Bcl Industries Limited (BCLIND) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the BCL Industry Limited Q1 F527 Earnings Conference Call hosted by Interred Equities. As a reminder, all participant lines will be in the listener-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance, give the conference call, please signal an operator by pressing star, then zero on your touch-down phone. This conference call will contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of feature performance and involve risk and uncertainties that are difficult to predict. Please note that this conference is being recorded. I now hand the conference over to Mr. Nathya Namaste. Thank you and over to you, sir.

Thank you.

I would like to thank the management for giving us this opportunity to host their conference call today. From BCL Industries Management, we have Mr. Kushal Mittal, GMD, Mr. Varun Gupta, CEO. Also from Go India Advisors, their IR, we have Riddisha. I would now like to invite Mr. Kushal to initiate the proceedings with his opening remarks, post which we shall open the floor for a Q&A session. Thank you, and over to you, sir.

Thank you, Nitin.

Good afternoon, everyone, and a warm welcome to BCL Industries Ltd. Q1-SY27 Earnings Conference Call. I thank you for joining us today. I would like to begin by providing some recent updates regarding the company. It is unfortunate to report that on 19th June, 2026, a fire incident occurred at one of our ethanol storage tanks at our Bhatinda Punjab distillery. However, on the positive side, there were no injuries to any employees, workers, or personnel, and the fire was fully brought under control on the same day. This resulted in a temporary shutdown of our 200-KLPD ethanol plant. I want to reassure investors that, based on our assessment, full recovery of the resulting losses to insurance claims is considered virtually certain, and no net financial loss has been recognized in this result. Against this backdrop, BCL Industries has commenced FY27 on a steady note. Further centering our district segment, on 30th June, 2026, we completed the acquisition of the remaining 25% stake in Swakshara District Limited, making the 350-KLPD district in Kharagpur, West Bengal, a wholly-owned subsidiary of BCL Industries Limited. I am pleased to say that we have concluded this acquisition well within the stipulated timelines. Further, the newly added 150 K LPD This unit commercial trials began at the end of June 2026 and was commercially successfully commissioned in the first half of July. The revenue impact arising from the temporary shutdown of the 200-KLPD unit is expected to be substantially mitigated by the ramp-up in production from the newly commissioned 150-KLPD unit at Batenda. While realizations of ENA and ethanol supplied to private buyers remain under pressure due to oversupply, with ENA realizations declining to rupees 58 per litre in quarter 1 FY27 from rupees 70 a litre in quarter 1 FY26. The company continues to actively compete in the market to secure orders and maintain 100% capacity utilization. Despite the challenging environment, the distillery segment margin improved to 12.4%, supported by the operational efficiencies and the vertical integration that has been due to the maize oil extraction unit and our maize oil refinery. Our 115 TPH fatty straw boiler continues to meet 100% of distillery steam and power requirements. Our country liquor business continued to deliver strong momentum during the quarter. We sold 6,37,993 boxes in Q1 FY27, with our volumes increasing 42% quarter-on-quarter and 46% year-on-year. The strong growth reflects continued traction of our country liquor portfolio. We launched Punjab Raspberry in Q4, which has great, good consumer acceptance. Building on this momentum, we have launched Jamun Vodka in July 2026, further expanding our portfolio and strengthening our presence in the country liquor business. As previously communicated, we have completed our exit from the packaged oil business, including the formal closure of the oil in Manaspati unit at a previous Bhirinda location. This quarter results include Rs. 199.47 lakhs, representing profit on the sale of fixed assets, compromising building materials and scrap from our dismantled unit. We continue to operate our soft oil refinery and trading business, which remains part of our legacy operations. We have also commissioned our mazel extraction unit at Swaksha, a fully backward integrated facility that enables us to capture greater value across the value chain. Now, moving on to our financial performance for the quarter. Consolidated revenues from operations for Q1 FY27 stood at 623 crores compared to Rs. 820 crores in Q1 FY26. The reduction in revenue is primarily due to the closure of our edible oil unit and exit from the package oil business. EBITDA for the quarter stood at Rs. 66 crores, up 17% year-on-year, with EBITDA margin improving sharply by 370 basis points from 10.5% to 10.5% from 6.8% in Q1 FY26. BAT for the quarter came at Rs.36, up 6% year-on-year, with BAT margin improving to 5.7% from 4.1% in Q1 FY26. On a segmental basis, our discrete business reported an EBITDA margin of 12.41% in Q1 FY27, up from 11.8% in Q4 FY26, and 10% in Q1 FY26. ENA volumes grew sharply to 19,376 KL in Q1 from 7,960 KL in Q1 at Y26, reflecting continued diversion towards ENA amid the competitive ethanol environment, while the ethanol volumes stood at 37,787 KL for the quarter. To conclude, BCL Industries is strongly positioned to capture growth across our core distillery and refinery divisions. As we execute our strategic initiatives, we remain fully committed to driving long-term sustainable value for our shareholders. Thank you for your time and continued support.

