Zuari Industries reports jaw-dropping 159% EBITDA surge in Q1 FY25 – See what’s behind the growth

Zuari Industries Limited (BSE: 500780, NSE: ZUARIIND), the flagship entity of the Adventz Group, has unveiled robust financial results for the quarter ended June 30, 2024. The company has showcased impressive growth in revenue and operational performance, underscoring its strong market position and strategic initiatives.

Significant Revenue and EBITDA Growth

Zuari Industries reported a notable 30% increase in standalone revenue from operations, which surged to Rs. 214.5 crore for Q1 FY25 compared to Rs. 164.6 crore in Q1 FY24. This growth reflects the company’s successful strategies in its core business sectors, particularly in the Sugar, Power, and Ethanol (SPE) division. The standalone Operating EBITDA witnessed an exceptional rise of 159%, reaching Rs. 23.5 crore from Rs. 9.1 crore in the previous quarter.

Enhanced Operational Performance in the SPE Division

The SPE division of Zuari Industries demonstrated remarkable improvements, with sugar recovery rising to 12.47% from 9.30% in Q1 FY24. This increase highlights the division’s effective operational efficiencies and advances in sugar processing technology. Ethanol production also saw a substantial boost, reaching 8,965 KL compared to 6,570 KL in the previous quarter. Sugar sales increased by 75,000 quintals, and ethanol sales grew by 2,600 KL, reflecting strong demand and efficient production capabilities.

Consolidated Financial Overview and Strategic Developments

On a consolidated basis, Zuari Industries reported a revenue of Rs. 242 crore for Q1 FY25, marking a 14.8% decrease from the previous fiscal year. The consolidated profit before tax (PBT) before exceptional items improved to Rs. (34.28) crore from Rs. (45.58) crore in Q1 FY24. Similarly, the consolidated profit after tax (PAT) stood at Rs. (33.60) crore, up from Rs. (47.54) crore. This reflects the company’s strategic focus on improving profitability despite a decrease in consolidated revenue.

The Investment Services segment, including Zuari Finserv and Zuari Insurance Broking, reported an impressive EBITDA increase of 99.7%, amounting to Rs. 3.58 crore. This significant growth underscores the sector’s strong performance and the company’s successful efforts in reducing borrowing costs by 20 basis points quarter-on-quarter.

Strategic Initiatives and Future Outlook

Zuari Industries is advancing its strategic initiatives with the ongoing construction of a flagship 180 KLPD grain-based distillery under the joint venture ZEBPL. Scheduled for completion by mid-2025, this project represents a crucial investment in the company’s bioenergy and green fuel production capabilities.

The company has also been focusing on its real estate and infrastructure projects. Despite facing delays in land monetization, Zuari Industries remains committed to leveraging its extensive land holdings and real estate ventures, including premium properties in Goa and Dubai.

Expert Opinions and Strategic Focus

Athar Shahab, Managing Director of Zuari Industries Limited, highlighted the company’s achievements during the quarter. Shahab noted the significant improvements in the Sugar, Power, and Ethanol segments, despite challenges in sugar cane yield and availability. He emphasized that Zuari Industries remains committed to growing its key operating businesses and strategic investments, including the ongoing repair and maintenance of the SPE division and efforts to monetize land assets. Shahab also stressed the importance of reducing high-cost borrowings and strategically allocating capital to enhance operational performance.

Zuari Industries, part of the diversified Adventz Group, operates across multiple sectors, including agrochemicals, engineering and infrastructure, real estate, and services. The company’s Sugar, Power & Ethanol division is known for its focus on green energy and biofuels. Its real estate division boasts premium properties and extensive land holdings, contributing significantly to its revenue. Zuari Industries also plays a vital role in India’s agrochemical sector and collaborates with Indian Railways on various projects.