NAVA LIMITED (NAVA) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Naval Limited Q2 FY27 Earnings Call, hosted by ICICI Securities Limited. As a reminder, all the participants will be in the listen-only mode, and there will be an opportunity for you to ask a question after the presentation concludes. Should you need assistance during the 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 Mr. Mohit Kumar from ICICI Securities. Thank you, and over to you, Mr. Mohit.

Thank you, Sid. Good afternoon to everyone. On behalf of ICICI Securities, I welcome you all to the Q2 FY27, our next call of Nava Limited. Today, we have with us from the management. Mr. Ashwin, Devi Nanni, Managing Director and CEO. Mr. Nikhil, Devi Nanni, Executive Director. Mr. J. R. K. Pasad, Executive Director. Mr. B. Siniwans Rao, CFO. And Mr. V. S. N. Raju, Company Secretary. Now, I would like to hand over the floor to the management for their opening remarks. Post which will open the floor for Q&A. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining NAWA Limited's earning conference call for the second quarter and half year ending September 30, 2026. I'm pleased to share that NAWA has delivered another strong quarter, achieving our highest ever quantity revenue from operations of rupees 1,262 crore, representing a growth of nearly 30% year-on-year. Our consolidated profit after tax stood at 403 crore, more than doubling compared to the corresponding quarter last year. Beyond the financial results, we have made meaningful progress on several important operational and strategic fronts. In Zambia, we achieved a significant milestone with the commissioning of our 100-megawatt solar power project in September, marking an important step in expanding our renewable energy portfolio. Another positive development has been the recovery of U.S. $10.5 million in outstanding receivables from GIFCO as on date, bringing the remaining balance down to only U.S. dollars $2.6 million.

Our 300-megawatt Phase

II power expansion at NEL continues to advance, with commissioning targeted for July 2027. In India, our energy operations deliver healthy performance, with all the power plants operating at a PLM of 82% or higher. We have also resumed silico-manganese production at our Odisha operations. Our mining operations recorded higher sales volumes while promising exploration activities at our manganese concession in Cote d'Ivoire, sorry, as the mining active concession in Cote d'Ivoire continued to progress. On the agribusiness front, our avocado operations in Zambia are preparing for its first commercial harvest and sales. Meanwhile, development of the integrated sugar complex at Kawamba is progressing with cultivation, equipment deliveries, and infrastructure development towards disargeted commissioning in March 20, 28. Taken together, these developments reflect the progress we are making across our existing operations and future growth business.

As we move into the second half of the financial year,

our priorities remain clear. Sustaining operational performance, progressing our ongoing projects, maintaining financial discipline, and building a diversified portfolio capable of delivering long-term value. With that, I would like to open the floor for your questions.

Thank you. 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 remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets 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 one from Giriraj.

Please go ahead.

Yeah, first of all, congratulations on a good set of numbers. I want to ask that given the record Q2 and the commissioning of the 100 megawatt solar power plant, are you in a position to raise your full year FI 27 guidance for revenue impact? What is the comfortable range you are sharing with? And the second one is that the 300 megawatt plan that is going to get commissioned in July. What can be the incremental EBITDA that we can expect from that plant?

Can you repeat your question on the solar?

Yeah, so after the commissioning of the 100 megawatt solar plant, what can be the full year F527 revenue and the guidance that you are comfortable sharing?

Yeah, so in terms of the 100 megawatt solar plant, we commissioned it end of September, but like all solar plants, you know, it's phased commissioning. So, as of date, we've commissioned 88 megawatts, and by, I think, this month's end, we would have the entire 100 megawatts, you know, flowing through the grid. I'm not going to get into the revenues and so on. All I can say is for the first year, we are appreciating an emergency tariff of $0.09, which has commenced from September. And in terms of the 300-megawatt power plant, EBITDA will be similar to Phase I. Okay.

And moreover, can you just give the future on the renewable side that are you planning any more renewable projects in Zambia or somewhere else?