We would now like to open the floor for questions.

Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset 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 Deepesh Sanchiti with Marnia Finance. Please go ahead.

Hello, Kushalji. Am I audible? Hi.

Yes. Yes, you are.

Yeah. Okay. At what price are we selling? Isn't it all to private players?

It's not all to private players. It's primarily Reliance. And I think the average price is Rs. 58 ex-factory. Exactly.

And that is from FCI rice or that is from mail?

No. So, the private ethanol procurers, they don't have the FCI rice. So, that's mostly from damaged food grains.

Okay. And at what price are we getting the damaged food grains? Because then we lose out that FCI rice advantage, right?

No, see, FTA race is... Allocated against the allocation that we received from the government OMCs. So 40% of our allocation from the government OMCs, we had to procure FCI and then supply ethanol against the same. So for Reliance, you know, we can procure grain from the market. And mostly besides FCI, our plant was running on maize. So, for previous quarter, I think the procurement cost was around 22 to 23 rupees a kg. Thank you.

And what is the reason of the fire? Have we come to know about the reason of the fire? And how are we working on avoiding that in near future for the rest of the plants?

See, we were quite grateful that, you know, there was no loss of life or even an injury. All the systems were working in place. Since we are dealing with an explosive item like ethanol, I think the cause of fire was maybe a static charge that was created by something, you know, maybe from the cloth of a person working nearby. So, moving forward, the company has set up more... We have more facilities to prevent such an accident, but it was an unfortunate incident that occurred and is quite rare.

True, true.

Okay. And for the achievement of the E20 blending target, what is our visibility on demand of grain-based ethanol going forward, and how are we thinking of the pathway about beyond E20?

See, the demand for grain ethanol next year should improve slightly because the ethanol from sugarcane will most likely not be allowed and only molasses-based ethanol will be there. And you see, the growth factors going forward for the ethanol industry are, of course, flex fuel engines, which is a long-term play. And besides this, we are quite hopeful on a good isobutanol policy coming in the near future as well. And sustainable aviation fuel also would be another value addition for the ethanol industry. And also we are seeing from the government of India that now ethanol can be used as a source of cooking, because ethanol is a very clean fuel. Even when it burns inside our homes, it's even cleaner than the PNG. So, it's a very good source for cooking energy as well. So, I think there are many avenues for demand creation in the future, but it will take some time.

Right. And any update on Goyal Distillery or BioCNG or even the Biodiesel?

Hello. Hello. Operator, am I audible?

Yes, sir, audible.

Yes, so, but BIOS CNG, I think there's a very favorable policy that has just been announced a few days ago, and the company is actively looking into the sector to invest in. Still, the technology from Paddy Store is It's a little tricky, mainly the selling of the byproduct that is made in the process. And for biodiesel, again, the prices are not as favorable, so the company is not manufacturing any biodiesel.

And about Goel digitally, the 250k LPD, which we plan to install?

See, the project for now, we are holding on to it. We want to see how the industry further evolves in the coming months, and then make a decision.

