of soya. But that all depends on yearly basis, depending on the seasonality of the product, time, prices of the product.
My question is, this time the lower deficit or deficit monsoon will not impact the cost of sourcing going forward?
The cost of sourcing going forward, it would impact because the prices of the soya has already been quite higher in the markets because of the lower rainfalls. Then we may only assume not to go ahead with seed crushing facilities for soya maybe this year, but it would all depend on the prices. In fact, again, after, say, in the November month, how the prices are moved, then we may decide on whether how to function the manufacturing facility for the seed crushing.
Okay. You are confident that despite whatever with the monsoon, we have tangibility in terms of seed and according to the season-
We have full confidence, sir.
Will you be able-
Yes, sir. We have oils in refining, edible oils also, different oils. Depending on the prices and the price parity, we look forward to where to deploy the resources in the seed crushing facilities, in the refining oil. Which oil, which seed, that is all dependent on the price parity functions only. There are no compulsions in terms of we have to produce this much. We move as per the market demand and the market prices.
In terms of the imported raw material, where duty reduction, is there any impact?
That is a positive impact, the duty. The Indian prices, the government has supported the duty. Reduction is there to support Indian end users, customers, and that's a positive impact on the company and the industry at large.
How much is imported raw material for us now?
We are closely importing 75%-80% of my raw material requirement.
Rupee also you are able to hedge it, I mean, because given the import
I am so sorry to interrupt, Dhiraj. You may please rejoin the queue for follow-up questions.
Sure. Thank you so much.
Thank you. Next question is from the line of Keshav Garg from Counter Cyclical PMS. Please go ahead.
Madam, I wanted to understand that even though it seems we are net debt-free, but still there is a huge interest cost that we are paying. Madam, can you clarify on that account?
Sir, we are largely an import-dependent for edible oil as a country, and in our company also, we are largely importing goods. These interest obligations, interest expenses are meant towards the LCs, import LCs which we open and the negotiations of those LCs. It is not about the long-term debt. This is my routine working capital requirement to support my operations.
Understood. Madam, wanted to understand that basically, I understand we have 20 lakh MTPA of refining capacity, and we are expanding it by 8 lakh MTPA. Is that understanding correct?
Right, sir.
Madam, by when will this 8 lakh ton come on stream? Since you mentioned that we are already operating at full capacity, no volume growth is possible in this financial year. Madam, is it safe to say that we refined and sold 5 lakh ton in Q2?
The new operational capacities will be available only from the next year onwards, and that also in a staggered manner from April to maybe, say, October end of 2027. Running at a full optimum capacity means running all the plants at more than 80% capacity levels because some of the other, like my two of the plants are quite old, so those require a turnaround and downtime also. Saying that about more than 80% capacity across all plant locations we are running.
Okay, madam. One request. Kindly give the volume, sales volume number and the overall realization per ton number in your investor presentation in the future so that it will increase our understanding of the company.
About your volume numbers, we will think over it and maybe come back to you at a later stage.
Thank you, ma'am.
Thank you. Next question is from the line of Prashant. Please go ahead.
Hello, is my voice audible?
Yes, you are audible.
Yeah. Thanks for the opportunity. My first question was, in terms of our non-retail customers, do we have any fixed price contracts of extended duration?
Sir, there are no normally extended duration, but though all the contracts are on a fixed price only. Majorly, the contracts are at a fixed price contract.
No, fixed price is fine, but are there, I mean, like a duration in the sense that with a fixed price contract, we are exposed to price volatility. For those fixed price contracts, how do we hedge? Are these back-to-back hedged for the same tenure?
Sir, in the fixed price contract, those are like a forward-looking contract. These are based on my purchases and then the sales are executed, the sales contract. Actually, the fixed prices will remove any volatility in the market. If the prices decline or on the upward trend also, we are largely protected because we have already contracted at a fixed price. Those cover my cost and my operational cost, my profit margins, everything.
Okay. Both the tenure and the price and every way, I mean, the company is covered.
Right, sir.
Okay. You just mentioned that, coming to the previous question about the interest cost, that the interest cost is largely working capital related cost. For the first half, I think the interest cost is INR 44 plus INR 66, INR 110 crores, whereas the borrowing is roughly our average borrowing, 31st March and 30th September is around INR 600 crores. So two parts to this. What would be our average borrowing cost in rate percentage rate terms? How much of this INR 110 crores is Ind AS 116, if any? Hello?
So right, sir. In terms of exact numbers, I won't be able to share with you. But largely it is the INR 600 crores which you are mentioning, those are my long-term debt plus my export fund-based credits available from the bank. We also have LC businesses. The LCs are shown under the trade creditors, which reflects under the creditors. The finance cost for negotiating the import LCs to make the payments to the import suppliers, those costs is reflected under the finance cost.
Okay. What would be your blended borrowing rate? If you can give a range, I mean, not the exact number.
That would be approximately 8%, 8.5%.
Okay. That is all from my side and wish you all the best. Thank you.
Thank you.
Thank you. Ladies and gentlemen, that concludes our question and answer session. I now hand the conference back to management for closing comments.
On behalf of the entire management team, I would like to thank our employees, customers, suppliers, distributors, business partners, bankers, and shareholders for their continued support and trust. As this is our first earnings conference call, we particularly appreciate the opportunity to engage directly with our shareholders, analysts, and investors. For any further questions or follow-ups, please feel free to reach out to me or our investor relations partner, EY. The team will be happy to connect with you offline and assist with any additional information you may require. Thank you.
Thank you very much, ma'am. On behalf of Gokul Agro Resources Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.