Yeah, so currently there are certain renewable projects that we are looking at, but until they take shape, I wouldn't want to talk further on them. But there are a couple of projects that are currently being considered, evaluated. Okay, okay.

And the margins that I am able to see have lived…

Sorry for interrupting, Mr. Wansh. Can you please rejoin the queue for more questions? Thank you. Thank you. The next question comes from the line of Siddam Jain from ISEC. Please go ahead.

Mr. Jain, please go ahead.

Hello. Am I audible?

Yes, you are.

Yeah. Thank you for the authenticity and congratulations on the good set of numbers. My first question is, what is the outlook for NWL's 150MW merchant power capacity in terms of utilization, power realizations, and expected contributions over the next few quarters?

I think, as you know, the power sector in India has shown a strong rebound compared to the last year, where the IEX rates itself grew at a percentage of 40 over the corresponding year last year. With respect to the 150, we are fairly confident that this trend would continue. And moreover, I think we have concluded through bilateral contracts up until May. Most of the available surplus.

Okay, and my second question is, what is the expected EBITDA from 100 MW solar power plant commissioned recently in the Zambia?

I'm not going to get into specific numbers in terms of EBITDA right now. Like I mentioned previously, we are experiencing and appreciating the emergency tariff of 9 cents per year, which has come in since September.

Thank you.

Thank you. A reminder to all the participants, please restrict yourself to two questions. The next question comes from the line of Ashnut Kothari from Fanatics Actuarial Training, Private Limited. Please go ahead.

Hi, am I audible?

Yes, you are.

So my question was in terms of shareholder distribution. So we are generating, you know, a decent amount of profits and cash. So should we expect higher dividends or, you know, buyback given the change in taxation as well in India? So should we expect that in the next couple of months?

Sorry, is there a question?

Yeah, that's a question. Should we expect a buyback or, you know, higher dividends from NAWA in the next few months?

So, you know, the NAWA board is always looking at increasing shareholder wealth value, and one of the ways it does it is through corporate actions. So when the time is right, the board will deliberate and take the relevant corporate actions.

Thank you. The next question is from the line of Shree Gopal Kankani from SG Kankani Associates and company secretaries. Please go ahead.

Good afternoon, Devin Nishabh. I just wanted to know that I have seen from the balance sheet that age on March 26, there was case equivalent of around 2,000 crores. And in September 26 also, there is case and case equivalent of more than 2,000 crores. So, what is the use of keeping such huge amount in bank accounts when we are having borrowings and the projects are going on? Is this temporary cash available or can there be some arrangements with banks that we can deposit this money with banks and avail as and when we require for the ongoing projects?

That's good. So, these monies are drawn from, like, lenders for a phase two project in Jandia. It is in dollar terms. Like, see, there is some kind of, like, dollar deficiency there in African countries. That is why we wanted to secure our funds there in our current accounts. And these dollars are, like, yielding interest around 4.5 percent or so.

My question is that when we are earning just 4-5% and we are paying to banks around, I think, minimum 10% interest on borrowing, can there be some arrangement with banks that we deposit this money for temporary because we don't need it right now, as and when the projects go and we will be using this money, so that as and when we require for the projects, we can draw money from banks against our sanctioned amount.

Yeah. Sorry, that's exactly how it's done. So a lot of the expenditure, as I recently mentioned, phase two is supposed to conclude by the month of July. So a lot of the commissioning activities are going to come in. So a lot of payments will be due. So it's not like we draw the entire amount at one shot, but a lot of the payments are going to come due in the next few months. Therefore, the drawdown has been slightly larger. Oh, by the way, the phase 2 and also the 100 megawatts solar.

Okay, okay, sir.

Thank you.

A reminder to all the participants that you may press star and want to ask a question. The next question comes from the line of Kumar Saurabh from Scientific Investing. Please go ahead.