Right. So, if I could just understand what is the unit economics, just as in what is the selling price, what is the cost price, and, you know, what is the EBITDA in terms of our ethanol to the government, ethanol to private players, and ENA. Because since the E&A prices have reduced and E&A was our biggest, you know, go-to market, especially when ethanol from the government demand was less, what is the unit economics and what is the EBITDA basically on, if you can just mention the EBITDA also is fine on each product.

See, it's different. So FCI rice, ethanol that's sold to the government, is, you know, is not very profitable. It's almost at cost. But there's a 40% mandate. But the maize-based ethanol that is sold to the government, to MCs, is quite profitable. And ENA and ethanol that is sold to private players in the market, they're about the same. You know, the margins on that is about the same. So on an average, this is our about 12%.

So per litre, I can assume that on maize-based ethanol, as well as on ENA, even at these prices, we are getting about 9 to 10 rupees per litre.

Yeah, on an average, on an average.

On an average. I'm not including the FCI-based signal. I'm just saying about the AMAZE-based signal and ENA. Yes, yes, yes, correct. Correct. Great, great, great. Congratulations again. And if there are any other questions, I'll join back. Thank you. Thank you.

Thank you. The next question comes from the line of Abhishek Kale, an individual investor. Please go ahead.

Kushar sir, am I audible?

Anji, yes. Good afternoon.

Good afternoon. Kushar sir, four days back, Mr. Suresh Gopi has given a written reply in the parliament that diesel and ethanol mixing, because of ethanol's lower flashpoint, they are not considering this blending. So, I think in one of your updates, you said that the isobutanol lending is being actively pursued. So, you may want to just visit that. There is an article in Hindu as well, and there is a...

No, there is a difference in the two statements. One is whether ethanol can directly be blended into diesel, which was rightly clarified that there's a difference in the flashpoint. Now, ethanol and isobutanol are two different products. Ethanol can be used to manufacture isobutanol, and I don't think there's any statement that has been made which says that even isobutanol is not...

Isobutanol can be blended with diesel. Right, you are right. I was just trying to understand whether that is also being shelved or not. So, thanks for clarifying that. Sir, second question, this whole E20 related problems. Right? Which is being widely, I mean, it's odd in the media. I don't know how much of it has meat or whatever. But it seems like the government is on a back foot when it comes to the E22 or E27 kind of mandates which they are pursuing. Right? So, I mean, the reason for my question is... Do we see that the ethanol capacity off-take will increase unless and until we have a huge stock of flexural vehicles coming into the market? Till that point in time, do you see that the off-take is going to increase any further?

Just a visibility kind of a question.

See, firstly, when talking about isobutanol,

I think there's still active trials and testing going on for a policy to be introduced. So, I don't think that has been shelved. There's a big difference in these two statements that were made. Again, I say, ethanol in diesel is very different from isobutanol in diesel. So, yes. When you talk about government being on the back foot or not, see, that I can't comment on. I can speak on behalf of my company, oil, you know, even the industry. E20 has been going on for a year and a half. If, you know, there was any major damage to vehicles, that would have showed in the 18 months since when E20, or more than 18 months since when E20 has been going to be. Pumps and to the consumers. Yes, demand creation will happen from a few places. Maybe due to the pushback, further blending could be delayed or shelved. I'm not sure about it. But besides that, I think biofuel industry as a whole has a very, very good future. Food grain is still at record amount. We don't have enough space for this year's stock as well. Farmer income is a must for any government. So I don't think this is a policy that will be derailed for very long. There will be demand creation from isobutanol. There will be demand creation from SAS. And I think in the coming months... We'll see quite a few launches of flexible vehicles, and we'll see E87 being available at even more pumps. So I think demand creation will happen. The pace at which it was happening earlier will slow down. That is realistic, but I think there will be good demand coming in the future times.

Is there one last question on biodiesel, if I may please?

Yes, please.

