MODINATUR - Modi Naturals

📊 NSE: MODINATUR 🏢 Other Agricultural Products 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 2.7% YoY to INR 302.0 Cr in H1 FY26. The Ethanol division is the primary growth engine, while the Bulk Business Division achieved an EBITDA turnaround to INR 1.2 Cr in H1 FY26 from a loss of INR 1.5 Cr YoY. The Consumer Division is targeting a long-term revenue of INR 500 Cr.

Geographic Revenue Split

Not disclosed in available documents; operations are primarily focused on the Indian domestic market through its consumer and ethanol divisions.

Profitability Margins

Gross Profit Margin improved to 26.2% in H1 FY26 from 23.7% YoY. PAT Margin increased to 6.8% in H1 FY26 compared to 5.1% in H1 FY25, driven by better operational alignment and the high-margin ethanol segment.

EBITDA Margin

EBITDA Margin stood at 10.9% for H1 FY26, a significant increase from 9.0% in H1 FY25. Absolute EBITDA grew 24.0% YoY to INR 33.0 Cr, reflecting improved efficiency in the bulk segment and robust ethanol performance.

Capital Expenditure

The company is executing a major debt-funded expansion of its ethanol plant (Modi Biotech) to increase capacity by 180 KLPD. Total project completion is expected by December 2025, bringing total capacity to 310 KLPD.

Credit Rating & Borrowing

Assigned IVR BBB-/Stable for long-term and IVR A3 for short-term facilities. Finance costs decreased 17% YoY to INR 4.4 Cr in H1 FY26 due to improved debt management, with a Debt/Equity ratio of 1.07x.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include crude edible oils for the consumer/bulk divisions and feedstocks (grains/rice) for ethanol production. Raw material costs (COGS) represented 73.8% of revenue in H1 FY26 (INR 222.8 Cr).

Import Sources

Not disclosed in available documents, though the edible oil industry typically relies on imports for crude oil and domestic sourcing for grains.

Capacity Expansion

Current ethanol capacity is 130 KLPD; expanding to 310 KLPD with an additional 180 KLPD unit expected to commence operations by December 2025.

Raw Material Costs

COGS as a percentage of revenue decreased from 76.3% in H1 FY25 to 73.8% in H1 FY26, reflecting better procurement planning and a strategic transition to a lower-inventory operating model.

Manufacturing Efficiency

ROCE improved significantly to 19.1% in H1 FY26 from 11.5% in H1 FY25, indicating higher efficiency in utilizing capital for production following the stabilization of the ethanol plant.

📈 Strategic Growth

Expected Growth Rate

28-32%

Growth Strategy

Growth will be achieved by more than doubling ethanol capacity to 310 KLPD by Dec '25, participating in new tender rounds for ethanol, and scaling the FMCG business through a 30% increase in advertising spend (INR 9.15 Cr in H1 FY26) to reach a segment target of INR 500 Cr.

Products & Services

Edible oils, food products, ethanol, and ethanol byproducts.

Brand Portfolio

Branded consumer products (including oils and niche food categories) under the Consumer Division.

New Products/Services

Launch of new products in niche food categories and expansion of assortment on quick commerce and modern trade platforms.

Market Expansion

Expansion of distribution through quick commerce and hiring a new brand ambassador to increase market penetration for the branded division.

🌍 External Factors

Industry Trends

The ethanol industry is benefiting from favorable government policy support for blending; the company expects the industry to move toward incremental capacity additions following a period of rapid augmentation.

Competitive Landscape

Intense competition in the edible oil industry leads to thin margins; the company is pivoting toward branded FMCG and ethanol to escape this commodity trap.

Competitive Moat

Moat is built on experienced promoters (4 decades of experience), a well-established supply chain, and a first-mover advantage in grain-based ethanol in its region.

Macro Economic Sensitivity

Highly sensitive to commodity price fluctuations in the edible oil market and government ethanol blending policies.

Consumer Behavior

Shift toward quick commerce and modern trade for food products, prompting the company to increase A&P spend to 10% of revenue.

Geopolitical Risks

Exposure to international edible oil price volatility which affects the input costs for the bulk and consumer divisions.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to government ethanol blending mandates and pricing, as well as food safety standards for the consumer division.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 18.6% (INR 4.7 Cr tax on INR 25.3 Cr PBT).

Legal Contingencies

The auditor's report indicates no material uncertainty regarding the company's ability to meet liabilities and no modified opinions from outgoing auditors.

⚠️ Risk Analysis

Key Uncertainties

Project execution and stabilization risk for the 180 KLPD ethanol expansion; risk of decline in ethanol offtake prices which could impact the subsidiary's profitability.