Our Congress on good set of numbers and commissioning of the 100 megawatt plan. My question is on the debt side. Currently, we have a long term borrowing of almost 3000 crores. And I think next year, July, the 300 megawatt plan will also go live. And then our cash flow should, you know, further increase. So what is your next two, three year plans on the debt side and the uses of cash flow to reduce the debt or do you want to use it for some other purposes?

So like you rightly said, you know, on the debt side, once PACE 2 is commissioned, in terms of taking on more debt, that will only come into place once a lot of the projects that we are currently looking at get conceptualized and actually kind of move forward. So if that is the case, we will definitely, you know, take on more debt at the project level.

And in terms of the cash, as it generates,

you know, we will look at possible corporate actions, and also it will be used to fund new projects that we are currently looking at.

Okay. And so my second last question is, once these plans go live, to reach, you know, optimum PLF, like 60 to 70 percent plus, how much time does it take? Like six months to one year is a decent time, or does it take more? You're talking of phase two? Both phase one and phase two. In general, in terms of industry standards and given these projects, what is the PLF utilization period?

So they should be pretty instant in terms of what we planned on achieving is going up to 80% and over in terms of PLF in a couple of months, say about two, three months. But do keep in mind that, you know, when phase two goes live, we will also start taking down phase one for its major overall maintenance, unit by unit, because the phase one has run for, you know, five years continuously, and they need to also be taken down for, you know, major overall maintenance.

Okay. Okay, sir.

That's all I had. Wish you all the best. Thank you. Thank you.

The next question comes from the line of Vanj, from Giridaj. Please go ahead.

Yeah, so my question was that I'm able to see that the operating margin has come down from 43% to 38% this quarter. So what was the reason behind that? And moreover that, what is the currency situation over there? Like last time we had some losses because of that. So, is the current situation good over there or it's improved?

So, when it comes to currency situation, like, Jambia quatsha depreciated by 8% when compared to the previous quarter. That is one, like, good thing for us, the current, like, DTL liability came down on account of this quatsha depreciation. When it comes to our operating project, there are some like capital advances. On account of that, we have some correct slashes that brought down the operational margin. Okay, okay.

And I'm able to see that we were able to generate a net profit of around 700 crores for the H1. So is it comfortable to say that we'll close around 1400 to 1500 crores of PAT and the next year if we look at the incremental of 300 megawatts Zambia phase 2. So can we say that around 2200 to 2300 can be the PAT server for FI28?

As management, we're always trying our best to increase the profitability, but I think further to that, I don't think we can comment on the numbers in terms of what it's going to be for the end of the year. Okay, fine, fine.

And moreover, the dividend that we are giving the policy is 30% of the PAT, right?

Stand-alone PAT. Not 30%, sorry, the dividend policy for, you're talking of NAVA or you're talking of NAVA Global?

I'm talking about the Nava Limited, the holding of it.

Nava Limited, our dividend policy is around 25% of stand-alone fact. Okay, 25% of stand-alone.

25, okay.

Thank you.

A reminder to all the participants that you may press star and want to ask the question. The next question comes from the line of Anand Darshan from 361 Capital Market. Please go ahead.

Good evening, sir. May I audible?

Yes, you are.

Yeah. Thanks for the opportunity, sir. Congrats on the good set of numbers. My first question is regarding the other income, which was reported at 83 crores this quarter. Is it because of interest income on bank balance, or is this level sustainable, or how do you see this?

Yeah, part of that other income consists of fair market value gain at the Singapore company level in respect of two downstream subsidies, which are kind of restructured. So that provision will keep fluctuating. Amount is about 45 crores. That remains fluctuating, but rest of the other income, yes, you are right. That consumes interest in other income.

Right. Right, sir. Okay. And the next question is regarding the mining segment. Sir, revenue grew in quarter two due to higher sales quantity, but our profitability seems to be flat year on year. What explains this divergence?

The pack was flat on the mining division because of the forex loss with the Kwanzaa depreciating, and then mining costs have increased with increased fuel costs.