Yeah. So, sir, as you have seen, biodiesel, I mean, somehow the government, the tenders, right? There is not enough of biodiesel being blended. Is there any specific reason why we are not seeing that happening? Because, I mean, we are also planning for a 75 KLPD unit at Swaksha. Am I right in saying that?

No, see, that project, that project has been brought on hold for now because biodiesel rates are not as enumerative. And I think the reason behind that, that a lot of the raw materials for the biodiesel industry, you know, they're... Their raw material, raw material for the raw material, is imported. So the government, I think, maybe realizes that because the biofuel sector, the main aim for biofuel sector is to improve farmers' income, which it has done in the past few years very successfully. Now, since a lot of the raw material, to the raw material for biodiesel sector is imported, the government has not focused on it as much. And that's why the isobutanol, you know, is being tested. Because the government wants to promote indigenous raw materials, which will not only help the industry save the forex, but most importantly, improve farmer income.

Right. Sir, if I may continue with this, would it be okay? The way we, if I understand correctly, we extract maize oil, which was our sole purpose of setting up the biodiesel unit, and we had plans to consume it for making biodiesel. So, I mean, that is something we are not importing, it's locally produced. So then, why probably we are not getting the tenders? Is that just because of the pricing or what would be the reason? I'm just trying to understand it from our context.

Prices for biodiesel are very, very low, so that's fine. Okay.

Okay. Okay. But, sir, if I may, have we redid this? I mean, you must have surely redid this to the ministry or the OMCs or the partners whom we are working with. Is there a feedback coming from their side as government is considering upping the price? Just to ensure, I mean, we are talking about security, right? Energy security. So, this is something we are not imputing. So, is that a consideration that is being given?

Yeah, I'm not a part of the government, so I can't comment on the…

I'm just saying that, have you read it just to the partners that we are working with in terms of procurement or that we don't have a…

Of course, the concerns have been raised by the association and different players in the industry, but what is happening inside, how will I be able to tell?

Right. That's a fair point from your side. Thanks for clarifying this. Thanks for clarifying.

Thank you. Our next question comes from the line of Gautam Karwa, an individual investor. Please go ahead.

Hello. Yes, are you audible? Please go ahead.

Mr. Gautam, your line has been unmuted. Please go ahead with a question.

Hello, are you coming?

Yes, sir.

Mr. Gautam, you are not audible.

Mr. Gautam, I would request you to please rejoin the queue. The next question comes from the line of Bavish, an individual investor. Please go ahead.

Good afternoon, Mr. Nettel. Thank you for the opportunity and good set of results. My first question is regarding the IMFL segment. So, regarding the strategic timeline to enter the high margin IMFL segment over the next two years, management has previously indicated plans to construct a mulch plant. So could you please provide an update on whether this project is on track, when is the construction formally scheduled to begin, and what is the total estimated capex for setting up this?

Good afternoon, yes, thank you.

So, the malt unit is still under, you know, consideration and conceptualization. I think the first industry... First step should be entering the IAMFL business, which we are working on, and hopefully next year we'll be able to enter that business as well. When you say high profit, I think it's... Personally, I think Country Liquor for a company like us is always a more profitable business, since IAMFL is a very, very competitive landscape. But yes, that is a natural step for the company. So we will go ahead with that. And the malt unit, I don't have any set timelines as of today.

Got it. And regarding the 250-KLPD grain-based plant at Fatehbar, so it was highlighted by Rajendraji in his interview with ET now in the month of July that the management is on the verge of finalizing the vendors and technology partners and will begin the construction by August. So is the plant still on or you're keeping this on hold?

No, so yes, he was very right. That statement was made. But post, a few days after only, we saw a huge... Social media backlash against the ethanol policy. So the company is, you know, we're holding the orders and the advances. Let's see. We want to wait and see the future roadmap as well. As I mentioned, you know, there are a lot of things that can happen in this industry. And post that, you know. Orders, pretty much the machinery orders were finalized and everything. All we have to do is press the start button, but we want to wait and just evaluate for a bit more.

