REGAAL - Regaal Resources

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

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income grew 41.9% YoY in H1 FY26 to INR 566.59 Cr. Segmental revenue mix for H1 FY26 includes Native Maize Starch at 47.3% (down from 59.3% in FY25), Co-products at 19.9% (down from 21.8% in FY25), Value-added products at 1.2% (down from 1.6% in FY25), and Modified Starch at 0.6% (up from 0.5% in FY25).

Geographic Revenue Split

Export sales contributed INR 65.48 Cr (7.2% of revenue) in FY25, up from INR 42.89 Cr (7.2%) in FY24. In H1 FY26, exports were INR 22.24 Cr, representing 3.9% of total revenue. The majority of revenue is derived from domestic markets in India, specifically leveraging the Bihar production hub.

Profitability Margins

Profit After Tax (PAT) for Q2 FY26 was INR 16.71 Cr, a 27.7% YoY increase. PAT margin for H1 FY26 stood at 4.5%, down 101 bps from 5.6% in H1 FY25. Value-Add Margin contracted by 713 bps YoY to 24.5% in Q2 FY26 due to muted export demand and lower domestic starch prices.

EBITDA Margin

Operating EBITDA Margin was 10.9% in Q2 FY26, a contraction of 425 bps from 15.2% in Q2 FY25. For FY25, the margin was 12.38%. The decline is attributed to higher maize procurement costs during non-peak seasons and market volatility.

Capital Expenditure

The company is executing a consolidated capex of approximately INR 450 Cr over FY2025-26. This includes establishing a new 48 TPD Liquid Glucose capacity and expanding total milling capacity to 1,650 TPD by the end of FY26.

Credit Rating & Borrowing

Credit rating was upgraded to 'Crisil A-/Stable' from 'Crisil BBB+/Positive' in November 2025. Interest coverage ratio improved to 3.05x in FY25 from 2.49x in FY24. Net Debt/Operating EBITDA stood at 4.0x as of September 2025.

⚙️ Operational Drivers

Raw Materials

Maize is the primary raw material, accounting for approximately 70% of the total operating income. Other inputs include rice (diverted for ethanol) which impacts maize availability and pricing.

Import Sources

Raw materials are primarily sourced domestically from Bihar, which is one of the top three maize-cultivating states in India. The plant is strategically located in Kishanganj to be near major maize markets.

Key Suppliers

Procurement is done directly from farmers in close proximity to the plant during peak seasons and through a dealer distribution network to ensure steady supply.

Capacity Expansion

Current installed capacity is 825 TPD as of September 2025 (scaled from 180 TPD in 2018). Planned expansion will double this to 1,650 TPD by the end of FY26, including new lines for Liquid Glucose and Maltodextrin.

Raw Material Costs

Maize costs represent 70% of revenue. In FY23, margins fell to 8.42% due to rising maize prices, recovering to 12.38% in FY25 as prices cooled. Procurement strategies include 65,000 MT of in-house storage in silos to lower logistics and seasonal costs.

Manufacturing Efficiency

Fixed Asset Turnover improved to 3.1x in September 2025 from 2.5x in March 2025. The company maintains a cost advantage over non-integrated peers through its integrated power and storage setup.

Logistics & Distribution

Strategic location in the Kishanganj export corridor reduces transportation costs for both domestic distribution and international shipments to neighboring regions.

📈 Strategic Growth

Expected Growth Rate

36.9%

Growth Strategy

Growth is driven by doubling milling capacity to 1,650 TPD by Q4 FY26 and diversifying into high-margin derivatives like Liquid Glucose, Maltodextrin Powder, and Dextrose. The company aims to leverage its 'Star Export House' status to re-enter reopening global markets.

Products & Services

Native Maize Starch, Modified Starch, Liquid Glucose (LG), Maltodextrin Powder (MDP), Dextrose Monohydrate (DMH), Dextrose Anhydrous (DAH), and various co-products.

Brand Portfolio

REGAAL

New Products/Services

New value-added products including Liquid Glucose (48 TPD) and Maltodextrin Powder are expected to be operational from H2 FY27, targeting higher margin F&B and Pharma segments.

Market Expansion

Expansion focuses on the F&B and FMCG industries. The company is leveraging its location near export corridors to increase its footprint in international markets as global demand for starch firms up.

Market Share & Ranking

Regaal is described as one of the fastest-growing wet maize milling companies in India, though specific market share percentage is not disclosed.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward value-added maize derivatives. Current trends include the diversion of maize and rice to ethanol production, which increases raw material competition but supports overall grain demand.

Competitive Landscape

Highly consolidated industry with significant competition among the top 5-6 players for large institutional clients in the FMCG and Pharma sectors.

Competitive Moat

Moat is built on cost leadership through a strategic Bihar location (low procurement/logistics), integrated 7.1 MW power plant, and large-scale 65,000 MT storage silos. These are sustainable due to the high capital intensity of integrated setups.

Macro Economic Sensitivity

Highly sensitive to agricultural output and monsoon patterns affecting maize yields. Profitability is susceptible to global starch demand-supply dynamics which impact domestic pricing.

Consumer Behavior

Rising demand for processed foods and FMCG products is driving the need for maize-based thickeners, sweeteners, and stabilizers.

Geopolitical Risks

Export markets (7.2% of FY25 revenue) are subject to international trade conditions; recent muted demand in starch exports pressured domestic prices in Q2 FY26.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to government-implemented Minimum Support Prices (MSP) for maize and Food Corporation of India (FCI) policies regarding rice release for ethanol production.