Sure, okay, okay.

Sir, any update on lithium exploration, sir, in Zambia?

Yeah, so, you know, previously we had mentioned that there was a small hurdle, but that hurdle fortunately has been resolved. So we will continue with the exploration activities, which at this stage is going to be early.

Thank you very much.

Thank you. A reminder to all the participants, please restrict yourself to two questions. The next question comes from the line of Bhagwanda's Vijay Gire from CMS. Please go ahead. Hello, just one last piece, go ahead. There's disturbance in your voice. Can you please come and network and try again? Hello? I still can't hear you. Please, please come in range and hear.

Are you audible?

Yes, you are audible now.

Yeah, yeah, good afternoon. First, let me control the management for giving excellent results year on year. And my question is regarding land monetization, natural land, other lands which you are having. So what are the steps the management taking off because the prices are increasing the land? Hello.

Yeah, so can you repeat the question?

Yeah, my first question is regarding the land monetization of Nacharam land. Last time also we have the same thing, and other land which we are having near other district of Andhra Pradesh.

Yeah, so I think the last time we had mentioned that we had engaged a real estate firm to assess the land and look at the various opportunities available and advise the board in terms of how to proceed. And I think based on the market dynamics that we currently are in, what was advised to the board is at this stage that we will hold on to the land.

Okay, but you have to pay for conversion of 300 crore rupees for conversion of the land. I think you have to pay something, government fees, conversion of the land. Hello.

Hi.

That piece also is there, but notwithstanding that piece, we are still advised to hold on because of the fast pace of development that's happening.

Okay.

Thank you, sir. Thank you very much.

Thank you.

The next question comes from the line of Sham, who is an individual investor. Please go ahead.

Hi. So, my first question is around the mining part. So, like you said, some small challenges have been sorted. So, what is the timeline that we are looking at from an overall mining studies and the eventual exploration perspective?

Yes. You're talking about the lithium mine, right?

Yes, the lithium mine, and also maybe an update on the mine in the African region.

Okay, so I'll start with the lithium mine, and then we can talk about the manganese mine in Khotobor. In terms of the lithium mine, like I said, there was a hurdle, a certain land dispute that has been resolved. So now we will undertake drilling activities. These living activities will take close to a year, and once we assess the reserves and so on, then we will take a call in terms of, you know, how we're going to proceed. And in terms of the manganese mine in Cote d'Ivoire, we have done detailed exploration in a small area, which is of two square kilometers, and the results of which were encouraging. So while we also continue to explore the remaining areas, we are right now under the process of converting that from exploration to exploitation. So mining can actually begin.

And on the second part, I think the question is around the utilization of significant cash balance that the company is carrying. While you understand that because of the different dynamics of India and Africa, you would not be using this for the debt repayment of Africa. But at a local level, are we planning to utilize this fund by way of, let's say, further investments or acquisitions or any other, you know, opportunities because, I mean, existing businesses are now, you know, running great and, you know, it's a good outcome that you have already been giving us on a quarter-on-quarter business.

Yeah, so I think, you know, as far as we are concerned in terms of the Olco level and the Nava level, we do still have ongoing projects. For example, our agri-projects such as Cabamba Sugar and Nava Avocado, there are still equity commitments that are provided from the Nava level. So, and we are also catering a certain amount for other projects that, you know, are still in the concept.

Thank you.

A reminder to all the participants that you have pressed off and want to ask a question. The next question comes from the line of WANJ from Giri Raj. Please go ahead.

Yeah, so other question of mine was that what is the peak debt that we are looking at and what is the repayment schedule that we have planned for the debt?

We think that is $450 million.

The repayment period is 3 plus 7 years, 3 years moratorium and 7 years repayment period. So total 10 years is the repayment period.

And what is the peak debt amount that we are looking at and the net debt that we'll have after the cash that gets generated?