Got it. And last question is on the expected sale of land. So, when can we expect the sale of land where the edible oil plant was commissioned? And along with this, have we repaid any debt? Because I have seen that there has been a disclosure today from the company regarding the release of pledge of 75 lakh shares, which were earlier pledged with SBR cap. So that has been fully released. So could you update on these two things?

As you can tell in our numbers also, the finance cost has decreased for the company. Our working capital utilization is quite low, as opposed to what it was in the past. We have paid off a few small loans, and with the financial health of the company improving, our banks did agree to un-pledge our already-pledged shares. And the company is further reducing our working capital limit by another 50 crores in August. So it will be done in the month of August. So yes, we are working on decreasing our debt with better cash flows in the company. For the land sale, I honestly do not have any update. The real estate market where we are in Bathinda is quite slow, so we are also in no rush to sell off the land, and we'll wait and see what takes place.

Thank you, sir. Mr. Bhavish, I would request you to please come back in the queue for further questions. Thank you. Participants who wish to ask a question may press star N1. The next question comes from the line, Oshree Nakesh, with Shubh Capital. Please go ahead.

Yeah, good afternoon, and thanks for the opportunity and congratulations for the good numbers. Sir, I have just a couple of questions. What has been the trend in BDGS realization?

Yes, good afternoon. So, for the past two,

three months, it has been steady with some decrease, maybe one, two rupees a kg. So, prices of maize-based DDGS are currently hovering around rupees 24 to 25 rupees a kg, and rice-based DDGS are about the same.

Okay. My next question is, what is the market size of country liquor in Punjab, and how much market share we hold currently?

See, the current market is close to 1.25 crore cases per annum, out of which the company this year is trying for 30 lakh cases.

Okay. I have only one more question. I think you have partly answered on that, actually. Are we looking to expand beyond PML into IMFL?

Yes, that is on our mind, and we are working towards it, but we want it to be done in a proper way, and the company realizes that we will need a lot of cash that will be spent in marketing and sales in the first year and a half, first year and two years. So, we want it to be done with the proper team, with the proper strategy. So, that's why we are still, you know, we want it to be done in the right manner. So, we are taking a little bit of time.

So, likely, it would be likely to come in? Yes, we will move towards that direction. Okay, sir. Thank you so much.

Thank you.

The next question comes from the line of Navid Bhaya, an individual investor. Please go ahead.

Hello. Hi, Kushal. Okay, I have a few questions. This time our volumes had increased a bit from the previous quarter, quarter four. So these volumes, are we looking to maintain it or there will still be headwinds to, you know, maintain these kind of volumes? 57,000, I think, is what we achieved.

Volumes in which segment?

Both combined, actually. It's in all NDA.

Small and EMM might increase a little, might increase when the 200k LPD unit which has been shut down due to the fire once it comes into operation. So hopefully in the next 15 days we'll be able to bring that into operation. So only that can be helpful in increasing the volume. Until then I think it's about the same.

Okay, what is your current debt level?

I think, including the working capital around 320 crores. No, sorry, working capital is separate, and I think we are utilizing about 60-odd crores in working capital. So, 360 crores.

In the year-end, I think your total debt was 576, so you've repaid about 200 crores, am I right?

So, our working capital utilization has significantly decreased since.

Understood. Okay. And is this likely to be maintained, or do you see it going back up again?

It will only go up if we go for another capex related project. So, for now, we don't have any set timeline for any of those projects. So, I don't see it going up until then. Understood.

And with respect to, you know, your capital allocation, till the time you have clarity on, you know, building up your new projects, what would your plan be in terms of capital allocation?

No, I think the plan until then is, you know, utilizing the working capital to the minimum. So, ideally, you would bring that down to zero.

Okay, which maybe you can achieve in a year and a half, roughly, and by then, you're hoping there'll be more clarity in terms of the policies and everything else.

Yes, yes.

Understood. You won't have any plans for a share buyback or something, given your balance sheet and everything? No, not on our agenda right now. Okay. Understood. Thank you so much. Thank you.

Thank you. The next question comes from the line of Gautam Karwa, an individual investor.