No, the peak debt is a dynamic figure. We are talking about ongoing projects and, you know, probably some of the retirements commencing in the same period as the trial also happens. So, on a mean level, you can say around 300 million would be the number.

And for the next four-year setup. Yeah, I was not able to get you the answer.

Sorry, what I'm saying is, see, the debt draw is happening for projects which are currently ongoing, and some of the projects are getting commissioned, as we speak. So, the number, peak in the debt is a dynamic number, but over a period of time, we could expect about 300 million, 300 to 350 million as the number. That we could probably talk about in the next four years. Fine, fine.

And the Kambabwa Sugar Grant that we are going to commission, what is the cost of that project and the revenue figures that we can get?

The integrated sugar project is estimated to cost around $200 million. So that is getting financed as a 50-50 debt-equity ratio, equity coming from our side, and debt being so slow made at the project level.

And what can be the margins and...

Sorry for interrupting, Mr. Munch. Please rejoin the queue for more questions.

Okay, okay.

Thank you. The next question comes from the line of Arun Kumar Jawaar, who is an individual investor. Please go ahead.

Yeah, good afternoon. First of all, I would like to congratulate you for the good set of numbers. The point I would like to mention is that our company is having about 2,000 crores cash profit, okay, and the market cap is only 16,000 crores. My suggestion would be that why the company

cannot have the investors' presentation which normally good companies have, good management have, yeah.

So as to have the greater visibility in investors' place like, okay, yeah.

I mean, in terms of the company,

you know, we are extremely strong financially. Unfortunately, we don't control the stock price and the market capitalization. We do engage investors, funds, and so on on a continuous basis, and that's always ongoing by our investor department.

Thank you. Thank you.

Thank you.

A reminder to all the participants, that you, my press star, and one to ask a question. The next question comes from the line of Radha from MOFSL. Please go ahead.

Hi, sir. I'm not audible?

Yes.

Thank you for your opportunity and congratulations on good performance. So, regarding the Paris increase in this quarter, I wanted to understand what generally leads to this emergency Paris increase and is this a one-time increase or will it continue henceforth?

Sorry, we can't hear you. Your voice is a little muffled. Can you speak a little away from the mic?

Yes, sir. Is it better?

Yeah.

So, regarding the tariff increase in this quarter, I wanted to understand what generally leads to this emergency tariff increase, and is this a one-time increase, or will it continue henceforth? And also, will Phase 2 have the same escalation mechanism as Phase 1?

Yeah, so that's an annual increase based on USPT ahead. So that's an annual increase that we experienced basically during the start of...

So, this is for every year, sir?

Yes. It has been increasing from the time we commissioned also.

Okay, sir. Okay. And secondly, sir, with regards to the second phase of Zambia, we were pursuing for tax holiday. So, I wanted to understand what is the status of this?

It's directly being pursued.

Okay, sir. And sir, when you say that you have major shutdown planned for phase 1 in the next year when phase 2 starts, so would you be able to quantify the months that you are planning to shut down and how it should be spread? Maybe should we consider that for the second half of the year and for how many months and any planned M&A opportunities? That's my last question.

Yes, I'm not going to commit on the month, but it's approximately around May timeframe that the shutdowns are going to start. And each shutdown for each unit takes about three months.

Okay, sir. And any planned, any opportunity, sir?

Sorry, can you repeat that?

Any trend and any opportunities inorganic.

That we're currently looking at, and once these projects are presented to the board, we will let the wider community know.

Okay, thanks, and all the best.

Thank you. A reminder to all the participants that you may press tab and want to ask a question.

As there are no further questions, ladies and gentlemen, we have reached the end of question and answer session, and now hand the conference over to management for closing comments.

Thank you for your questions and continued interest in NAVA.

As we move forward, our priorities remain focused on operational excellence and the execution of ongoing projects and maintaining financial discipline to create sustainable long-term value. I thank our teams, investors, and stakeholders for your continued trust and support. Thank you, and have a good time.

Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may not disconnect your lines.