Please go ahead. Mr. Gautam, your line has been unmuted. Please go ahead with your question.

As there's no response, we'll move on to the next question. It's from the line of Bhavesh, an individual investor. Please go ahead.

Thank you for the follow-up. So, could management share how much ethanol was actually inside the 200 KL tank when it caught fire and how long that tank had to stay shut? Also, since the presentation mentions that insurance will cover the losses and that the new 150 KL PD unit had buttoned ahead make up for the lost production, I would like to understand the net impact on our time and operations.

See, the stock in the tank was 90,000 liters during the accident. The plant is still shut. The tank is being repaired. I think in the next 15-odd days, hopefully we'll bring that plant into production again. Not only stock loss is covered in our insurance, profit and loss is also covered in our insurance policy. So, you know, the P&L is being evaluated and will continue to be evaluated until the plant is into production. So, for now, that's the only update I have.

That's good. One last question. So, given the Supreme Court's recent allowance for OMCs to procure an additional 1.49 billion liters for Q4 of ESY2526, so can we expect an incremental volume share for demand for our company as well?

Yes, we are a part of that list, and I think we are one of the biggest gainers from that. Order by the Supreme Court. So, if I'm correct, it's around 4.5 crore litres that we get from that order. So, for the next 2-3 months, I think we'll have a good order book.

4.5 crore litres?

Yes, I think it's around that figure.

That's great. From both the units.

Yeah, so that's a good number to hear. So the order book will be full at the end of the year, and the start of the Q of the ESY 26-27 will be a good start for the company from November.

No, this is up until November.

Yeah, correct. This is the end of the ESY2526 part. The end will be good, and the start of the next ESY should be even better after this order. I feel they are coming with E85 and E100 getting dispensed at 5,000 fuel pumps, so we can expect the current demand from...

I don't want to create any... False hope for you. See, yes, E85 and E100 is the future. As of now, flexible availability, flexible vehicle availability is very minimal in the country. There's only one model for sale. So, you know, until there are new models introduced and bought by consumers, the E85 and E100 will not be a gross driver for demand. Yes, for the next three months, the order book is... More than full. And next year, also, we hope to keep our operations at 100%, but the demand creation from FlexVue will take time.

Thank you, sir. Mr. Bhavish, I would request you to please come back in the queue for further questions. The next question comes in the line of Manish Gupta, an individual investor. Please go ahead.

Hi, Koshuji.

How are you?

Good afternoon. Good, good, how are you?

Yes, you're audible. Good afternoon.

So, Kusilji, can you tell me about the current price of maize as of now?

Current prices of maize has been increasing, so they're about 25 rupees a kg now.

Okay, so I think that maintaining the previous quarter margin would be difficult in that case.

Will that be good? No, DNA prices have accordingly been revised upwards, but yes, the raw material prices have increased and even prices of fuel are increasing. So, let's see, it's too early to comment.

So, can you guide me any steady state margin for this year? Like 10%, 12% or an age probably will work.

See, I think you can track our company's past record. It has been around that. With changes in prices in raw material or byproducts or finished food, it tends to vary a little. But overall, I think our margins remain around 10-12%.

Any plan for CBG plant? Have you worked out on that or it's still in the pipeline?

It is being actively being evaluated. We want to study all aspects because paddy straw for CBG is a relatively tricky raw material and we want all our bases covered before we begin to execution.

Is there at least a state level subsidy on that CBG plant?

On the CBG plan, depending on the state, there is. Yes, Hadana has some policy. I haven't read it very thoroughly, but now from the center, there has been a very good policy.

That's all from my side. Thanks.

Thanks for your opportunity.

Thank you. Ladies and gentlemen, if you wish to ask a question, we may press star and one. Participants who wish to ask a question to the management may press star and 1. Thank you. There are no further questions at this time. I would like to hand the conference over to the management for closing comments.

Yes. Thank you, everyone, for joining the call. No further comments from my side.

Thank you, sir. On behalf of NGRED Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you.